HOME LOAN TRUST 2004-HI1
Issuer
AND
JPMORGAN CHASE BANK
Indenture Trustee
INDENTURE
Dated as of March 29, 2004
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HOME LOAN-BACKED NOTES
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RECONCILIATION AND TIE BETWEEN TRUST INDENTURE
ACT OF 1939 AND INDENTURE PROVISIONS*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
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310(a)(1).......................................... 6.11
(a)2).......................................... 6.11
(a)(3).......................................... 6.10
(a)(4).......................................... Not Applicable
(a)(5).......................................... 6.11
(b).......................................... 6.08, 6.11
(c).......................................... Not Applicable
311(a).......................................... 6.12
(b).......................................... 6.12
(c).......................................... Not Applicable
312(a).......................................... 7.01, 7.02(a)
(b).......................................... 7.02(b)
(c).......................................... 7.02(c)
313(a).......................................... 7.04
(b).......................................... 7.04
(c).......................................... 7.03(a)(iii), 7.04
(d).......................................... 7.04
314(a).......................................... 3.10, 7.03(a)
(b).......................................... 3.07
(c)(1).......................................... 8.05(c), 10.01(a)
(c)(2).......................................... 8.05(c), 10.01(a)
(c)(3).......................................... Not Applicable
(d)(1).......................................... 8.05(c), 10.01(b)
(d)(2).......................................... 8.05(c), 10.01(b)
(d)(3).......................................... 8.05(c), 10.01(b)
(e).......................................... 10.01(a)
315(a).......................................... 6.01(b)
(b).......................................... 6.05
(c).......................................... 6.01(a)
(d).......................................... 6.01(c)
(d)(1).......................................... 6.01(c)
(d)(2).......................................... 6.01(c)
(d)(3).......................................... 6.01(c)
(e).......................................... 5.13
316(a)(1)(A)......................................... 5.11
316(a)(1)(B)......................................... 5.12
316(a)(2).......................................... Not applicable
316(b).......................................... 5.07
317(a)(1).......................................... 5.04
317(a)(2).......................................... 5.03(d)
317(b).......................................... 3.03(a)
318(a).......................................... 10.07
*This reconciliation and tie shall not, for any purpose, be deemed to be part of
the within indenture.
TABLE OF CONTENTS
Section Page
ARTICLE I
Definitions
Section 1.01.Definitions............................................................2
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Section 1.02.Incorporation by Reference of Trust Indenture Act......................2
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Section 1.03.Rules of Construction..................................................2
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ARTICLE II
Original Issuance of Notes
Section 2.01.Form...................................................................4
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Section 2.02.Execution, Authentication and Delivery.................................4
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ARTICLE III
Covenants
Section 3.01.Collection of Payments with respect to the Grantor Trust Certificate...5
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Section 3.02.Maintenance of Office or Agency........................................5
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Section 0.00.Xxxxx for Payments To Be Held in Trust; Paying Agent...................5
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Section 3.04.Existence..............................................................6
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Section 3.05.Payment of Principal and Interest; Defaulted Interest..................7
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Section 3.07.Opinions as to Trust Estate...........................................11
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Section 3.08.Performance of Obligations; Servicing Agreement.......................12
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Section 3.09.Negative Covenants....................................................12
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Section 3.10.Annual Statement as to Compliance.....................................13
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Section 3.11.Recording of Assignments..............................................13
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Section 3.12.Representations and Warranties Concerning the Grantor Trust
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Certificate...........................................................13
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Section 3.13.Reserved..............................................................14
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Section 3.14.Reserved..............................................................14
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Section 3.15.Investment Company Act................................................14
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Section 3.16.Issuer May Consolidate, etc...........................................14
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Section 3.17.Successor or Transferee...............................................15
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Section 0.00.Xx Other Business.....................................................16
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Section 0.00.Xx Borrowing..........................................................16
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Section 3.20.Guarantees, Loans, Advances and Other Liabilities.....................16
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Section 0.00.Xxxxxxx Expenditures..................................................16
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Section 3.22.Owner Trustee Not Liable for the Certificate or Related Documents.....16
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Section 3.23.Restricted Payments...................................................16
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Section 3.24.Notice of Events of Default...........................................17
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Section 3.25.Further Instruments and Acts..........................................17
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Section 3.26.Statements to Noteholders.............................................17
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Section 3.27.Allocation of Liquidation Loss Amounts................................17
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Section 3.28.Reserved..............................................................17
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Section 3.29.Determination of Class A-1 Note Rate..................................18
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Section 3.30.Liquidation on Final Scheduled Payment Date...........................18
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Section 0.00.Xx Recourse...........................................................18
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Section 3.32.Additional UCC Representations and Warranties.........................18
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ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01.The Notes.............................................................19
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Section 4.02.Registration of and Limitations on Transfer and Exchange of
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Notes; Appointment of Certificate Registrar...........................19
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Section 4.03.Mutilated, Destroyed, Lost or Stolen Notes............................21
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Section 4.04.Persons Deemed Owners.................................................21
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Section 4.05.Cancellation..........................................................22
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Section 4.06.Book-Entry Notes......................................................22
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Section 4.07.Notices to Depository.................................................23
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Section 4.08.Definitive Notes......................................................23
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Section 0.00.Xxx Treatment.........................................................24
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Section 4.10.Satisfaction and Discharge of Indenture...............................24
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Section 4.11.Application of Trust Money............................................25
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Section 4.12.Reserved..............................................................25
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Section 4.13.Repayment of Monies Held by Paying Agent..............................25
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Section 4.14.Temporary Notes.......................................................25
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ARTICLE V
Default and Remedies
Section 0.00.Xxxxxx of Default.....................................................27
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Section 5.02.Acceleration of Maturity; Rescission and Annulment....................27
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Section 5.03.Collection of Indebtedness and Suits for Enforcement by Indenture
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Trustee...............................................................27
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Section 5.04.Remedies; Priorities..................................................29
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Section 5.05.Optional Preservation of the Trust Estate.............................31
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Section 5.06.Limitation of Suits...................................................31
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Section 5.07.Rights of Noteholders to Receive Principal and Interest...............32
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Section 5.08.Restoration of Rights and Remedies....................................32
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Section 5.09.Rights and Remedies Cumulative........................................33
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Section 5.10.Delay or Omission Not a Waiver........................................33
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Section 5.11.Control by Noteholders................................................33
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Section 5.12.Waiver of Past Defaults...............................................33
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Section 5.13.Undertaking for Costs.................................................34
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Section 5.14.Waiver of Stay or Extension Laws......................................34
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Section 0.00.Xxxx of Trust Estate..................................................34
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Section 5.16.Action on Notes.......................................................36
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ARTICLE VI
The Indenture Trustee
Section 6.01.Duties of Indenture Trustee...........................................37
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Section 6.02.Rights of Indenture Trustee...........................................38
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Section 6.03.Individual Rights of Indenture Trustee................................38
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Section 6.04.Indenture Trustee's Disclaimer........................................38
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Section 6.05.Notice of Event of Default............................................38
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Section 6.06.Reports by Indenture Trustee to Holders...............................39
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Section 6.07.Compensation and Indemnity............................................39
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Section 6.08.Replacement of Indenture Trustee......................................39
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Section 6.09.Successor Indenture Trustee by Merger.................................40
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Section 6.10.Appointment of Co-Indenture Trustee or Separate Indenture Trustee.....41
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Section 6.11.Eligibility; Disqualification.........................................42
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Section 6.12.Preferential Collection of Claims Against Issuer......................42
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Section 6.13.Representations and Warranties........................................42
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Section 6.14.Directions to Indenture Trustee.......................................43
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Section 6.15.Indenture Trustee May Own Securities..................................43
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ARTICLE VII
Noteholders' Lists and Reports
Section 7.01.Issuer to Furnish Indenture Trustee Names and Addresses of
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Noteholders...........................................................44
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Section 7.02.Preservation of Information; Communications to Noteholders............44
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Section 7.03.Reports by Issuer.....................................................44
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Section 7.04.Reports by Indenture Trustee..........................................45
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Section 0.00.Xxxxxxxx Act Reporting.
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01.Collection of Money...................................................46
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Section 0.00.Xxxxx Accounts........................................................46
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Section 8.03.Officer's Certificate.................................................46
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Section 8.04.Termination Upon Distribution to Noteholders..........................47
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Section 8.05.Release of Trust Estate...............................................47
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Section 8.06.Surrender of Notes Upon Final Payment.................................47
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ARTICLE IX
Supplemental Indentures
Section 9.01.Supplemental Indentures Without Consent of Noteholders................48
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Section 9.02.Supplemental Indentures With Consent of Noteholders...................49
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Section 9.03.Execution of Supplemental Indentures..................................51
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Section 9.04.Effect of Supplemental Indenture......................................51
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Section 9.05.Conformity with Trust Indenture Act...................................51
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Section 9.06.Reference in Notes to Supplemental Indentures.........................51
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ARTICLE X
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc......................52
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Section 10.02. Form of Documents Delivered to Indenture Trustee...............53
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Section 10.03. Acts of Noteholders............................................54
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Section 10.04. Notices, etc., to Indenture Trustee, Issuer and Rating
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Agencies.......................................................55
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Section 10.05. Notices to Noteholders; Waiver.................................55
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Section 10.06. Alternate Payment and Notice Provisions........................56
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Section 10.07. Conflict with Trust Indenture Act..............................56
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Section 10.08. Effect of Headings.............................................56
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Section 10.09. Successors and Assigns.........................................56
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Section 10.10. Separability...................................................56
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Section 10.11. Benefits of Indenture..........................................56
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Section 10.12. Legal Holidays.................................................57
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Section 10.13. GOVERNING LAW..................................................57
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Section 10.14. Counterparts...................................................57
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Section 10.15. Recording of Indenture.........................................57
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Section 10.16. Issuer Obligation..............................................57
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Section 10.17. No Petition....................................................57
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Section 10.18. Inspection.....................................................58
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Signatures and Seals
Acknowledgments
EXHIBITS
Exhibit A-1 Form of Class A Notes
Exhibit A-2 Form of Class M Notes
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Exhibit B Form of Back-up Certification to Form 10-K Certificate
Appendix A Definitions
v
This is the Indenture, dated as of March 29, 2004, between HOME
LOAN TRUST 2004-HI1, a Delaware statutory trust, as Issuer (the "Issuer"), and
JPMorgan Chase Bank, as Indenture Trustee (the "Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's
Series 2004-HI1 Home Loan-Backed Notes (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing
Date, as trustee for the benefit of the Holders of the Notes, all of the
Issuer's right, title and interest in and to whether now existing or hereafter
created (a) the Grantor Trust Certificate, (b) all funds on deposit from time to
time in the Payment Account and in all proceeds thereof; and (c) all present and
future claims, demands, causes and choses in action in respect of any or all of
the foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in respect of, any or all of the foregoing and all payments on
or under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the Holders of the
Notes, acknowledges such Xxxxx, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
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ARTICLE I
Definitions
Section 1.01.Definitions. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02.Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the Trust Indenture Act (the "TIA"), the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer and any
other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by
the TIA, defined by TIA reference to another statute or defined by
Commission rule have the meaning assigned to them by such definitions.
