Exhibit 4.3
INDENTURE
between
[ ]OWNER TRUST [2001]-[ ],
as Issuer,
and
[Trustee],
as Indenture Trustee,
[Securities Administrator and Custodian]
Dated as of [ ]
Relating to
[ ] OWNER TRUST [2001]-[ ]
ASSET-BACKED NOTES, SERIES [2001]-[ ]
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I DEFINITIONS.....................................................2
Section 1.01. General Definitions......................................2
ARTICLE II THE NOTES......................................................21
Section 2.01. Form Generally..........................................21
Section 2.02. Form of Certificate of Authentication...................21
Section 2.03. General Provisions With Respect to Principal and
Interest Payments.......................................21
Section 2.04. Denominations...........................................22
Section 2.05. Execution, Authentication, Delivery and Dating..........22
Section 2.06. Registration; Registration of Transfer and Exchange.....23
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes..............24
Section 2.08. Payments of Principal and Interest......................24
Section 2.09. Persons Deemed Owners...................................26
Section 2.10. Cancellation............................................26
Section 2.11. Authentication and Delivery of Notes....................27
Section 2.12. Book-Entry Notes........................................28
Section 2.13. Termination of Book Entry System........................29
ARTICLE III COVENANTS......................................................29
Section 3.01. Payment of Notes........................................29
Section 3.02. Maintenance of Office or Agency.........................30
Section 3.03. Money for Note Payments to Be Held In Trust.............30
Section 3.04. Existence of Issuer.....................................32
Section 3.05. Protection of Trust Estate..............................32
Section 3.06. Opinions as to Trust Estate.............................33
Section 3.07. Performance of Obligations; Servicing Agreement.........33
Section 3.08. Investment Company Act..................................34
Section 3.09. Negative Covenants......................................34
Section 3.10. Annual Statement as to Compliance.......................35
Section 3.11. Restricted Payments.....................................35
Section 3.12. Treatment of Notes as Debt for Tax Purposes.............35
Section 3.13. Notice of Events of Default.............................35
Section 3.14. Further Instruments and Acts............................35
Section 3.15. Covenants of the Indenture Trustee......................36
ARTICLE IV SATISFACTION AND DISCHARGE.....................................37
Section 4.01. Satisfaction and Discharge of Indenture.................37
Section 4.02. Application of Trust Money..............................38
ARTICLE V DEFAULTS AND REMEDIES..........................................38
Section 5.01. Event of Default........................................38
Section 5.02. Acceleration of Maturity; Rescission and Annulment......40
TABLE OF CONTENTS
(continued)
Page
----
Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee........................40
Section 5.04. Remedies................................................41
Section 5.05. Indenture Trustee May File Proofs of Claim..............41
Section 5.06. Indenture Trustee May Enforce Claims Without
Possession of Notes.....................................42
Section 5.07. Application of Money Collected..........................42
Section 5.08. Limitation on Suits.....................................43
Section 5.09. Unconditional Rights of Noteholders to Receive
Principal and Interest..................................44
Section 5.10. Restoration of Rights and Remedies......................44
Section 5.11. Rights and Remedies Cumulative..........................45
Section 5.12. Delay or Omission Not Waiver............................45
Section 5.13. Control by Noteholders..................................45
Section 5.14. Waiver of Past Defaults.................................45
Section 5.15. Undertaking for Costs...................................46
Section 5.16. Waiver of Stay or Extension Laws........................46
Section 5.17. Sale of Trust Estate....................................46
Section 5.18. Action on Notes.........................................48
Section 5.19. Application of Section 316(a) of the Trust
Indenture Act...........................................48
ARTICLE VI THE INDENTURE TRUSTEE..........................................48
Section 6.01. Duties of Indenture Trustee.............................48
Section 6.02. Notice of Default.......................................50
Section 6.03. Rights of Indenture Trustee.............................50
Section 6.04. Not Responsible for Recitals or Issuance of Notes.......50
Section 6.05. May Hold Notes..........................................51
Section 6.06. Money Held in Trust.....................................51
Section 6.07. Eligibility; Disqualification...........................51
Section 6.08. Indenture Trustee's Capital and Surplus.................51
Section 6.09. Resignation and Removal; Appointment of Successor.......51
Section 6.10. Acceptance of Appointment by Successor..................53
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee...........................53
Section 6.12. Preferential Collection of Claims Against Issuer........53
Section 6.13. Co-Indenture Trustees and Separate Indenture
Trustees................................................54
Section 6.14. Authenticating Agents...................................55
Section 6.15. Waiver of Setoff........................................56
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.................................56
Section 7.01. Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders................................56
Section 7.02. Preservation of Information; Communications to
Noteholders.............................................56