Section 1.03.Rules of Construction. Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
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(v) words in the singular include the plural and words in
the plural include the singular; and
(vi) any agreement, instrument or statute defined or
referred to herein or in any instrument or certificate delivered in
connection herewith means such agreement, instrument or statute as from
time to time amended, modified or supplemented and includes (in the case
of agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
3
ARTICLE II
Original Issuance of Notes
Section 2.01.Form. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the form set forth in
Exhibit A-1 and A-2, with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes. The terms of the Notes set forth in
Exhibit A-1 and A-2 are part of the terms of this Indenture.
Section 2.02.Execution, Authentication and Delivery. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and deliver
Notes for original issue in an aggregate initial principal amount of $59,560,000
with respect to the Class A-1 Notes, $24,274,000 with respect to the Class A-2
Notes, $40,346,000 with respect to the Class A-3 Notes, $23,121,00 with respect
to the Class A-4 Notes, $27,774,000 with respect to the Class A- 5 Notes,
$18,800,000 with respect to the Class M-1 Notes, $16,450,000 with respect to the
Class M-2 Notes, $9,400,000 with respect to the Class M-3 Notes, $4,700,000 with
respect to the Class M-4 Notes and $3,525,000 with respect to the Class M-5
Notes.
The Notes shall be dated the date of their authentication. The Notes
shall be issuable as registered Notes. The Class A Notes and the Class M-1 Notes
shall be issuable in the minimum initial Note Balances of $25,000 and in
integral multiples of $1 in excess thereof. The Class M-2 Notes, Class M-3
Notes, Class M-4 Notes and Class M-5 Notes shall be issuable in the minimum
initial Note Balances of $250,000 and in integral multiples of $1 in excess
thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
4
ARTICLE III
Covenants
Section 3.01.Collection of Payments with respect to the Grantor Trust
Certificate. The Indenture Trustee shall establish and maintain with itself the
Payment Account in which the Indenture Trustee shall, subject to the terms of
this paragraph, deposit, on the same day as it is received from the Grantor
Trustee, each remittance received by the Indenture Trustee with respect to the
Grantor Trust Certificate. The Indenture Trustee shall make all payments of
principal of and interest on the Notes, subject to Section 3.03, as provided in
Section 3.05 herein from monies on deposit in the Payment Account.
Section 3.02.Maintenance of Office or Agency. The Issuer will maintain
in the City of New York, an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
Section 0.00.Xxxxx for Payments To Be Held in Trust; Paying Agent. (a)
As provided in Section 3.01, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the Payment
Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Payment Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer will cause each Paying Agent other
than the Indenture Trustee to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent it hereby so agrees), subject
to the provisions of this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts
due with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee written notice of any
default by the Issuer of which it has actual knowledge in the making of
any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee, forthwith
pay to the Indenture Trustee all sums so held in trust by such Paying
Agent;
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(iv) immediately resign as Paying Agent and forthwith pay
to the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect
to the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; and
(vi) deliver to the Indenture Trustee a copy of the report
to Noteholders prepared with respect to each Payment Date by the Master
Servicer pursuant to Section 4.01 of the Servicing Agreement.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; provided, however, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee may also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.04.Existence. The Issuer will keep in full effect its
existence, rights and franchises as a statutory trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Grantor Trust Agreement, the
Grantor Trust Certificate and each other instrument or agreement included in the
Trust Estate.
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Section 3.05.Payment of Principal and Interest; Defaulted Interest. (a)
On each Payment Date from amounts on deposit in the Payment Account (other than
amounts deposited constituting prepayment charges), the Paying Agent shall pay
to the Noteholders, the Certificate Paying Agent on behalf of the
Certificateholder and to other Persons the amounts to which they are entitled,
as set forth in the statements delivered to the Indenture Trustee pursuant to
Section 4.01 of the Servicing Agreement, as set forth in this Section 3.05.
(b) On each Payment Date, Interest Collections shall be distributed to
the Notes and the B Component in the following order of priority:
(i) first, to the Senior Notes, Accrued Note Interest on
that Class for such Payment Date, plus any unpaid Accrued Note Interest
remaining unpaid from any prior Payment Date, pro rata, to the extent of
the Interest Collections for that Payment Date as provided in clause (c)
below;
(ii) second, to the Class M-1 Notes, Accrued Note Interest
on that Class for such Payment Date, plus any unpaid Accrued Note
Interest remaining unpaid from any prior Payment Date, to the extent of
Interest Collections for the Payment Date after distributions of
interest to the Senior Notes;
(iii) third, to the Class M-2 Notes, Accrued Note Interest
on that Class for such Payment Date, plus any unpaid Accrued Note
Interest remaining unpaid from any prior Payment Date, to the extent of
Interest Collections for the Payment Date after distributions of
interest to the Senior Notes and the Class M-1 Notes;
(iv) fourth, to the Class M-3 Notes, Accrued Note Interest
on that Class for such Payment Date, plus any unpaid Accrued Note
Interest remaining unpaid from any prior Payment Date, to the extent of
Interest Collections for the Payment Date after distributions of
interest to the Senior Notes, the Class M-1 Notes and the Class M-2
Notes;
(v) fifth, to the Class M-4 Notes, Accrued Note Interest
on that Class for such Payment Date, plus any unpaid Accrued Note
Interest remaining unpaid from any prior Payment Date, to the extent of
Interest Collections for the Payment Date after distributions of
interest to the Senior Notes, the Class M-1 Notes, the Class M-2 Notes
and the Class M-3 Notes;
(vi) sixth, to the Class M-5 Notes, Accrued Note Interest
on that Class for such Payment Date, plus any unpaid Accrued Note
Interest remaining unpaid from any prior Payment Date, to the extent of
Interest Collections for the Payment Date after distributions of
interest to the Senior Notes, the Class M-1 Notes, the Class M-2 Notes,
the Class M-3 Notes and the Class M-4 Notes; and
(vii) seventh, to the Certificate Paying Agent on behalf
of the Certificateholder in respect of the B Component, Accrued
Component Interest thereon for such Payment Date, plus any unpaid
Accrued Component Interest thereon remaining unpaid
7
from any prior Payment Date, to the extent of Interest Collections for
that Payment Date after distributions of interest to the Senior Notes
and Class M Notes.
(c) On each Payment Date, other than the Payment Date in April 2029, the
Principal Distribution Amount shall be distributed in the following order of
priority:
(i) first, the Senior Principal Distribution Amount shall
be distributed to the Class A Notes in the manner and priority set forth
below;
(ii) second, the Class M-1 Principal Distribution Amount
shall be distributed to the Class M-1 Notes until the Note Balance
thereof has been reduced to zero;
(iii) third, the Class M-2 Principal Distribution Amount
shall be distributed to the Class M-2 Notes until the Note Balance
thereof has been reduced to zero;
(iv) fourth, the Class M-3 Principal Distribution Amount
shall be distributed to the Class M-3 Notes until the Note Balance
thereof has been reduced to zero;
(v) fifth, the Class M-4 Principal Distribution Amount
shall be distributed to the Class M-4 Notes until the Note Balance
thereof has been reduced to zero;
(vi) sixth, the Class M-5 Principal Distribution Amount
shall be distributed to the Class M-5 Notes until the Note Balance
thereof has been reduced to zero;
(vii) seventh, the B Component Principal Distribution
Amount shall be distributed to the Certificate Paying Agent on behalf of
the Certificateholder in respect of the B Component until the Component
Principal Balance thereof has been reduced to zero; and
(viii) eighth, the balance, if any, remaining of the
Principal Distribution Amount after the distributions described in
clauses (i) through (vii) hereof above shall be paid to the Class M
Notes and the Certificate Paying Agent on behalf of the
Certificateholder in respect of the B Component in accordance with the
provisions for the payment of the Net Monthly Excess Cash Flow as
described in subsection (e) below, commencing with clause (iii) thereof.
Any payments of principal allocable to the Class A Notes shall be
paid to the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes
and Class A-5 Notes, in that order, in each case until the outstanding Note
Balance of each of these Notes has been reduced to zero.
In the event that the Class M Notes and B Component have been
reduced to zero while any Class A Note is outstanding, all priorities relating
to Senior Principal Distribution Amount referenced above will be disregarded.
Instead, an amount equal to the Senior Principal Distribution Amount will be
distributed to the Class A Notes remaining, pro rata in accordance with their
respective outstanding Note Balances.
8
On the Payment Date in April 2029, principal will be due and
payable on each Class of Notes and the B Component in amounts equal to the
related Note Balance and Component Principal Balance, if any. In no event will
principal payments on any Class of Notes or the B Component on any Payment Date
exceed the related Note Balance or Component Principal Balance on that date.
(d) On each Payment Date, the Net Monthly Excess Cash Flow will be
distributed in the following order of priority:
(i) first, to pay the aggregate Liquidation Loss
Distribution Amount for that Payment Date to the Notes and the B
Component;
(ii) second, to pay the Reserve Increase Amount for that
Payment Date to the Notes and the B Component, with any amount payable
to the B Component to the Certificate Paying Agent on behalf of the
Certificateholder in respect of the B Component;
(iii) third, to pay any Allocable Loss Interest on the
Class M-1 Notes until fully reimbursed;
(iv) fourth, to reimburse the Class M-1 Notes for
Liquidation Loss Amounts previously allocated thereto pursuant to
Section 3.27 until fully reimbursed;
(v) fifth, to pay any Allocable Loss Interest on the Class
M-2 Notes until fully reimbursed;
(vi) sixth, to reimburse the Class M-2 Notes for
Liquidation Loss Amounts previously allocated thereto pursuant to
Section 3.27 until fully reimbursed;
(vii) seventh, to pay any Allocable Loss Interest on the
Class M-3 Notes, until fully reimbursed;
(viii) eighth, to reimburse the Class M-3 Notes for
Liquidation Loss Amounts previously allocated thereto pursuant to
Section 3.27 until fully reimbursed;
(ix) ninth, to pay any Allocable Loss Interest on the
Class M-4 Notes, until fully reimbursed;
(x) tenth, to reimburse the Class M-4 Notes for
Liquidation Loss Amounts previously allocated thereto pursuant to
Section 3.27 until fully reimbursed;
(xi) eleventh, to pay any Allocable Loss Interest on the
Class M-5 Notes, until fully reimbursed;
(xii) twelfth, to reimburse the Class M-5 Notes for
Liquidation Loss Amounts previously allocated thereto pursuant to
Section 3.27 until fully reimbursed;
9
(xiii) thirteenth, to pay any Allocable Loss Interest on
the B Component to the Certificate Paying Agent on behalf of the
Certificateholder in respect of the B Component until fully reimbursed;
(xiv) fourteenth, to reimburse the B Component for
Liquidation Loss Amounts previously allocated thereto pursuant to
Section 3.27 to the Certificate Paying Agent on behalf of the
Certificateholder in respect of the B Component until fully reimbursed;
and
(xv) fifteenth, any remaining amounts and any amounts
constituting prepayment charges will be distributed to the Certificate
Paying Agent on behalf of the Certificateholder in respect of the
Residual Component.
(e) On each Payment Date, the Certificate Paying Agent shall deposit in
the Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certificateholder.
(f) The amounts paid to Noteholders shall be paid to the Notes and the B
Component in accordance with the applicable percentage as set forth in the
definition of Note Rate and Component Interest Rate, respectively. Interest will
accrue on the Notes (other than the Class A-1 Notes) and the B Component on the
basis of a 360-day year consisting of twelve 30-day months. Interest will accrue
on the Class A-1 Notes on the basis of a 360-day year and the actual number of
days in the related Interest Accrual Period.
(g) Any installment of interest or principal, if any, payable on any
Note that is punctually paid or duly provided for by the Issuer on the
applicable Payment Date shall, if such Holder holds Notes of an aggregate
initial Note Balance of at least $1,000,000, be paid to each Holder of record on
the preceding Record Date, by wire transfer to an account specified in writing
by such Holder reasonably satisfactory to the Indenture Trustee as of the
preceding Record Date or in all other cases or if no such instructions have been
delivered to the Indenture Trustee, by check or money order to such Noteholder
mailed to such Holder's address as it appears in the Note Register the amount
required to be distributed to such Holder on such Payment Date pursuant to such
Holder's Securities; provided, however, that the Indenture Trustee shall not pay
to such Holders any amount required to be withheld from a payment to such Holder
by the Code.
(h) The Note Balance of each Note shall be due and payable in full on
the Final Scheduled Payment Date as provided in the related form of Note set
forth in Exhibit A-1 and A-2. All principal payments on the Notes shall be made
to the Noteholders entitled thereto in accordance with the Percentage Interests
represented by such Notes. Upon written notice to the Indenture Trustee by the
Issuer (or by the Master Servicer on behalf of the Issuer, pursuant to Section
8.08(c) of the Servicing Agreement) of the Final Scheduled Payment Date for the
Notes or other final Payment Date, the Indenture Trustee shall notify the
related Noteholders of record of the Final Scheduled Payment Date or other final
Payment Date, by mail or facsimile, no later than five Business Days prior to
the Final Scheduled Payment Date or other final Payment Date and shall specify:
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(i) that the Record Date otherwise applicable to such
Payment Date is not applicable;
(ii) that payment of the principal amount and any interest
due with respect to such Note at the Final Scheduled Payment Date or
other final Payment Date will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may
be presented and surrendered for such final payment; and
(iii) the amount of any such final payment, if known.
Section 0.00.Xxxxxxxxxx of Trust Estate. (a) The Issuer will from time
to time execute and deliver all such supplements and amendments hereto and all
such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:
(i) maintain or preserve the lien and security interest
(and the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iii) enforce any provision of the Grantor Trust
Certificate or Grantor Trust Agreement; and
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust Estate
against the claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of money
or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.07 (or from the jurisdiction in which it
was held as described in the Opinion of Counsel delivered at the Closing Date
pursuant to Section 3.07(a), if no Opinion of Counsel has yet been delivered
pursuant to Section 3.07(b)) unless the Trustee shall have first received an
Opinion of Counsel to the effect that the lien and security interest created by
this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions. The Issuer hereby designates the
Indenture Trustee its agent and attorney-in-fact to execute any financing
statement, continuation statement or other instrument required to be executed
pursuant to this Section 3.06.
Section 3.07.Opinions as to Trust Estate. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel at the expense of the Issuer either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the lien and security interest in the Grantor
11
Trust Certificate and reciting the details of such action, or stating that, in
the opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) On or before December 31st in each calendar year, beginning in 2005,
the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, rerecording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and security interest in the Grantor Trust Certificate and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Grantor Trust Certificate
until December 31 in the following calendar year.
Section 3.08.Performance of Obligations; Servicing Agreement. (a) The
Issuer will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and
agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be taken
by others which would release any Person from any of such Person's covenants or
obligations under any of the documents relating to the Grantor Trust Certificate
or under any instrument included in the Trust Estate, or which would result in
the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents relating to the
Grantor Trust Certificate or any such instrument, except such actions as the
Master Servicer is expressly permitted to take in the Servicing Agreement.
(d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section 3.09.Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, sell,
transfer, exchange or otherwise dispose of the Trust Estate, unless
directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such
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payments under the Code) or assert any claim against any present or
former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of the Trust Estate;
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations with respect
to the Notes under this Indenture except as may be expressly permitted
hereby, permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture) to
be created on or extend to or otherwise arise upon or burden the Trust
Estate or any part thereof or any interest therein or the proceeds
thereof or (B) permit the lien of this Indenture not to constitute a
valid first priority security interest in the Trust Estate; or
(iv) waive or impair, or fail to assert rights under the
Grantor Trust Certificate, or impair or cause to be impaired the Grantor
Trust Certificate or the Issuer's interest in the Grantor Trust
Certificate, the Home Loan Purchase Agreement or in any Basic Document,
if any such action would materially and adversely affect the interests
of the Noteholders.
Section 3.10.Annual Statement as to Compliance. The Issuer will deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing with the fiscal year 2005), an Officer's Certificate
stating, as to the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such
year and of its performance under this Indenture and the Owner Trust
Agreement has been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions and
covenants under this Indenture and the provisions of the Owner Trust
Agreement throughout such year, or, if there has been a default in its
compliance with any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status
thereof.
Section 3.11.Recording of Assignments. The Issuer shall enforce the
obligation of the Seller under the Home Loan Purchase Agreement to submit or
cause to be submitted for recording all Assignments of Mortgages within 60 days
of receipt of recording information by the Master Servicer.
Section 3.12.Representations and Warranties Concerning the Grantor Trust
Certificate. The Indenture Trustee, as pledgee of the Grantor Trust Certificate,
has the benefit of the representations and warranties made by the Seller in
Section 3.1(a) and Section 3.1(b) of the Home Loan Purchase Agreement concerning
the Home Loans and the right to enforce the remedies against the Seller provided
in such Section 3.1(a) or Section 3.1(b) to the same extent as though such
representations and warranties were made directly to the Indenture Trustee.
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Section 3.13.Reserved.
Section 3.14.Reserved.
Section 3.15.Investment Company Act. The Issuer shall not become an
"investment company" or "controlled by" an investment company as such terms are
defined in the Investment Company Act of 1940, as amended (or any successor or
amendatory statute), and the rules and regulations thereunder (taking into
account not only the general definition of the term "investment company" but
also any available exceptions to such general definition); provided, however,
that the Issuer shall be in compliance with this Section 3.15 if it shall have
obtained an order exempting it from regulation as an "investment company" so
long as it is in compliance with the conditions imposed in such order.
Section 3.16.Issuer May Consolidate, etc. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States of America or any state or
the District of Columbia and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture Trustee, in
form reasonably satisfactory to the Indenture Trustee, the due and
punctual payment of the principal of and interest on all Notes and to
the Certificate Paying Agent, on behalf of the Certificateholder and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein;
(ii) immediately after giving effect to such transaction,
no Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer
that such transaction shall not cause the rating of the Notes to be
reduced, suspended or withdrawn or to be considered by either Rating
Agency to be below investment grade;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee) to
the effect that such transaction will not have any material adverse tax
consequence to the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such consolidation or merger and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any
filing required by the Exchange Act).
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(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person (other than
the initial transfer of the Owner Trust Certificate by the Depositor to the
Seller, by the Seller to RFC Asset Holdings II, Inc., by RFC Asset Holdings II,
Inc. to the Class B Issuer and by the Class B Issuer to the Class B Trustee
under the Class B Indenture), unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America or
any state, (B) expressly assume, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form satisfactory to
the Indenture Trustee, the due and punctual payment of the principal of
and interest on all Notes and the performance or observance of every
agreement and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly agree by
means of such supplemental indenture that all right, title and interest
so conveyed or transferred shall be subject and subordinate to the
rights of Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agree to indemnify, defend and hold
harmless the Issuer against and from any loss, liability or expense
arising under or related to this Indenture and the Notes and (E)
expressly agree by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all
filings with the Commission (and any other appropriate Person) required
by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agencies shall have notified the Issuer
that such transaction shall not cause the rating of the Notes to be
reduced, suspended or withdrawn;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture Trustee) to
the effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such conveyance or transfer and such supplemental indenture comply
with this Article III and that all conditions precedent herein provided
for relating to such transaction have been complied with (including any
filing required by the Exchange Act).
Section 3.17.Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and
15
power of, the Issuer under this Indenture with the same effect as if such Person
had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 0.00.Xx Other Business. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Grantor Trust Certificate and the issuance of the Notes and the Certificate in
the manner contemplated by this Indenture and the Basic Documents and all
activities incidental thereto.
Section 0.00.Xx Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.20.Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by this Indenture or the Basic Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
Section 0.00.Xxxxxxx Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.22.Owner Trustee Not Liable for the Certificate or Related
Documents. The recitals contained herein shall be taken as the statements of the
Depositor, and the Owner Trustee assumes no responsibility for the correctness
thereof. The Owner Trustee makes no representations as to the validity or
sufficiency of this Indenture, of any Basic Document or of the Certificate
(other than the signatures of the Owner Trustee on the Certificate) or the
Notes, or of any Related Documents. The Owner Trustee shall at no time have any
responsibility or liability with respect to the sufficiency of the Trust Estate
or its ability to generate the payments to be distributed to the
Certificateholder under the Owner Trust Agreement or the Noteholders under this
Indenture, including, the compliance by the Depositor or the Seller with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
Section 3.23.Restricted Payments. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or
16
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made, (x)
distributions to the Owner Trustee and the Certificateholder as contemplated by,
and to the extent funds are available for such purpose under the Owner Trust
Agreement, and (y) payments to the Master Servicer pursuant to the terms of the
Servicing Agreement. The Issuer will not, directly or indirectly, make payments
to or distributions from the Custodial Account except in accordance with this
Indenture and the Basic Documents.
Section 3.24.Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder, under the Owner Trust Agreement and under the Grantor Trust
Agreement.
Section 3.25.Further Instruments and Acts. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.26.Statements to Noteholders. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall forward by mail or
otherwise make available electronically to the Depositor, the Rating Agencies
and to each Noteholder and Certificateholder, respectively, the statement
delivered to it, on the Business Day following the related Determination Date
pursuant to Section 4.01 of the Servicing Agreement.
Section 3.27.Allocation of Liquidation Loss Amounts. The subordination
provided to the Senior Notes by the Class M Notes and the B Component and the
subordination provided to each class of Class M Notes by the B Component and by
any class of Class M Notes subordinate thereto will cover Liquidation Loss
Amounts on the Home Loans. On each Payment Date, any Liquidation Loss Amounts
will be allocated as follows: first, by a payment of the Liquidation Loss
Distribution Amount, second by a reduction in the Outstanding Reserve Amount,
third, to the B Component until the Component Principal Balance thereof has been
reduced to zero; fourth, to the Class M-5 Notes, until the Note Balance thereof
has been reduced to zero; fifth, to the Class M-4 Notes, until the Note Balance
thereof has been reduced to zero; sixth, to the Class M-3 Notes, until the Note
Balance thereof has been reduced to zero; seventh, to the Class M-2 Notes, until
the Note Balance thereof has been reduced to zero; and eighth, to the Class M-1
Notes, until the Note Balance thereof has been reduced to zero. Liquidation Loss
Amounts will not be allocated to the Senior Notes.
Any allocation of Liquidation Loss Amounts to a Class of Notes or the
Certificate in respect of the B Component, shall be made by reducing the Note
Balance or Component Principal Balance thereof, as applicable, by the amount so
allocated, which allocation shall be deemed to have occurred on such Payment
Date. All Liquidation Loss Amounts and all other losses allocated to a Class of
Notes or to the Certificate in respect of the B Component hereunder, as
applicable, will be allocated among the Notes or the Certificate, as applicable,
of such Class in proportion to the Percentage Interests evidenced thereby.