ii
TABLE OF CONTENTS
(continued)
Page
----
Section 7.03. Reports by Indenture Trustee............................57
Section 7.04. Reports by Issuer.......................................57
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND
RELEASES.....................................................................57
Section 8.01. Collection of Moneys....................................57
Section 8.02. Note Account............................................58
Section 8.03. [Claims against the Note Insurance Policy...............60
Section 8.04. General Provisions Regarding the Note Account and
Home Loans..............................................61
Section 8.05. Releases of Defective Home Loans........................62
Section 8.06. Reports by Indenture Trustee to Noteholders; Access
to Certain Information..................................63
Section 8.07. Amendment to Master Servicing Agreement.................63
Section 8.08. Servicer as Agent.......................................63
Section 8.09. Termination of Master Servicer..........................63
Section 8.10. Opinion of Counsel......................................64
Section 8.11. Appointment of Custodians...............................64
Section 8.12. [Rights of the Note Insurer to Exercise Rights of
Noteholders.............................................64
Section 8.13. [Trust Estate and Accounts Held for Benefit of the
Note Insurer............................................65
ARTICLE IX SUPPLEMENTAL INDENTURES........................................65
Section 9.01. Supplemental Indentures Without Consent of
Noteholders.............................................65
Section 9.02. Supplemental Indentures With Consent of Noteholders.....66
Section 9.03. Execution of Supplemental Indentures....................68
Section 9.04. Effect of Supplemental Indentures.......................68
Section 9.05. Conformity with Trust Indenture Act.....................68
Section 9.06. Reference in Notes to Supplemental Indentures...........68
Section 9.07. Amendments to Governing Documents.......................68
ARTICLE X REDEMPTION OF NOTES............................................69
Section 10.01. Redemption..............................................69
Section 10.02. Form of Redemption Notice...............................70
Section 10.03. Notes Payable on Optional Redemption....................70
ARTICLE XI NOTE ADMINISTRATION............................................70
Section 11.01. Powers and Duties of the Securities Administrator.......70
Section 11.02. Compensation; Payment of Certain Expenses...............71
Section 11.03. Instructions............................................71
Section 11.04. Benefit of the Agreement................................72
Section 11.05. Limitation of Responsibility of the Securities
Administrator...........................................72
Section 11.06. Termination of Securities Administrator.................72
ARTICLE XII MISCELLANEOUS..................................................73
iii
TABLE OF CONTENTS
(continued)
Page
----
Section 12.01. Compliance Certificates and Opinions....................73
Section 12.02. Form of Documents Delivered to Indenture Trustee........74
Section 12.03. Acts of Noteholders.....................................75
Section 12.04. Notices, etc. to Indenture Trustee[, the Note Insurer]
and Issuer..............................................75
Section 12.05. Notices and Reports to Noteholders; Waiver of Notices...76
Section 12.06. Rules by Indenture Trustee..............................77
Section 12.07. The Trust Indenture Act.................................77
Section 12.08. Effect of Headings and Table of Contents; References....77
Section 12.09. Successors and Assigns..................................77
Section 12.10. Separability............................................77
Section 12.11. Benefits of Indenture...................................78
Section 12.12. Legal Holidays..........................................78
Section 12.13. Governing Law...........................................78
Section 12.14. Counterparts............................................78
Section 12.15. Debt Instruments........................................78
Section 12.16. Issuer Obligation.......................................78
Section 12.17. No Petition.............................................79
Section 12.18. Inspection..............................................79
Section 12.19. Third Party Beneficiary.................................79
Section 12.20. Limitation of Liability.................................80
SCHEDULES AND EXHIBITS
Schedule I Mortgage Asset Schedule
Exhibit A Form of Class A Note
Exhibit B Asset Sale Agreement
Exhibit C Custodial Agreement
iv
THIS INDENTURE, dated as of [ ], [2001] (as amended or
supplemented from time to time as permitted hereby, this "Indenture"), is among
[ ] OWNER TRUST [2001]-[ ], a Delaware business trust (together
with its permitted successors and assigns, the "Issuer"), and [Trustee], a
[national banking association], as trustee (together with its permitted
successors in the trusts hereunder, the "Indenture Trustee"),[ as securities
administrator (together with its permitted successors and assigns in such
capacity, the "Securities Administrator") and as custodian (together with its
permitted successors and assigns in such capacity, the "Custodian")].
Preliminary Statement
---------------------
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for its Asset-Backed Notes, Series [2001]-[ ] Class A (the
"Class A Notes" or the "Notes"), issuable as provided in this Indenture. All
covenants and agreements made by the Issuer herein are for the benefit and
security of the Holders of the Notes[ and the Note Insurer]. The Issuer is
entering into this Indenture, and the Indenture Trustee is accepting the trusts
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged. All things necessary to make this Indenture a
valid agreement of the Issuer in accordance with its terms have been done.