Section 3.28.Reserved.
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Section 3.29.Determination of Class A-1 Note Rate. On the second LIBOR
Business Day immediately preceding (i) the Closing Date in the case of the first
Interest Accrual Period and (ii) the first day of each succeeding Interest
Accrual Period, the Indenture Trustee shall determine LIBOR and the Note Rate
for the Class A-1 Notes for such Interest Accrual Period and shall inform the
Issuer, the Master Servicer and the Depositor at their respective facsimile
numbers given to the Indenture Trustee in writing. All determinations of LIBOR
by the Indenture Trustee shall, in the absence of manifest error, be conclusive
for all purposes, and each holder of a Class A-1 Note, by accepting its Class
A-1 Note, agrees to be bound by such determination.
Section 3.30.Liquidation on Final Scheduled Payment Date. On the Final
Scheduled Payment Date, if the Notes and B Component are not paid in full on or
prior to the Final Scheduled Payment Date, the Indenture Trustee shall take full
account of the assets and liabilities of the Owner Trust, shall liquidate the
assets, in a commercially reasonable manner and on commercially reasonable
terms, as promptly as is consistent with obtaining the fair value thereof and in
accordance with Section 5.15, and shall apply and distribute the proceeds
therefrom in the order of priority described in Section 3.05(c).
Section 0.00.Xx Recourse. Upon the occurrence of an Event of Default
under the Notes, this Indenture or the other Basic Documents, Holders of the
Notes shall have recourse only to the Collateral and all proceeds thereof, as
and to the extent provided herein, and no recourse shall be had by such Holders
against the Issuer or its other assets or properties.
Section 3.32.Additional UCC Representations and Warranties. The Issuer
hereby represents and warrants that:
(i) this Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Trust Estate in favor
of the Indenture Trustee on behalf of the Holders of the Notes, which
security interest is prior to all other liens, and is enforceable as
such as against creditors of the Issuer.
(ii) the Issuer owns and has good and marketable title to
the Trust Estate free and clear of any lien, claim or encumbrance of any
Person.
(iii) the Issuer will cause the filing of all appropriate
financing statements in the proper filing office in the appropriate
jurisdictions under applicable law within 10 days of the Closing Date in
order to perfect the security interest in the Trust Estate granted to
the Indenture Trustee on behalf of the Holders of the Notes.
(iv) other than the security interest granted to the
Indenture Trustee on behalf of the Holders of the Notes pursuant to the
Basic Documents, the Issuer has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Trust Estate. The
Issuer is not aware of any judgment or tax lien filings against it. The
Issuer has not authorized the filing of and is not aware of any
financing statements against the Issuer that include a description of
collateral covering the Trust Estate other than any financing statement
(i) relating to the security interest granted to Indenture Trustee on
behalf of the Holders of the Notes hereunder or (ii) that has been
terminated.
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ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01.The Notes. The Notes shall be registered in the name of a
nominee designated by the Depository. Beneficial Owners will hold interests in
the Notes as set forth in Section 4.06 herein. The minimum initial Note Balances
with respect to the Class A Notes and the Class M-1 Notes shall be $25,000 and
integral multiples of $1 in excess thereof, with respect to the Class M-2 Notes,
Class M-3 Notes, Class M-4 Notes and Class M-5 Notes shall be $250,000 and
integral multiples of $1 in excess thereof.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Notes for the
purposes of exercising the rights of Holders of Notes hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08,
Beneficial Owners shall not be entitled to definitive certificates for the Notes
as to which they are the Beneficial Owners. Requests and directions from, and
votes of, the Depository as Holder of the Notes shall not be deemed inconsistent
if they are made with respect to different Beneficial Owners. The Indenture
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Noteholders and give notice to the Depository of
such record date. Without the consent of the Issuer and the Indenture Trustee,
no Note may be transferred by the Depository except to a successor Depository
that agrees to hold such Note for the account of the Beneficial Owners.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Notes it
beneficially owns in the manner prescribed in Section 4.08.
The Notes shall, on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Note Registrar and delivered by the Indenture
Trustee to or upon the order of the Issuer.
Section 4.02.Registration of and Limitations on Transfer and Exchange of
Notes; Appointment of Certificate Registrar. The Issuer shall cause to be kept
at the Indenture Trustee's Corporate Trust Office a Note Register in which,
subject to such reasonable regulations as it may prescribe, the Note Registrar
shall provide for the registration of Notes and of transfers and exchanges of
Notes as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Issuer shall execute and the Note Registrar
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shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes in authorized initial Note Balances
evidencing the same aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may be
exchanged for other Notes of like tenor, in authorized initial Note Balances
evidencing the same aggregate Percentage Interests upon surrender of the Notes
to be exchanged at the Corporate Trust Office of the Note Registrar. Whenever
any Notes are so surrendered for exchange, the Issuer shall execute and the Note
Registrar shall authenticate and deliver the Notes which the Noteholder making
the exchange is entitled to receive. Each Note presented or surrendered for
registration of transfer or exchange shall (if so required by the Note
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form reasonably satisfactory to the Note Registrar duly executed by,
the Holder thereof or his attorney duly authorized in writing with such
signature guaranteed by a commercial bank or trust company located or having a
correspondent located in the city of New York. Notes delivered upon any such
transfer or exchange will evidence the same obligations, and will be entitled to
the same rights and privileges, as the Notes surrendered.
No service charge shall be imposed for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall be
cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Owner Trust Agreement in which, subject to such
reasonable regulations as it may prescribe, the Certificate Registrar shall
provide for the registration of the Certificate and of transfers and exchanges
thereof pursuant to Section 3.05 of the Owner Trust Agreement. The Indenture
Trustee hereby accepts such appointment.
Each purchaser of a Note, by its acceptance of the Note, shall be deemed
to have represented that either (i) it is not a Plan nor is it acquiring a Note
with Plan Assets or (2) the acquisition of such Note by the purchaser does not
constitute or give rise to a prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code, for which no statutory, regulatory or
administrative exemption is available.
The Notes may not be purchased with the assets of an ERISA plan if the
Depositor, the Master Servicer, the Grantor Trustee, the Indenture Trustee, the
Owner Trustee or any of their Affiliates:
(i) has investment or administrative discretion with
respect to the ERISA plan's assets;
(ii) has authority or responsibility to give, or regularly
gives, investment advice regarding the ERISA plan's assets, for a fee
and under an agreement or understanding
20
that the advice will serve as a primary basis for investment decisions
regarding the ERISA plan's assets and will be based on the particular
investment needs for the ERISA plan; or
(iii) is an employer maintaining or contributing to the
ERISA plan.
Section 4.03.Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8- 405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; provided, however, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder. The
provisions of this Section 4.03 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.
Section 4.04.Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
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Section 4.05.Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section 4.05, except as expressly
permitted by this Indenture. All cancelled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Request that they be destroyed or returned to it; provided however, that such
Issuer Request is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
Section 4.06.Book-Entry Notes. Each Class of Notes shall initially be
issued as one or more Notes held by the Book-Entry Custodian or, if appointed to
hold such Notes as provided below, the Depository Trust Company, the initial
Depository, and registered in the name of its nominee Cede & Co. Except as
provided below, registration of such Notes may not be transferred by the
Indenture Trustee except to another Depository that agrees to hold such Notes
for the respective Beneficial Owners. The Indenture Trustee is hereby initially
appointed as the Book-Entry Custodian and hereby agrees to act as such in
accordance herewith and in accordance with the agreement that it has with the
Depository authorizing it to act as such. The Book-Entry Custodian may, and, if
it is no longer qualified to act as such, the Book-Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Master Servicer
and, if the Indenture Trustee is not the Book-Entry Custodian, the Indenture
Trustee, any other transfer agent (including the Depository or any successor
Depository) to act as Book-Entry Custodian under such conditions as the
predecessor Book-Entry Custodian and the Depository or any successor Depository
may prescribe, provided that the predecessor Book-Entry Custodian shall not be
relieved of any of its duties or responsibilities by reason of any new
appointment, except if the Depository is the successor to the Book-Entry
Custodian. If the Indenture Trustee resigns or is removed in accordance with the
terms hereof, the successor trustee or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall have the right to inspect, and to obtain copies of, any Notes
held as Book-Entry Notes by the Book-Entry Custodian. No Beneficial Owner will
receive a Definitive Note representing such Beneficial Owner's interest in such
Note, except as provided in Section 4.08. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to Beneficial Owners
pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full
force and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Depository for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and the
giving of instructions or directions hereunder) as the sole holder of
the Notes, and shall have no obligation to the Owners of Notes;
(iii) to the extent that the provisions of this Section
4.06 conflict with any other provisions of this Indenture, the
provisions of this Section 4.06 shall control;
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(iv) the rights of Beneficial Owners shall be exercised
only through the Depository and shall be limited to those established by
law and agreements between such Owners of Notes and the Depository
and/or the Depository Participants. Unless and until Definitive Notes
are issued pursuant to Section 4.08, the initial Depository will make
book-entry transfers among the Depository Participants and receive and
transmit payments of principal of and interest on the Notes to such
Depository Participants; and
(v) whenever this Indenture requires or permits actions to
be taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the aggregate Note Balance of the
Notes, the Depository shall be deemed to represent such percentage only
to the extent that it has received instructions to such effect from
Beneficial Owners and/or Depository Participants owning or representing,
respectively, such required percentage of the beneficial interest in the
Notes and has delivered such instructions to the Indenture Trustee.
Section 4.07.Notices to Depository. Whenever a notice or other
communication to the Note Holders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Depository, and shall have no obligation to the Beneficial Owners.
Section 4.08.Definitive Notes. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Owners of Notes representing beneficial interests aggregating
at least a majority of the aggregate Note Balance of the Notes advise the
Depository in writing that the continuation of a book-entry system through the
Depository is no longer in the best interests of the Beneficial Owners, then the
Depository shall notify all Beneficial Owners and the Indenture Trustee of the
occurrence of any such event and of the availability of Definitive Notes to
Beneficial Owners requesting the same. Upon surrender to the Indenture Trustee
of the typewritten Notes representing the Book-Entry Notes by the Book-Entry
Custodian or the Depository, as applicable, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Depository.
In addition, if an Event of Default has occurred and is continuing, each
Note Owner materially adversely affected thereby may at its option request a
Definitive Note evidencing such Note Owner's Percentage Interest in the Notes.
In order to make such request, such Note Owner shall, subject to the rules and
procedures of the Depository, provide the Depository or the related Depository
Participant with directions for the Indenture Trustee to exchange or cause the
exchange of the Note Owner's interest in such Class of Notes for an equivalent
Percentage Interest in fully registered definitive form. Upon receipt by the
Indenture Trustee of instruction from the Depository directing the Indenture
Trustee to effect such exchange (such instructions to contain information
regarding the Note Balance being exchanged, the Depository Participant account
to be debited with the decrease, the registered holder of and delivery
instructions for the Definitive Notes and any other
23
information reasonable required by the Indenture Trustee), (i) the Indenture
Trustee shall instruct the Depository to reduce the related Depository
Participant's account by the aggregate Note Balance of the Definitive Notes,
(ii) the Issuer shall execute, and the Indenture Trustee shall authenticate and
deliver, in accordance with the registration and delivery instructions provided
by the Depository, a Definitive Note evidencing such Note Owner's Percentage
Interest in the Notes and (iii) the Issuer shall execute and the Indenture
Trustee shall authenticate a new Book-Entry Note reflecting the reduction in the
aggregate Note Balance of the Notes by the amount of the Definitive Notes.