Granting Clause
---------------
The Issuer hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Notes[ and the Note Insurer], all of the Issuer's
right, title and interest in and to (a) the Home Loans listed in Schedule I to
this Indenture (including property that secures any Home Loan that becomes an
REO Property), including the related Home Loan Files delivered or to be
delivered to the Indenture Trustee or the Custodian pursuant to the Asset Sale
Agreement, all payments of principal or interest received, collected or
otherwise recovered in respect of principal or interest after the Cut-off Date,
(b) the Master Servicing Agreement and [all] Servicing Agreements, (c) the Asset
Sale Agreement, (d) the Custodial Agreement, (e) the Owner Trust Agreement, [(f)
the Insurance Policies,] (g) all cash, instruments or other property held or
required to be deposited in the Asset Proceeds Account and the Note Account,
including all investments made with funds in such accounts (but not including
any income on funds deposited in, or investments made with funds deposited in,
the Asset Proceeds Account, which income shall belong to and be for the account
of the [Master] Servicer, [and not including any income on funds deposited in,
or investments made with funds deposited in the Note Account, which income shall
belong to and be for the account of the Indenture Trustee]), and (h) all
proceeds of the conversion, voluntary or involuntary, of any of the foregoing
into cash or other liquid assets, including, without limitation, all insurance
proceeds and condemnation awards. Such Grants are made, however, in trust, to
secure the Notes equally and ratably without prejudice, priority or distinction
between any Note and any other Note by reason of difference in time of issuance
or otherwise, [and for the benefit of the Note Insurer ]to secure (x) the
payment of all amounts due on the Notes in accordance with their terms, (y) the
payment of all other sums payable under this Indenture and (z) compliance with
the provisions of this Indenture, all as provided in this Indenture. All terms
used in the foregoing granting clauses that are defined in Section 1.01 are used
with the meanings given in said Section.
The Indenture Trustee acknowledges such Grant, accepts the trusts
hereunder in accordance with the provisions of this Indenture and agrees to
perform the duties herein required to the end that the interests of the Holders
of the Notes may be adequately and effectively protected. [The Indenture Trustee
agrees that it will hold the Note Insurance Policy in trust and that it will
hold any proceeds of any claim upon the Note Insurance Policy, solely for the
use and benefit of the Noteholders in accordance with the terms hereof and the
Note Insurance Policy.]
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions.
--------------------
Except as otherwise specified or as the context may otherwise require, the
following terms have the respective meanings set forth below for all purposes of
this Indenture, and the definitions of such terms are applicable to the singular
as well as to the plural forms of such terms and to the masculine as well as to
the feminine genders of such terms. Whenever reference is made herein to an
Event of Default or a Default known to the Indenture Trustee or of which the
Indenture Trustee has notice or knowledge, such reference shall be construed to
refer only to an Event of Default or Default of which the Indenture Trustee is
deemed to have notice or knowledge pursuant to Section 6.01(d). All other terms
used herein that are defined in the Trust Indenture Act (as hereinafter
defined), either directly or by reference therein, have the meanings assigned to
them therein.
"Accountant": A Person engaged in the practice of accounting who must be
Independent.
"Act": With respect to any Noteholder [or the Note Insurer,] as defined in
Section 12.03.
"Administrative Fee Amount": For any Payment Date, the sum of the
Servicing Fee, the Master Servicing Fee, the Indenture Trustee Fee, the
Custodial Fee [and the Note Insurer Premium,] each relating to such Payment
Date.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract, relation to individuals or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent": Any Note Registrar, Paying Agent, Authenticating Agent or
Custodian.
"Aggregate Principal Balance": With respect to any Payment Date, the
aggregate of the Principal Balances of the Home Loans as of the related
Determination Date (or other specified date).
2
"Annualized Loss Percentage": On any date of determination, the Realized
Losses for the previous Collection Period (net of any recoveries received during
such Collection Period) as a percentage of the Aggregate Principal Balance of
the Home Loans, multiplied by 12.
"Asset Proceeds Account": The segregated trust account established by the
Master Servicer and maintained pursuant to Section 2.02(b) of the Master
Servicing Agreement.
"Asset Sale Agreement": The Asset Sale Agreement, dated as of the date
hereof, between the Seller and the Depositor pursuant to which the Home Loans
will be acquired from the Seller by the Transferor and from the Transferor by
the Depositor, a copy of which agreement is attached hereto as Exhibit B.
---------
"Assignment Event": As defined in the Asset Sale Agreement.
"Assignment of Mortgage": As defined in the Asset Sale Agreement.
"Authenticating Agent": The Person, if any, appointed as Authenticating
Agent by the Issuer pursuant to Section 6.13, until any successor Authenticating
Agent for the Notes is named, and thereafter "Authenticating Agent" shall mean
such successor. The initial Authenticating Agent shall be the Indenture Trustee.
Any Authenticating Agent other than the Indenture Trustee shall sign an
instrument under which it agrees to be bound by all of the terms of this
Indenture applicable to the Authenticating Agent.
"Authorized Officer": With respect to the Indenture Trustee, any
Responsible Officer and with respect to any other Person, the Chairman, Chief
Operating Officer, President or any Vice President of such Person.
"Available Funds": With respect to the Notes and any Payment Date, the sum
of the amounts described in clauses (a) through (g) below, less (i) the
Administrative Fee Amount in respect of such Payment Date, (ii) Servicing
Advances previously made that are reimbursable to the Servicer (other than those
included in liquidation expenses for any Liquidated Home Loan and reimbursed
from the related Liquidation Proceeds) with respect to the related Collection
Period to the extent permitted by the Servicing Agreement and (iii) the
aggregate amounts (A) deposited into the Asset Proceeds Account or Note Account
that may not be withdrawn therefrom pursuant to a final and nonappealable order
of a United States bankruptcy court of competent jurisdiction imposing a stay
pursuant to Section 362 of the US Bankruptcy Code and that would otherwise have
been included in Available Funds on such Payment Date and (B) received by the
Indenture Trustee that are recoverable and sought to be recovered from the
Issuer as a voidable preference by a trustee in bankruptcy pursuant to the US
Bankruptcy Code in accordance with a final nonappealable order of a court of
competent jurisdiction:
(a) all scheduled payments of interest received with respect to the Home
Loans and due during the related Collection Period and all other interest
payments on or in respect of the Home Loans received by or on behalf of the
Servicer during the related Collection Period (including Payments Ahead that are
allocable to interest for the related Collection Period), plus any net income
from related REO Properties for such Collection Period;
3
(b) all scheduled payments of principal received with respect to the Home
Loans and due during the related Collection Period and all other principal
payments (including Principal Prepayments, but excluding amounts described
elsewhere in this definition) received or deemed to be received during the
related Collection Period (including Payments Ahead that are allocable as
principal for the related Collection Period) in respect of the Home Loans;
(c) the aggregate of any Trust Insurance Proceeds collected by the
Servicer during the related Collection Period;
(d) the aggregate of any Net Liquidation Proceeds collected by the
Servicer during the related Collection Period;
(e) the aggregate of the Purchase Prices received in respect of any Home
Loans that are required or permitted to be repurchased, released or removed by
the Seller during or in respect of the related Collection Period, to the extent
such amounts are received by the Indenture Trustee on or before the related
Deposit Date;
(f) the aggregate of amounts deposited in the Note Account during such
Collection Period in connection with redemption of the Notes pursuant to Article
X; and
(g) subsequent collections on Liquidated Home Loans to the extent of any
Realized Loss incurred with respect to such Home Loan, after payment to the
Servicer of any additional servicing compensation permitted under the Servicing
Agreement.
"Basic Documents": This Agreement, the Master Servicing Agreement, the
Servicing Agreement, the Owner Trust Agreement, the Asset Sale Agreement, the
Custodial Agreement, [the Insurance Agreement] and [the Indemnification
Agreement].
"Beneficial Owner": With respect to a Book-Entry Note, the Person who is
the beneficial owner of such Note as reflected on the books of the Clearing
Agency for the Notes or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
"Best Efforts": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Issuer or the
Servicer, as the case may be, in its reasonable discretion. Such efforts do not
require the Issuer or the Master Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Issuer or the Master Servicer, as the case may be, to advance or
expend fees or sums of money in addition to those specifically set forth in this
Indenture and the Master Servicing Agreement.
"Book-Entry Notes": Any Notes registered in the name of the Clearing
Agency or its nominee, ownership of which is reflected on the books of the
Clearing Agency or on the books of a person maintaining an account with such
Clearing Agency (directly or as an indirect participant in accordance with the
rules of such Clearing Agency).
"Book-Entry Termination": The time at which the book-entry registration of
the Book-Entry Notes shall terminate, as specified in Section 2.13.
4
"Business Day": Any day other than (i) a Saturday or Sunday or (ii) a day
that is either a legal holiday or a day on which banking institutions in the
State of [office of Master Servicer], the State of New York, the State of
[office of Trustee/Custodian] or the State of Delaware are authorized or
obligated by law, regulation or executive order to be closed.
"Certificate": As defined in the Owner Trust Agreement.
"Certificate Distribution Account": As defined in the Owner Trust
Agreement.
"Certificateholders": As defined in the Owner Trust Agreement.
"Class A Notes": Any of the Notes designated as Class A Notes and
evidenced by a duly executed and authenticated certificate substantially in the
form of Exhibit A hereto.
"Clean-Up Call Date": The first Payment Date on which the Note Balance is
equal to or less than [ ]% of the Original Note Balance.
"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder.