None of the Issuer, the Note Registrar or the Indenture Trustee shall be
liable for any delay in delivery of any instruction required under this Section
and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Indenture Trustee shall
recognize the Holders of the Definitive Notes as Noteholders.
Section 0.00.Xxx Treatment. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness of the Issuer. The Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal, state and local income, single business and franchise tax
purposes as indebtedness of the Issuer.
Section 4.10.Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes, when
(A) either
(1) the Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 4.03 and (ii) Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section 3.03) have
been delivered to the Indenture Trustee for cancellation; or
(2) the Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable,
b. will become due and payable within one year, or
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c. have been declared immediately due and payable pursuant
to Section 5.02.
and the Issuer, in the case of a. or b. above, has irrevocably deposited
or caused to be irrevocably deposited with the Indenture Trustee cash or
direct obligations of or obligations guaranteed by the United States of
America (which will mature prior to the date such amounts are payable),
in trust for such purpose, in an amount sufficient to pay and discharge
the entire indebtedness on such Notes then outstanding not theretofore
delivered to the Indenture Trustee for cancellation when due on the
Final Scheduled Payment Date;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each meeting the
applicable requirements of Section 10.01 and each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with and, if the
Opinion of Counsel relates to a deposit made in connection with Section
4.10(A)(2)b. above, such opinion shall further be to the effect that
such deposit will not have any material adverse tax consequences to the
Issuer, any Noteholders or any Certificateholder.
Section 4.11.Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or
Certificate Paying Agent, as the Indenture Trustee may determine, to the Holders
of Securities, of all sums due and to become due thereon for principal and
interest; but such monies need not be segregated from other funds except to the
extent required herein or required by law.
Section 4.12.Reserved.
Section 4.13.Repayment of Monies Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Paying Agent shall be released from all further
liability with respect to such monies.
Section 4.14.Temporary Notes. Pending the preparation of any Definitive
Notes, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Notes that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
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If temporary Notes are issued, the Issuer will cause Definitive Notes to
be prepared without unreasonable delay. After the preparation of the Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
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ARTICLE V
Default and Remedies
Section 0.00.Xxxxxx of Default. The Issuer shall deliver to the
Indenture Trustee within five calendar days after learning of the occurrence
ofany event which with the giving of notice and the lapse of time would become
an Event of Default under clause (iii) of the definition of "Event of Default"
written notice in the form of an Officer's Certificate of its status and what
action the Issuer is taking or proposes to take with respect thereto.
Section 5.02.Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee or the Holders of Notes representing not less than a majority
of the aggregate Note Balance of all Notes may declare the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
unpaid principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes representing a
majority of the aggregate Note Balance of all Notes, by written notice to the
Issuer and the Indenture Trustee may in writing waive the related Event of
Default and rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on the Notes
and all other amounts that would then be due hereunder or upon the Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of
the principal of the Notes that has become due solely by such
acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03.Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
(a) Subject to Section 3.31, the Issuer covenants that if default in the
payment of (i) any interest on any Note when the same becomes due and payable,
and such default continues for a
27
period of five days, or (ii) the principal of or any installment of the
principal of any Note when the same becomes due and payable, the Issuer shall,
upon demand of the Indenture Trustee, pay to it, for the benefit of the Holders
of Notes, the whole amount then due and payable on the Notes for principal and
interest, with interest upon the overdue principal, and in addition thereto such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.17 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor upon the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee subject to the provisions of Section 10.17 hereof may, as more
particularly provided in Section 5.04, in its discretion, proceed to protect and
enforce its rights and the rights of the Noteholders, by such appropriate
Proceedings as the Indenture Trustee shall deem most effective to protect and
enforce any such rights, whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any power granted
herein, or to enforce any other proper remedy or legal or equitable right vested
in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the
Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective
agents, attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Indenture Trustee
and each predecessor Indenture Trustee, except as a result of
negligence, willful misconduct or bad faith) and of the Noteholders
allowed in such Proceedings;
28
(ii) unless prohibited by applicable law and regulations,
to vote on behalf of the Holders of Notes in any election of a trustee,
a standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to the Issuer, its creditors and its property; and
any trustee, receiver, liquidator, custodian or other similar official
in any such Proceeding is hereby authorized by each of such Noteholders
to make payments to the Indenture Trustee, and, in the event that the
Indenture Trustee shall consent to the making of payments directly to
such Noteholders, to pay to the Indenture Trustee such amounts as shall
be sufficient to cover reasonable compensation to the Indenture Trustee,
each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence, willful misconduct
or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
Section 5.04.Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing, the Indenture Trustee subject to the provisions of
Section 10.17 hereof may do one or more of the following (subject to Section
5.05):
29
(i) institute Proceedings in its own name and as trustee
of an express trust for the collection of all amounts then payable on
the Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes monies adjudged
due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate;
(iii) exercise any remedies of a secured party under the
UCC and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee and the Holders of the
Notes;
(iv) exercise its rights as Holder of the Grantor Trust
Certificate pursuant to Section 7.02 of the Grantor Trust Agreement
(provided, that the Indenture Trustee shall not exercise its rights
under such Section 7.02 unless and until an Event of Default has
occurred and is continuing);
(v) refrain from selling the Trust Estate and continue to
apply all amounts received thereon to payments on the Notes in
accordance with Section 3.05; and
(vi) sell the Trust Estate or any portion thereof or
rights or interest therein, at one or more public or private sales
called and conducted in any manner permitted by law; provided, however,
that the Indenture Trustee may not sell or otherwise liquidate the Trust
Estate following an Event of Default, unless (A) the Indenture Trustee
obtains the consent of the Holders of 100% of the aggregate Note Balance
of the Notes, (B) the proceeds of such Sale distributable to Holders are
sufficient to discharge in full all amounts then due and unpaid upon the
Notes for principal and interest or (C) the Indenture Trustee determines
that the Grantor Trust Certificate will not continue to provide
sufficient funds for the payment of principal of and interest on the
Notes as they would have become due if the Notes had not been declared
due and payable, and the Indenture Trustee obtains the consent of the
Holders of 66 2/3% of the aggregate Note Balance of the Notes. In
determining such sufficiency or insufficiency with respect to clause (B)
and (C), the Indenture Trustee may, but need not, obtain and rely upon
an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as
to the sufficiency of the Trust Estate for such purpose. Notwithstanding
the foregoing, so long as a Servicing Default has not occurred, any Sale
of the Trust Estate shall be made subject to the continued servicing of
the Home Loans by the Master Servicer as provided in the Servicing
Agreement.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
FIRST: to the Indenture Trustee for all amounts due under Section
6.07 herein and the Grantor Trustee for all amounts due under
Section 6.15 of the Grantor Trust Agreement; and
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SECOND: to the Holders of the Notes and the B Component for
amounts due and unpaid on the Notes and the B Component for
interest, according to the order and priority set forth in
Section 3.05(b), from amounts available in the Trust Estate for
such Noteholders;
THIRD: to the Holders of the Class A Notes, on a pro rata basis,
for amounts due and unpaid on such Class A Notes for principal,
from amounts available in the Trust Estate, until the Note
Balance thereof has been reduced to zero;
FOURTH: to the holders of the Class M Notes and the B Component,
for amounts due and unpaid on the Class M Notes and the B
Component for principal, from amounts available in the Trust
Estate, until the Note Balance and Component Principal Balance
thereof has been reduced to zero, in the following order of
priority: first, to the Class M-1 Notes, second, to the Class M-2
Notes, third, to the Class M-3 Notes, fourth, to the Class M-4
Notes, fifth, to the Class M-5 Notes, and sixth, to the B
Component.
FIFTH: to the Certificate Paying Agent for amounts due under
Article VIII of the Owner Trust Agreement; and
SIXTH: to the payment of the remainder, if any, to the Issuer or
any other person legally entitled thereto.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05.Optional Preservation of the Trust Estate. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may, but need not, elect to take and maintain
possession of the Trust Estate. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes and other obligations of the Issuer and
the Indenture Trustee shall take such desire into account when determining
whether or not to take and maintain possession of the Trust Estate. In
determining whether to take and maintain possession of the Trust Estate, the
Indenture Trustee may, but need not, obtain (at the expense of the Issuer) and
rely upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
Section 5.06.Limitation of Suits. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.17 hereof:
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(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the aggregate
Note Balance of the Notes have made written request to the Indenture
Trustee to institute such Proceeding in respect of such Event of Default
in its own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities
to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt
of such notice, request and offer of indemnity has failed to institute
such Proceedings; and
(v) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the aggregate Note Balance of the Notes.
It is understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the aggregate Note Balance of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07.Rights of Noteholders to Receive Principal and Interest.
Notwithstanding any other provisions in this Indenture, but subject to Section
3.31, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture and to institute suit for the enforcement of any such payment,
and such right shall not be impaired without the consent of such Holder.
Section 5.08.Restoration of Rights and Remedies. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their respective
former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
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Section 5.09.Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10.Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11.Control by Noteholders. The Holders of a majority of the
aggregate Note Balance of Notes shall have the right to direct the time, method
and place of conducting any Proceeding for any remedy available to the Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule
of law or with this Indenture;
(ii) subject to the express terms of Section 5.04, any
direction to the Indenture Trustee to sell or liquidate the Trust Estate
shall be by Holders of Notes representing not less than 100% of the
aggregate Note Balance of Notes;
(iii) if the conditions set forth in Section 5.05 have
been satisfied and the Indenture Trustee elects to retain the Trust
Estate pursuant to such Section, then any direction to the Indenture
Trustee by Holders of Notes representing less than 100% of the aggregate
Note Balance of Notes to sell or liquidate the Trust Estate shall be of
no force and effect; and
(iv) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent with
such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to
Section 6.01, the Indenture Trustee need not take any action that it determines
might involve it in liability or might materially adversely affect the rights of
any Noteholders not consenting to such action.
Section 5.12.Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02, the
Holders of Notes of not less than a majority of the aggregate Note Balance of
the Notes may waive any past Event of Default and its consequences except an
Event of Default (a) with respect to payment of principal of or interest on any
of the Notes or (b) in respect of a covenant or provision hereof which cannot be
modified or amended without the consent of the Holder of each Note. In the case
of any such waiver, the Issuer, the Indenture Trustee and the Holders of the
Notes shall be restored to their former positions and
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rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13.Undertaking for Costs. All parties to this Indenture agree,
and each Holder of any Note by such Xxxxxx's acceptance thereof shall be deemed
to have agreed, that any court may in its discretion require, in any suit for
the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
aggregate Note Balance of the Notes or (c) any suit instituted by any Noteholder
for the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture.
Section 5.14.Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
Section 0.00.Xxxx of Trust Estate. (a) The power to effect any sale,
liquidation or other disposition (a "Sale") of any portion of the Trust Estate
pursuant to Section 5.04 is expressly subject to the provisions of Section 5.05
and this Section 5.15. The power to effect any such Sale shall not be exhausted
by any one or more Sales as to any portion of the Trust Estate remaining unsold,
but shall continue unimpaired until the entire Trust Estate shall have been sold
or all amounts payable on the Notes and under this Indenture shall have been
paid. The Indenture Trustee may from time to time postpone any public Sale by
public announcement made at the time and place of such Sale. The Indenture
Trustee hereby expressly waives its right to any amount fixed by law as
compensation for any Sale.
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless:
(1) the Holders of all Notes consent to, or direct the Indenture Trustee to
make, such Sale, or
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(2) the proceeds of such Sale would not be less than the entire
amount which would be payable to the Noteholders under the Notes, the Indenture
Trustee hereunder and the Certificateholder under the Certificate in full
payment thereof in accordance with Section 5.02, on the Payment Date next
succeeding the date of such Sale, or
(3) the Indenture Trustee determines, in its sole discretion,
that the conditions for retention of the Trust Estate set forth in Section 5.05
cannot be satisfied (in making any such determination, the Indenture Trustee may
rely upon an opinion of an Independent investment banking firm obtained and
delivered as provided in Section 5.05), and the Holders representing at least
66-2/3% of the aggregate Note Balance of the Notes consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Unless the Holders have otherwise consented or directed the
Indenture Trustee, at any public Sale of all or any portion of the Trust Estate
at which a minimum bid equal to or greater than the amount described in
paragraph (2) of subsection (b) of this Section 5.15 has not been established by
the Indenture Trustee and no Person bids an amount equal to or greater than such
amount, the Indenture Trustee shall bid an amount at least $1.00 more than the
highest other bid.
(d) In connection with a Sale of all or any portion of the Trust Estate:
(1) any Holder or Holders of Notes may bid for and purchase the
property offered for sale, and upon compliance with the terms of sale may hold,
retain and possess and dispose of such property, without further accountability,
and may, in paying the purchase money therefor, deliver any Notes or claims for
interest thereon in lieu of cash up to the amount which shall, upon distribution
of the net proceeds of such sale, be payable thereon, and such Notes, in case
the amounts so payable thereon shall be less than the amount due thereon, shall
be returned to the Holders thereof after being appropriately stamped to show
such partial payment;
(2) the Indenture Trustee may bid for and acquire the property
offered for Sale in connection with any Sale thereof, and, subject to any
requirements of, and to the extent permitted by, applicable law in connection
therewith, may purchase all or any portion of the Trust Estate in a private
sale, and, in lieu of paying cash therefor, may make settlement for the purchase
price by crediting the gross Sale price against the sum of (A) the amount which
would be distributable to the Holders of the Notes and the Holder of the
Certificate as a result of such Sale in accordance with Section 5.04(b) on the
Payment Date next succeeding the date of such Sale and (B) the expenses of the
Sale and of any Proceedings in connection therewith which are reimbursable to
it, without being required to produce the Notes in order to complete any such
Sale or in order for the net Sale price to be credited against such Notes, and
any property so acquired by the Indenture Trustee shall be held and dealt with
by it in accordance with the provisions of this Indenture;
(3) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any portion of
the Trust Estate in connection with a Sale thereof;
35
(4) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in- fact of the Issuer to transfer and convey its interest in
any portion of the Trust Estate in connection with a Sale thereof, and to take
all action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any monies.
Section 5.16.Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b).
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ARTICLE VI
The Indenture Trustee
Section 6.01.Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read into
this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture; however, the Indenture
Trustee shall examine the certificates and opinions to determine whether
or not they conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer unless it
is proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section 5.11,
which it is entitled to give under any of the Basic Documents.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Owner Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that
37
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
Section 6.02.Rights of Indenture Trustee. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
Section 6.03.Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Sections 6.11 and 6.12.
Section 6.04.Indenture Trustee's Disclaimer. The Indenture Trustee shall
not be (i) responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, (ii) accountable for the Issuer's use
of the proceeds from the Notes or (iii) responsible for any statement of the
Issuer in the Indenture or in any document issued in connection with the sale of
the Notes or in the Notes other than the Indenture Trustee's certificate of
authentication.
Section 6.05.Notice of Event of Default. The Indenture Trustee shall
mail to each Noteholder notice of the Event of Default within 90 days after it
occurs. Except in the case of an Event of Default in payment of principal of or
interest on any Note, the Indenture Trustee may
38
withhold the notice if and so long as a committee of its Responsible Officers in
good faith determines that withholding the notice is in the interests of
Noteholders.
Section 6.06.Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required to
enable such holder to prepare its federal and state income tax returns. In
addition, upon the Issuer's written request, the Indenture Trustee shall
promptly furnish information reasonably requested by the Issuer that is
reasonably available to the Indenture Trustee to enable the Issuer to perform
its federal and state income tax reporting obligations.
Section 6.07.Compensation and Indemnity. The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The Indenture Trustee shall be compensated and indemnified by the Master
Servicer in accordance with Section 6.06 of the Servicing Agreement, and all
amounts owing to the Indenture Trustee hereunder in excess of such amount shall
be paid solely as provided in Section 3.05 hereof (subject to the priorities set
forth therein). The Indenture Trustee's compensation shall not be limited by any
law on compensation of a trustee of an express trust. The Issuer shall reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall indemnify the Indenture Trustee
against any and all loss, liability or expense (including attorneys' fees)
incurred by it in connection with the administration of this trust and the
performance of its duties hereunder. The Indenture Trustee shall notify the
Issuer promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer shall not relieve the Issuer of its
obligations hereunder. The Issuer shall defend any such claim, and the Indenture
Trustee may have separate counsel and the Issuer shall pay the fees and expenses
of such counsel. The Issuer is not obligated to reimburse any expense or
indemnify against any loss, liability or expense incurred by the Indenture
Trustee through the Indenture Trustee's own willful misconduct, negligence or
bad faith. The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
specified in clause (iv) or (v) of the definition thereof with respect to the
Issuer, the expenses are intended to constitute expenses of administration under
Title 11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.
Section 6.08.Replacement of Indenture Trustee. No resignation or removal
of the Indenture Trustee and no appointment of a successor Indenture Trustee
shall become effective until the acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee may
resign at any time by so notifying the Issuer. The Holders of a majority of the
aggregate Note Balance of the Notes may remove the Indenture Trustee by so
notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section
6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
39
(iii) a receiver or other public officer takes charge of
the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of the Indenture Trustee for any reason (the Indenture Trustee in such
event being referred to herein as the retiring Indenture Trustee), the Issuer
shall promptly appoint a successor Indenture Trustee. In addition, the Indenture
Trustee will resign to avoid being directly or indirectly controlled by the
Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of the aggregate Note
Balance of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09.Successor Indenture Trustee by Xxxxxx. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another corporation
or banking association, the resulting, surviving or transferee corporation
without any further act shall be the successor Indenture Trustee; provided, that
such corporation or banking association shall be otherwise qualified and
eligible under Section 6.11. The Indenture Trustee shall provide the Rating
Agencies written notice of any such transaction after the Closing Date.
In case at the time such successor or successors by merger, conversion
or consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to the Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full
40
force which it is anywhere in the Notes or in this Indenture provided that the
certificate of the Indenture Trustee shall have.
Section 6.10.Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Owner Trust, and to vest
in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part thereof, and, subject
to the other provisions of this Section, such powers, duties, obligations,
rights and trusts as the Indenture Trustee may consider necessary or desirable.
No co-trustee or separate trustee hereunder shall be required to meet the terms
of eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture Trustee joining in such act), except to the extent that under
any law of any jurisdiction in which any particular act or acts are to
be performed the Indenture Trustee shall be incompetent or unqualified
to perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to the Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
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(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11.Eligibility; Disqualification. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of A or better by Xxxxx'x. The Indenture
Trustee shall comply with TIA ss. 310(b), including the optional provision
permitted by the second sentence of TIA ss. 310(b)(9); provided, however, that
there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met.
Section 6.12.Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13.Representations and Warranties. The Indenture Trustee
hereby represents that:
(i) The Indenture Trustee is duly organized, validly
existing and in good standing under the laws of the State of New York
with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is
presently conducted.
(ii) The Indenture Trustee has the power and authority to
execute and deliver this Indenture and to carry out its terms; and the
execution, delivery and performance of this Indenture have been duly
authorized by the Indenture Trustee by all necessary corporate action.
(iii) The consummation of the transactions contemplated by
this Indenture and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of organization or bylaws of the Indenture Trustee or any
agreement or other instrument to which the Indenture Trustee is a party
or by which it is bound.
(iv) To the Indenture Trustee's best knowledge, there are
no proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Indenture Trustee or its
properties: (A) asserting the invalidity of this Indenture (B) seeking
to prevent the consummation of any of the transactions contemplated by
this Indenture or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Indenture Trustee
of its obligations under, or the validity or enforceability of, this
Indenture.
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(v) The Indenture Trustee does not have notice of any
adverse claim (as such terms are used in Delaware UCC Section 8-302)
with respect to the Grantor Trust Certificate.
Section 6.14.Directions to Indenture Trustee. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Grantor Trust Certificate and hold the
assets of the Trust in trust for the Noteholders;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibit A-1 and A-2 in accordance with the terms of this
Indenture; and
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture.
Section 6.15.Indenture Trustee May Own Securities. The Indenture
Trustee, in its individual or any other capacity may become the owner or pledgee
of Securities with the same rights it would have if it were not Indenture
Trustee.
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ARTICLE VII
Noteholders' Lists and Reports
Section 7.01.Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Notes as of such Record Date and, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; provided, however,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
Section 7.02.Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
and the names and addresses of Holders of Notes received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA ss. 312(c).
Section 7.03.Reports by Issuer. (a) The Issuer shall:
-----------------
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies of
the annual reports and the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may
from time to time by rules and regulations prescribe) that the Issuer
may be required to file with the Commission pursuant to Section 13 or
15(d) of the Exchange Act;
(ii) file with the Indenture Trustee, and the Commission
in accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by the Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA ss.
313(c)) such summaries of any information, documents and reports
required to be filed by the Issuer pursuant to clauses (i) and (ii) of
this Section 7.03(a) and by rules and regulations prescribed from time
to time by the Commission.
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(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04.Reports by Indenture Trustee. If required by TIA ss.
313(a), within 60 days after each January 1 beginning with January 1, 2005, the
Indenture Trustee shall mail to each Noteholder as required by TIA ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). The
Indenture Trustee also shall comply with TIA ss. 313(b). A copy of each report
at the time of its mailing to Noteholders shall be filed by the Indenture
Trustee with the Commission and each stock exchange, if any, on which the Notes
are listed. The Issuer shall notify the Indenture Trustee if and when the Notes
are listed on any stock exchange.
Section 0.00.Xxxxxxxx Act Reporting. In connection with the preparation
and filing of periodic reports by the Master Servicer pursuant to Section 4.04
of the Servicing Agreement, the Indenture Trustee shall timely provide to the
Master Servicer (I) a list of Holders as shown on the Note Register or
Certificate Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any claims,
charges or complaints involving the Indenture Trustee, as indenture trustee
hereunder, or the Trust Estate that are received by the Indenture Trustee, (III)
notice of all matters that, to the actual knowledge of a Responsible Officer of
the Indenture Trustee, have been submitted to a vote of the Holders, other than
those matters that have been submitted to a vote of the Holders at the request
of the Depositor or the Master Servicer, and (IV) notice of any failure of the
Indenture Trustee to make any distribution to the Holders as required pursuant
to this Indenture. Neither the Master Servicer nor the Indenture Trustee shall
have any liability with respect to the Master Servicer's failure to properly
prepare or file such periodic reports resulting from or relating to the Master
Servicer's inability or failure to obtain any information not resulting from the
Master Servicer's own negligence or willful misconduct. In connection with the
Form 10-K Certification (as defined in the Servicing Agreement), the Indenture
Trustee shall provide the Master Servicer with a back-up certification
substantially in the form attached hereto as Exhibit B. A supplemental indenture
may be entered into in accordance with the provisions of this Indenture to
revise this Section 7.05 without the consent of the Holders.