"Clearing Agency Participants": The entities for whom the Clearing Agency
will maintain book-entry records of ownership and transfer of Book-Entry Notes,
which may include securities brokers and dealers, banks and trust companies and
clearing corporations and certain other organizations.
"Closing Date": [ ], the date of initial issuance of the Notes.
"Code": The Internal Revenue Code of 1986, as amended, and as may be
further amended from time to time, as successor statutes thereto, and applicable
U.S. Department of Treasury regulations issued pursuant thereto in temporary or
final form and proposed regulations thereunder to the extent that, by reason of
their proposed effective date, such proposed regulations would apply.
"Collection Period": As to any Payment Date, the period beginning on the
first day of the calendar month immediately preceding the month in which such
Payment Date occurs and ending on the last day of such calendar month.
"Combined Loan-To-Value Ratio": As defined in the Master Servicing
Agreement.
"Commission": The Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934.
"Corporate Trust Office": The principal office of the Indenture Trustee at
which at any particular time its corporate trust business with respect to this
Indenture shall be principally administered, which office at the date of the
execution of this Indenture is located at [ ].
5
"Cumulative Realized Losses": The aggregate sum of the Realized Losses
from the Cut-off Date to any date of determination.
"Custodial Agreement": The Custodial Agreement, dated as of the date
hereof, between the Indenture Trustee and the Custodian, as such agreement may
be amended or supplemented from time to time as permitted hereby and thereby.
"Custodial Fee": With respect to any Payment Date, one-twelfth of 0.0[ ]%
of the Aggregate Principal Balance as of the applicable Determination Date.
"Custodian": [ ], and any additional or successor
custodian appointed by the Indenture Trustee pursuant to Section 8.13.
"Cut-off Date": [ ], the date after which all payments received
in respect of the Home Loans shall belong to the Issuer, subject to the Grant of
the same hereunder to the Indenture Trustee.
"Default": Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
"Defective Home Loan": Any Home Loan that is required to be repurchased by
the Seller pursuant to the Asset Sale Agreement.
["Deficiency Amount": With respect to any Payment Date, the sum of (i) the
Note Interest for such Payment Date minus Available Funds and (ii) the then
existing Overcollateralization Deficit, if any, after the application of
Available Funds to reduce the Note Balances on such Payment Date.]
"Definitive Notes": Notes other than Book-Entry Notes.
["Delinquency Amount": As of any Payment Date, the product of the
Delinquency Percentage for such Payment Date and the Aggregate Principal Balance
of the Home Loans as of the Determination Date relating to such Payment Date.]
["Delinquency Loss Factor": As of any Payment Date, the sum of (i) the
Principal Balance of all Home Loans that are 30-59 days delinquent multiplied by
[ ]%, (ii) the Principal Balance of all Home Loans that are 60-89 days
delinquent multiplied by [ ]%, (iii) the Principal Balance of all Home Loans
that are 90 or more days delinquent multiplied by [ ]%, and (iv) the Principal
Balance of all Home Loans that are modified in excess of the [ ]% limitation in
Section 2.04 of the Master Servicing Agreement. ]
["Delinquency Percentage": For any Payment Date, the rolling three month
average of the fraction, expressed as a percentage, (i) the numerator of which
is the aggregate of the Principal Balances as of the related Determination Date
of all Home Loans that were 60 or more days contractually delinquent, in
foreclosure, REO Property or for which the related Obligor was in a bankruptcy
proceeding or paying a reduced Monthly Payment as a result of a bankruptcy
workout or were modified in excess of the [ ]% limitation in Section 2.04 of the
Master Servicing
6
Agreement and (ii) the denominator of which is the Aggregate Principal Balance
of all Home Loans as of the related Determination Date.]
"Deposit Date": The date each month on which funds on deposit in the Asset
Proceeds Account are remitted by the Servicer to the Indenture Trustee for
deposit into the Note Account, which date shall be with respect to any Payment
Date, the 18th day of the month in which such Payment Date occurs, or the next
succeeding Business Day, if such 18th day is not a Business Day.
"Depositor": Southpoint Residential Mortgage Securities Corporation, a
Tennessee corporation.
"Determination Date": As to any Payment Date, the last day of the
Collection Period relating to such Payment Date.
"Eligible Account": Either (A) a segregated account or accounts maintained
with an institution the deposits of which are insured by the Bank Insurance Fund
or the Savings Association Insurance Fund of the FDIC, the unsecured and
uncollateralized debt obligations of which shall be rated "AA" or better by
[Standard & Poor's] and/or [Fitch] [and Aa2 or better by Moody's] or in the
highest short term rating category by each Rating Agency, and that is either (i)
a federal savings and loan association duly organized, validly existing and in
good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved in writing by the Note
Insurer or (B) a trust account maintained with the trust department of a federal
or state chartered depository institution or trust company, having capital and
surplus of not less than $100,000,000, acting in its fiduciary capacity, the
unsecured and uncollateralized debt obligations of which shall be rated "Baa3"
or better by Moody's.
"Event of Default": As defined in Section 5.01.
"Excess Cash": With respect to any Payment Date, the amount, if any, by
which Available Funds for such Payment Date exceed the sum of (i) [any amounts
payable to the Note Insurer for Insured Payments paid on prior Payment Dates and
not yet reimbursed and for any unpaid Note Insurer Premiums for prior Payment
Dates (in each case with interest thereon at the "Late Payment Rate" (as defined
in the Insurance Agreement)), (ii)] the Note Interest for the related Payment
Date, and (iii) the Monthly Principal for the related Payment Date.
"Excess Cash Payment": As defined in clause fourth of Section 8.02(c).
"FDIC": The Federal Deposit Insurance Corporation and its successors in
interest.
"Final Certification": A certification as to the completeness of each Home
Loan File provided by the Custodian on or before the first anniversary of the
Closing Date pursuant to the Custodial Agreement.
"Fitch": Fitch IBCA, Inc., and its successors in interest.
7
"Full Prepayment": With respect to any Home Loan, when any one of the
following occurs: (i) payment is made by the Obligor to the Servicer of 100% of
the outstanding principal balance of such Home Loan, together with all accrued
and unpaid interest thereon at the Mortgage Interest Rate on such Home Loan,
(ii) payment is made to the Indenture Trustee of the Purchase Price of such Home
Loan in connection with the purchase of such Home Loan by the holders of a
majority of the percentage interests of the Certificates, the Seller[ or the
Note Insurer] or (iii) payment is made to the Servicer of all Insurance Proceeds
and Liquidation Proceeds, and other payments, if any, that have been determined
by the Servicer in accordance with the provisions of the Servicing Agreement to
be finally recoverable, in the Servicer's reasonable judgment, in respect of
such Home Loan.
"Grant": To assign, transfer, mortgage, pledge, create and grant a
security interest in, deposit, set-over and confirm. A Grant of a Home Loan and
related Home Loan Files, a Permitted Investment, the Master Servicing Agreement,
the Servicing Agreement, the Asset Sale Agreement, the Owner Trust Agreement,
any Insurance Policy or any other instrument shall include all rights, powers
and options (but none of the obligations) of the Granting party thereunder,
including without limitation the immediate and continuing right to claim for,
collect, receive and give receipts for principal and interest payments
thereunder, insurance proceeds, Purchase Prices and all other moneys payable
thereunder and all proceeds thereof, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the Granting party or otherwise,
and generally to do and receive anything that the Granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Home Loan": Each of the loans Granted to the Indenture Trustee under this
Indenture as security for the Notes and that from time to time comprise part of
the Trust Estate, including any property that secures a Mortgage that becomes
REO Property. The Home Loans are listed on the Mortgage Asset Schedule annexed
hereto as Schedule I.
"Home Loan File": As defined in the Asset Sale Agreement.
"Indenture": This instrument as originally executed and, if from time to
time supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, as so supplemented or
amended. All references in this instrument to designated "Articles", "Sections",
"Subsections" and other subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this instrument as originally executed.
The words "herein", "hereof", "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision.
"Indenture Trustee": [ ], a national banking association, and
any Person resulting from or surviving any consolidation or merger to which it
may be a party until a successor Person shall have become the Indenture Trustee
pursuant to the applicable provisions of this Indenture, and thereafter
"Indenture Trustee" shall mean such successor Person.
"Indenture Trustee Fee": With respect to any Payment Date, one-twelfth
of [ ]% of the Note Balance as of the applicable Determination Date.
8
"Independent": When used with respect to any specified Person means such a
Person who (i) is in fact independent of the Issuer and any other obligor upon
the Notes, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer or in any such other obligor or in an
Affiliate of the Issuer or such other obligor, and (iii) is not connected with
the Issuer or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Indenture Trustee, such Person shall be
appointed by an Issuer Order and such opinion or certificate shall state that
the signer has read this definition and that the signer is Independent within
the meaning hereof.
"Individual Note": A Note of an original principal amount of $1,000
(provided, however, one Note may be less than that amount); a Note of an
original principal amount in excess of $1,000 shall be deemed to be a number of
Individual Notes equal to the quotient obtained by dividing such original
principal amount by $1,000.
"Initial Certification": The certification to be provided by the Custodian
on the Closing Date pursuant to the Custodial Agreement.
["Indemnification Agreement": As defined in the Insurance Agreement.]
["Insurance Agreement": The Insurance Agreement, dated as of the date
hereof, among the Note Insurer, the Issuer, the Seller, the Depositor, the
Indenture Trustee and the Master Servicer.]
"Insurance Policies": All insurance policies insuring any Home Loan or
Mortgaged Property, to the extent the Issuer or the Indenture Trustee has any
interest therein.