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ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01.Collection of Money. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 0.00.Xxxxx Accounts. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Noteholders and the Certificate
Paying Agent, on behalf of the Certificateholder, the Payment Account as
provided in Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment Account
pursuant to the Servicing Agreement and the Grantor Trust Agreement and all
deposits therein pursuant to this Indenture are for the benefit of the
Noteholders and the Certificate Paying Agent, on behalf of the Certificateholder
and all investments made with such monies including all income or other gain
from such investments are for the benefit of the Master Servicer as provided by
the Servicing Agreement and the Grantor Trust Agreement.
On each Payment Date, the Indenture Trustee shall distribute all amounts
on deposit in the Payment Account to Noteholders in respect of the Notes and in
its capacity as Certificate Paying Agent to the Certificateholder in the order
of priority set forth in Section 3.05 (except as otherwise provided in Section
5.04(b)).
The Master Servicer shall direct the Indenture Trustee in writing to
invest any funds in the Payment Account in Permitted Investments maturing no
later than the Business Day preceding each Payment Date and shall not be sold or
disposed of prior to the maturity.
Section 8.03.Officer's Certificate. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.05(a), accompanied by copies of any instruments to be
executed, and the Indenture Trustee shall also require, as a condition to such
action, an Officer's Certificate, in form and substance satisfactory to the
Indenture Trustee, stating the legal effect of any such action, outlining the
steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with.
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Section 8.04.Termination Upon Distribution to Noteholders. This
Indenture and the respective obligations and responsibilities of the Issuer and
the Indenture Trustee created hereby shall terminate upon the distribution to
the Noteholders, the Certificate Paying Agent (on behalf of the
Certificateholder) and the Indenture Trustee of all amounts required to be
distributed pursuant to Article III; provided, however, that in no event shall
the trust created hereby continue beyond the expiration of 21 years from the
death of the survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof.
Section 8.05.Release of Trust Estate. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture. No party relying upon an instrument executed by
the Indenture Trustee as provided in Article VIII hereunder shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding and (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate.
Section 8.06.Surrender of Notes Upon Final Payment. By acceptance of any
Note, the Holder thereof agrees to surrender such Note to the Indenture Trustee
promptly, prior to such Noteholder's receipt of the final payment thereon.
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ARTICLE IX
Supplemental Indentures
Section 9.01.Supplemental Indentures Without Consent of Noteholders. (a)
Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject to
the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct any error, or to
correct or supplement any provision herein or in any supplemental
indenture that may be inconsistent with any other provision herein, in
any supplemental indenture or in the Prospectus Supplement;
(vi) to make any other provisions with respect to matters
or questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not materially and adversely
affect the interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as shall
be necessary to facilitate the administration of the trusts hereunder by
more than one trustee, pursuant to the requirements of Article VI; or
(viii) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA; provided,
however, that no such indenture supplements shall be entered into unless
the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not (A) have any material
adverse tax consequences to the Noteholders and (B) adversely affect in
any
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material respect the interest of the Certificateholder. The Indenture
Trustee is hereby authorized to join in the execution of any such
supplemental indenture and to make any further appropriate agreements
and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel, (i) adversely affect in any material respect the interests
of any Noteholder or (ii) cause the Issuer to be subject to an entity level tax.
(c) The Issuer and the Indenture Trustee shall, as directed by the
Holder of the Certificate, enter into an indenture or indentures supplemental
hereto for the purpose of providing for the issuance of one or more additional
classes of Notes entitled to payments derived solely from all or a portion of
the payments to which the Certificate issued on the Closing Date pursuant to the
Trust Agreement are entitled; provided, however, that such action shall not, as
evidenced by an Opinion of Counsel, (i) adversely affect in any material respect
the interests of any Noteholder or (ii) cause the Issuer to be subject to an
entity level tax. Each such class of Notes shall be a non-recourse obligation of
the Issuer and shall be entitled to interest and principal in such amounts, and
to such security for the repayment thereof, as shall be specified in such
amendment or amendments. Promptly after the execution by the Issuer and the
Indenture Trustee of any amendments pursuant to this Section or the creation of
a new indenture and the issuance of the related class or classes of Notes, the
Issuer shall require the Indenture Trustee to give notice to the Holders of the
Notes and the Rating Agencies setting forth in general terms the substance of
the provisions of such amendment. Any failure of the Indenture Trustee to
provide such notice as is required under this paragraph, or any defect therein,
shall not, however, in any way impair or affect the validity of such amendment
or any class of Notes issued pursuant thereto.
Section 9.02.Supplemental Indentures With Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and with the consent of the
Holders of not less than a majority of the aggregate Note Balance of the Notes
affected thereby, by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Note affected thereby:
(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal amount
thereof or the interest rate thereon, change the provisions of this
Indenture relating to the application of collections on, or the proceeds
of the Sale of, the Trust Estate to payment of principal of or interest
on the Notes, or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or
impair the right to institute suit for the enforcement of the
49
provisions of this Indenture requiring the application of funds
available therefor, as provided in Article V, to the payment of any such
amount due on the Notes on or after the respective due dates thereof;
(ii) reduce the percentage of the related Note Balance of
any Class of Notes, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of which
is required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception in
the definition of the term "Holder";
(iv) reduce the percentage of the aggregate Note Balance
of the Notes required to direct the Indenture Trustee to direct the
Issuer to sell or liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to
increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the Basic Documents cannot be
modified or waived without the consent of the Holder of each Note
affected thereby;
(vi) modify any of the provisions of this Indenture in
such manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date (including the
calculation of any of the individual components of such calculation); or
(vii) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any part of
the Trust Estate or, except as otherwise permitted or contemplated
herein, terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture; and provided, further, that such
action shall not, as evidenced by an Opinion of Counsel, cause the
Issuer to be subject to an entity level tax.
and provided, further, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel that
entering into such indenture supplement will not adversely affect in any
material respect the interests of the Certificateholder or shall have received
the express written consent of the Certificateholder to the indenture
supplement.
The Indenture Trustee may in its discretion determine whether or not any
Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or
thereafter authenticated and delivered hereunder. The Indenture Trustee shall
not be liable for any such determination made in good faith.
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It shall not be necessary for any Act of Noteholders (as defined in
Section 10.03) under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes and the Custodian to which such amendment
or supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
Section 9.03.Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and conforms to the requirements of
the Trust Indenture Act. The Indenture Trustee may, but shall not be obligated
to, enter into any such supplemental indenture that affects the Indenture
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
Section 9.04.Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Notes affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section 9.05.Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
Section 9.06.Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
Miscellaneous
Section 10.01. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished. Every certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(1) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition and
the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such
signatory, such signatory has made such examination or investigation as
is necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(5) if the Signer of such Certificate or Opinion is
required to be Independent, the Statement required by the definition of
the term "Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the Indenture Trustee an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or
52
release since the commencement of the then-current fiscal year of the
Issuer, as set forth in the certificates delivered pursuant to clause
(i) above and this clause (ii), is 10% or more of the aggregate Note
Balance of the Notes, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the aggregate Note Balance of the
Notes.
(iii) Whenever any property or securities are to be
released from the lien of this Indenture, the Issuer shall also furnish
to the Indenture Trustee an Officer's Certificate certifying or stating
the opinion of each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities proposed
to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause
(iii) above, the Issuer shall also furnish to the Indenture Trustee an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than property as
contemplated by clause (v) below or securities released from the lien of
this Indenture since the commencement of the then-current calendar year,
as set forth in the certificates required by clause (iii) above and this
clause (iv), equals 10% or more of the aggregate Note Balance of the
Notes, but such certificate need not be furnished in the case of any
release of property or securities if the fair value thereof as set forth
in the related Officer's Certificate is less than $25,000 or less than
one percent of the then aggregate Note Balance of the Notes.
(v) Notwithstanding any provision of this Indenture, the
Issuer may, without compliance with the requirements of the other
provisions of this Section 10.01, (A) collect, sell or otherwise dispose
of the Grantor Trust Certificate as and to the extent permitted or
required by the Basic Documents or (B) make cash payments out of the
Payment Account as and to the extent permitted or required by the Basic
Documents, so long as the Issuer shall deliver to the Indenture Trustee
every six months, commencing December 31, 2004, an Officer's Certificate
of the Issuer stating that all the dispositions of Collateral described
in clauses (A) or (B) above that occurred during the preceding six
calendar months were in the ordinary course of the Issuer's business and
that the proceeds thereof were applied in accordance with the Basic
Documents.
Section 10.02. Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
53
Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Seller or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 10.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done
54
by the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
Section 10.04. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders is to be made upon, given or
furnished to or filed with:
(i) the Indenture Trustee by any Noteholder or by the
Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at the
Corporate Trust Office. The Indenture Trustee shall promptly transmit
any notice received by it from the Noteholders to the Issuer, or
(ii) the Issuer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in writing
and mailed first-class, postage prepaid to the Issuer addressed to: Home
Loan Trust 2004-HI1, in care of Wilmington Trust Company, or at any
other address previously furnished in writing to the Indenture Trustee
by the Issuer. The Issuer shall promptly transmit any notice received by
it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, to (i) in the case of
Moody's, at the following address: Xxxxx'x Investors Service, Inc., ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's, A
Division of the XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx - 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of Asset Backed Surveillance Department; or as
to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 10.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Person's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
55
In case, by reason of the suspension of regular mail service as a result
of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies, failure
to give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.
Section 10.06. Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee to such Holder, that is different
from the methods provided for in this Indenture for such payments or notices.
The Issuer shall furnish to the Indenture Trustee a copy of each such agreement
and the Indenture Trustee shall cause payments to be made and notices to be
given in accordance with such agreements.
Section 10.07. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control. The provisions of TIA
xx.xx. 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.
Section 10.08. Effect of Headings. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 10.09. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
Section 10.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 10.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
56
Section 10.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 10.13. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 10.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 10.16. Issuer Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
Section 10.17. No Petition. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer, or
join in any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
57
Section 10.18. Inspection. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the Indenture Trustee may reasonably determine that such
disclosure is consistent with its obligations hereunder.
58
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
HOME LOAN TRUST 2004-HI1,
as Issuer
By: Wilmington Trust Company
not in its individual capacity
but solely as Owner Trustee
By:
------------------------------------------
Name:
Title:
JPMORGAN CHASE BANK,
as Indenture Trustee
By:
------------------------------------------
Name: Xxxxx X. Xxxx
Title: Trust Officer
JPMORGAN CHASE BANK
hereby accepts the appointment as Paying Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section 4.02 hereof.
By:
-----------------------
Name: Xxxxx X. Xxxx
Title: Trust Officer
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
HOME LOAN TRUST 2004-HI1,
as Issuer
By: Wilmington Trust Company
not in its individual capacity
but solely as Owner Trustee
By:
-----------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
JPMORGAN CHASE BANK,
as Indenture Trustee
By:
----------------------------
Name: Xxxx XxXxxxxxx
Title: Vice President
JPMORGAN CHASE BANK
hereby accepts the appointment as Paying Agent pursuant to Section 3.03 hereof
and as Note Registrar pursuant to Section 4.02 hereof.