"Insurance Proceeds": As defined in the Master Servicing Agreement.
["Insured Payments": As to any Payment Date, the amount required to be
paid by the Note Insurer under the Note Insurance Policy pursuant to a Notice of
Claim presented by the Indenture Trustee (in the manner described in Section
8.03). The Insured Payment is (i) for any Payment Date, the Deficiency Amount
and (ii) any Preference Amount due and then owing under the Note Insurance
Policy.]
"Interest Period": [With respect to any Payment Date, the period beginning
on the first day of the calendar month preceding such Payment Date and ending on
the last day of such calendar month. All calculations of interest on the Notes
will be computed on the basis of a year of 360 days consisting of twelve 30-day
months.]
"Interim Certification": A certification as to the completeness of each
Home Loan File provided by the Custodian no later than 45 days following the
Closing Date pursuant to the Custodial Agreement.
"Issuer": [ ] Owner Trust [2001]-[ ], a Delaware business trust.
9
"Issuer Order" and "Issuer Request": A written order or request of the
Issuer signed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee and delivered to the Indenture Trustee or the Authenticating Agent, as
applicable.
"Liquidated Home Loan": As defined in the Master Servicing Agreement.
"Liquidation Proceeds": As defined in the Master Servicing Agreement.
"Master Servicer": With respect to any Home Loan, [ ], as Master
Servicer under the Master Servicing Agreement, and its permitted successors and
assigns thereunder, including any successor servicer appointed pursuant to
Section 6.02 of the Master Servicing Agreement.
"Master Servicer Remittance Report": As defined in the Master Servicing
Agreement.
"Master Servicing Agreement": The Master Servicing Agreement, dated as of
the date hereof, among the Issuer, the Master Servicer and the Indenture
Trustee, providing, among other things, for the servicing of the Home Loans, as
such agreement may be amended or supplemented from time to time as permitted
hereby and thereby.
"Master Servicing Fee": As defined in the Master Servicing Agreement.
"Master Servicing Fee Rate": [ ]% per annum.
"Maturity": With respect to any Note, the date on which the entire unpaid
principal amount of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity Date or by declaration of acceleration,
call for redemption or otherwise.
"Mortgage Asset Schedule": As of any date, the schedule of Home Loans
included in the Trust Estate. Schedule I hereto identifies the Home Loans being
Granted to the Indenture Trustee on the Closing Date. The Mortgage Asset
Schedule shall be amended by the Seller as appropriate from time to time to
reflect the deletion of Home Loans in accordance with the terms of the Basic
Documents. The Mortgage Asset Schedule shall identify each Home Loan by the
Servicer's loan number and address (including the state) of the related
Mortgaged Property and shall set forth as to each Home Loan the original
Combined Loan-to-Value Ratio, the lien priority of the related Mortgage, the
Principal Balance as of the Cut-off Date, the Mortgage Interest Rate, the
Monthly Payment amount and the stated maturity date of the related Mortgage
Note. The Issuer shall cause the initial Mortgage Asset Schedule to be delivered
by the Seller to the Indenture Trustee in both physical and computer-readable
form.
["Note Insurance Policy": The financial guaranty insurance policy (No. ),
dated [ ], issued by the Note Insurer to the Indenture Trustee for the
benefit of the Noteholders, pursuant to which the Note Insurer guarantees
payment of Insured Payments.]
["Note Payment Default": Failure and continued failure by the Note Insurer
to make an Insured Payment required under the Note Insurance Policy in
accordance with its terms.]
10
"Monthly Payment": With respect to any Mortgage Note, the amount of each
monthly payment payable under such Mortgage Note by the Obligor in accordance
with its terms, including one month's accrued interest on the related Principal
Balance at the then applicable Mortgage Interest Rate, but net of any portion of
such monthly payment that represents late payment charges, prepayment or
extension fees or collections allocable to payments to be made by Obligors for
payment of insurance premiums or similar items.
"Monthly Principal": For any Payment Date, an amount equal to (a) the
aggregate of (i) all scheduled payments of principal received with respect to
the Home Loans and due during the related Collection Period and all other
amounts collected, received or otherwise recovered in respect of principal on
the Home Loans (including Principal Prepayments, but not including Payments
Ahead that are not allocable to principal for the related Collection Period)
during or in respect of the related Collection Period, and (ii) the aggregate of
the amounts allocable to principal deposited in the Note Account on the related
Deposit Date by the holders of a majority of the percentage interests of the
Certificates, the Seller,[ or the Note Insurer] in connection with a repurchase,
purchase, release or removal of any Home Loans pursuant to this Indenture or any
other Basic Document, reduced by (b) the amount of any Overcollateralization
Surplus with respect to such Payment Date.
"Moody's": Xxxxx'x Investors Service, Inc. and its successors in interest.