By:
------------------------------
Name: Xxxx XxXxxxxxx
Title: Vice President
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 29th day of March, 2004, before me personally appeared Xxxxx X.
Xxxx, to me known, who being by me duly sworn, did depose and say, that she
resides at New York , NY, that she is the Trust Officer of the Indenture
Trustee, one of the corporations described in and which executed the above
instrument; and that she signed her name thereto by like order.
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On this 29th day of March, 2004, before me the undersigned, Notary
Public of said State, personally appeared Xxxxx X. Xxxx, personally known to me
to be a duly authorized officer of JPMorgan Chase Bank that executed the within
instrument and personally known to me to be the person who executed the within
instrument on behalf of JPMorgan Chase Bank therein named, and acknowledged to
me such JPMorgan Chase Bank executed the within instrument pursuant to its by-
laws.
Notary Public
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this 29th day of March, 2004, before me personally appeared
___________________, to me known, who being by me duly sworn, did depose and
say, that he resides at Wilmington, DE, that he is the _________________ of
Wilmington Trust Company, as Owner Trustee, one of the corporations described in
and which executed the above instrument; and that he signed his name thereto by
like order.
Notary Public
NOTARIAL SEAL
EXHIBIT A-1
FORM OF NOTES
CLASS A-__ NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT EITHER
(1) IT IS NOT A PLAN NOR IS IT ACQUIRING THIS NOTE WITH PLAN ASSETS OR (2) THE
ACQUISITION OF THIS NOTE BY THE HOLDER DOES NOT CONSTITUTE OR GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.
1
HOME LOAN TRUST 2004-HI1
Home Loan-Backed Note
Registered Principal Amount: $___________
Class A-__
No. __ Percentage Interest: _____%
CUSIP No. ___________ Note Rate: _____%
Home Loan Trust 2004-HI1, a statutory trust duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of $___________, payable on each Payment
Date in an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable from the Payment Account in respect of
principal on the Class A-__ Notes pursuant to Section 3.05 of the Indenture
dated as of March 29, 2004 (the "Indenture") between the Issuer, as Issuer, and
JPMorgan Chase Bank, as Indenture Trustee (the "Indenture Trustee"); provided,
however, that the entire unpaid principal amount of this Note shall be due and
payable on the Payment Date in April 2029, to the extent not previously paid on
a prior Payment Date. Capitalized terms used but not defined herein are defined
in Appendix A of the Indenture.
[Interest on the Class A-__ Notes will be paid monthly on each
Payment Date at the Note Rate. The Note Rate for the Class A-__ Notes will be
_____% per annum. Interest will be computed on the basis of a 30-day month and a
360-day year. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof. On the Step-Up Date, the Note Rate on the Class
A-_ Notes will increase by 0.50% per annum.]
[Interest on the Class A-1 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. The Note
Rate for each Interest Accrual Period will be equal to the lesser of (i) LIBOR
plus___% per annum and (ii) ___% per annum. LIBOR for each applicable Interest
Accrual Period will be determined on the second LIBOR Business Day immediately
preceding (i) the Closing Date in the case of the first Interest Accrual Period
and (ii) the first day of each succeeding Interest Accrual Period by the
Indenture Trustee as set forth in the Indenture. All determinations of LIBOR by
the Indenture Trustee shall, in the absence of manifest error, be conclusive for
all purposes, and each holder of this Class A-1 Note, by accepting this Class
A-1 Note, agrees to be bound by such determination. Interest on this Class A-1
Note will accrue for each Payment Date from the most recent Payment Date on
which interest has been paid (in the case of the first Payment Date, from the
Closing Date) to but excluding such Payment Date. Interest will be computed on
the basis of the actual number of days in each Interest Accrual Period and a
year assumed to consist of 360 days. Principal of and interest on this Class A-1
Note shall be paid in the manner specified in the Indenture.]
Principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private
2
debts. All payments made by the Issuer with respect to this Note shall be
applied first to interest due and payable on this Note as provided above and
then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Home Loan-Backed Notes (herein called the "Notes"),
all issued under the Indenture, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
holders of the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on April 26, 2004, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due and
payable in full on the Payment Date in April 2029 pursuant to the Indenture, to
the extent not previously paid on a prior Payment Date. Notwithstanding the
foregoing, if an Event of Default shall have occurred and be continuing, then
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes may declare the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. Principal payments on the Notes shall be distributed in the manner
and priority set forth in Section 3.05 of the Indenture.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a
3
Payment Date, then the Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the Registered Holder hereof as of the
Record Date preceding such Payment Date by notice mailed or transmitted by
facsimile prior to such Payment Date, and the amount then due and payable shall
be payable only upon presentation and surrender of this Note at the address
specified in such notice of final payment.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
Corporate Trust Office, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by, the
holder hereof or such holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes in authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the Note Registrar shall require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any registration of
transfer or exchange of this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Master Servicer, the Depositor or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Master Servicer or the Issuer, or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
4
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the holders of Notes representing specified percentages of the
aggregate Note Balance of all Notes, on behalf of the holders of all the Notes,
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the holder of this Note (or any one of more Predecessor
Notes) shall be conclusive and binding upon such holder and upon all future
holders of this Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the Issuer
and the Indenture Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of holders of the Notes issued
thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor or
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the
5
principal of and interest on this Note at the times, place and rate, and in the
coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, JPMorgan Chase Bank, in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
HOME LOAN TRUST 2004-HI1
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Owner
Trustee
Dated: March __, 2004
By
---------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-__ Notes referred to in the within mentioned
Indenture.
JPMORGAN CHASE BANK, not in
its individual capacity but
solely as Indenture Trustee
Dated: March __, 2004
By
------------------------------------
Authorized Signatory
7
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
__________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________ , attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ______________ ___________________________ */
Signature Guaranteed:
_____________________________ / *
--------
1 NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
8
EXHIBIT A-2
FORM OF NOTES
CLASS M-__ NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR NOTES
AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE
SELLER, THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THE HOLDER OF THIS NOTE IS DEEMED TO HAVE REPRESENTED THAT EITHER
(1) IT IS NOT A PLAN NOR IS IT ACQUIRING THIS NOTE WITH PLAN ASSETS OR (2) THE
ACQUISITION OF THIS NOTE BY THE HOLDER DOES NOT CONSTITUTE OR GIVE RISE TO A
PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE,
FOR WHICH NO STATUTORY, REGULATORY OR ADMINISTRATIVE EXEMPTION IS AVAILABLE.
9
HOME LOAN TRUST 2004-HI1
Home Loan-Backed Note
Home Loan Trust 2004-HI1, a statutory trust duly organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of $___________, payable on each Payment
Date in an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable from the Payment Account in respect of
principal on the Class M-__ Notes pursuant to Section 3.05 of the Indenture
dated as of March 29, 2004 (the "Indenture") between the Issuer, as Issuer, and
JPMorgan Chase Bank, as Indenture Trustee (the "Indenture Trustee"); provided,
however, that the entire unpaid principal amount of this Note shall be due and
payable on the Payment Date in April 2029, to the extent not previously paid on
a prior Payment Date. Capitalized terms used but not defined herein are defined
in Appendix A of the Indenture.
[Interest on the Class M-__ Notes will be paid monthly on each
Payment Date at the Note Rate. The Note Rate for the Class M-__ Notes will be
_____% per annum. Interest will be computed on the basis of a 30-day month and a
360-day year. Principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof. On the Step-Up Date, the Note Rate on the Class
M-__ Note will increase by 0.50% per annum.]
Principal of and interest on this Note are payable in such coin
or currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed
by the Indenture Trustee whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Home Loan-Backed Notes (herein called the "Notes"),
all issued under the Indenture, to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights and obligations thereunder of the Issuer, the Indenture Trustee and the
holders of the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
3
Principal of and interest on this Note will be payable on each
Payment Date, commencing on April 26, 2004, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due and
payable in full on the Payment Date in April 2029 pursuant to the Indenture, to
the extent not previously paid on a prior Payment Date. Notwithstanding the
foregoing, if an Event of Default shall have occurred and be continuing, then
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes may declare the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. Principal payments on the Notes shall be distributed first to the
Senior Notes, and then sequentially to the Class M-1 Notes, Class M-2 Notes,
Class M-3 Notes, Class M-4 Notes and Class M-5 Notes, in that order, to the
holders of Notes entitled thereto.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Registered Holder of this Note (or one or more Predecessor
Notes) on the Note Register as of the close of business on each Record Date,
except that with respect to Notes registered on the Record Date in the name of
the nominee of the Depository Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain limitations
set forth therein, the transfer of this Note may be registered on the Note
Register upon surrender of this Note for registration of transfer at the
Corporate Trust Office, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by, the
holder hereof or such holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agent's Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended, and thereupon one or more new
Notes in authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee
4
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the Note Registrar shall require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any registration of transfer or exchange of this Note.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Master Servicer, the Depositor or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Master Servicer or the Issuer, or join in any
institution against the Depositor, the Seller, the Master Servicer or the Issuer
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, the Indenture or the
Basic Documents.
The Issuer has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business
and franchise tax purposes, the Notes will qualify as indebtedness of the
Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note
5
Balance of all Notes at the time Outstanding and with prior notice to the Rating
Agencies. The Indenture also contains provisions permitting the holders of Notes
representing specified percentages of the aggregate Note Balance of all Notes,
on behalf of the holders of all the Notes, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the holder of
this Note (or any one of more Predecessor Notes) shall be conclusive and binding
upon such holder and upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the Issuer and the Indenture Trustee to amend or waive
certain terms and conditions set forth in the Indenture without the consent of
holders of the Notes issued thereunder but with prior notice to the Rating
Agencies.
The term "Issuer" as used in this Note includes any successor or
the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in denominations
as provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be construed in accordance with
the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, JPMorgan Chase Bank, in its individual capacity, any
owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns shall be personally liable for, nor shall recourse be had to any of them
for, the payment of principal of or interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
HOME LOAN TRUST 2004-HI1
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Owner
Trustee
Dated: March __, 2004
By
-----------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-__ Notes referred to in the within mentioned
Indenture.
JPMORGAN CHASE BANK, not in
its individual capacity but
solely as Indenture Trustee
Dated: March __, 2004
By
----------------------------
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto
__________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________ , attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: ______________ ___________________________ */
Signature Guaranteed:
_____________________________ / *
--------
1 NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note Registrar
in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
EXHIBIT B
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
The undersigned, a Responsible Officer of JPMorgan Chase Bank (the
"Indenture Trustee") certifies that:
1. The Indenture Trustee has performed all of the duties specifically
required to be performed by it pursuant to the provisions of the Indenture dated
as of March 29, 2004 (the "Indenture") by and between Home Loan Trust 2004-HI1,
as the issuer (the "Issuer") and the Indenture Trustee in accordance with the
standards set forth therein.
2. Based on my knowledge, the information that is provided by the
Indenture Trustee pursuant to Section 7.05(I) of the Indenture is accurate as of
the last day of the 20___ calendar year.
Capitalized terms used and not defined herein shall have the meanings
given such terms in the Indenture.
IN WITNESS THEREOF, I have duly executed this certificate as of
____________, 20___
Name:
-----------------------------------
Title:
-----------------------------------