"Mortgage": The mortgage, deed of trust or other instrument creating a
lien on an estate in fee simple in real property securing a Home Loan.
"Mortgage Interest Rate": With respect to each Home Loan, the fixed rate
per annum set forth in the related Mortgage Note at which interest accrues on
such Home Loan, after giving effect to any modification of a Home Loan for any
period in connection with a bankruptcy or similar proceeding involving the
related Obligor or a modification, waiver or amendment of such Home Loan granted
or agreed to by the Servicer in accordance with the Servicing Agreement.
"Mortgage Note": The note or other instrument evidencing the indebtedness
of an Obligor under the related Home Loan.
"Mortgaged Property": The underlying property securing a Mortgage Note.
"Net Liquidation Proceeds": As defined in the Servicing Agreement.
"Notes": Has the same meaning as "Class A Notes."
"Note Account": The segregated account, which shall be an Eligible
Account, established and maintained pursuant to Section 8.02 and entitled
"[ ], as Indenture Trustee for [ ] Owner Trust [2001]-[ ]
Asset-Backed Notes Series [2001]-[ ], Note Account" on behalf of the
Noteholders[ and the Note Insurer].
"Note Balance": As of any date of determination, the original principal
amount of the Notes, reduced by all prior payments (including Insured Payments),
if any, made with respect to the principal of the Notes.
11
["Note Insurer": [ ] and any successor thereto.]
["Note Insurer Commitment Letter": The Commitment Letter dated [ ],
from the Note Insurer to the Seller regarding the issuance of a financial
guaranty insurance policy.]
["Note Insurer Default": The existence and continuance of any of the
following:
(a) a Note Insurer Payment Default;
(b) the entry by a court having jurisdiction in the premises of (i) a
final and nonappealable decree or order for relief in respect of the Note
Insurer in an involuntary case or proceeding under any applicable United States
federal or state bankruptcy, insolvency, rehabilitation, reorganization or other
similar law of (ii) a final and nonappealable decree or order adjudging the Note
Insurer bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, rehabilitation, arrangement, adjustment or composition of or in
respect of the Note Insurer under any applicable United States federal or state
law, or appointing a custodian, receiver, liquidator, rehabilitator, assignee,
trustee, sequestrator or other similar official of the Note Insurer or of any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60 consecutive
days; or
(c) the commencement by the Note Insurer of a voluntary case or proceeding
under any applicable United States federal or state bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to be
adjudicated bankrupt or insolvent, or the consent of the Note Insurer to the
entry of a decree or order for relief in respect of the Note Insurer in an
involuntary case or proceeding under any applicable United States federal or
state bankruptcy, insolvency case or proceeding against the Note Insurer, or the
filing by the Note Insurer of a petition or answer or consent seeking
reorganization or relief under any applicable United States federal or state
law, or the consent by the Note Insurer to the filing of such petition or to the
appointment of or the taking possession by a custodian, receiver, liquidator,
assignee, trustee, sequestrator or similar official of the Note Insurer or of
any substantial part of its property, or the failure by the Note Insurer to pay
debts generally as they become due, or the admission by the Note Insurer in
writing of its inability to pay its debts generally as they become due, or the
taking of corporate action by the Note Insurer in furtherance of any such
action.
Notwithstanding anything to the contrary contained herein, upon the
existence and continuance of a Note Insurer Default, the consent by the Note
Insurer shall not be required to any action or inaction hereunder and the Note
Insurer shall not have any rights with respect thereto, except that the Note
Insurer shall be entitled to an Opinion of Counsel to the effect that such
amendment does not materially and adversely impair the Note Insurer's interests
if an amendment is requested while a Note Insurer Default is continuing.]
["Note Insurer Premium": On the Closing Date, the premium due to the Note
Insurer in paragraph 1(a)(i) of the Note Insurer Commitment Letter and
thereafter the premium due to the Note Insurer on each Payment Date, which
amount shall be equal to the Note Insurer Premium Rate and the Note Balance
immediately prior to such Payment Date.]
12
["Note Insurer Premium Rate": On the Closing Date, the Premium Percentage
specified in paragraph 1(a)(i) of the Note Insurer Commitment Letter and
beginning on [ ] and on each Payment Date thereafter, the Premium Percentage
specified in paragraph 1(b) thereof. ]
"Note Interest": As to any Payment Date, the amount of interest payable to
Holders of the Notes on such Payment Date, which amount shall be equal to
interest for the applicable Interest Period at the Note Interest Rate on the
Note Balance as of the preceding Payment Date (after giving effect to the
payment, if any, in reduction of principal made on the Notes on such preceding
Payment Date).
"Note Interest Rate": [ ]% per annum; provided that, if the Notes are
-------------
not redeemed on the Clean-Up Call Date, then with respect to each Payment Date
thereafter, the Note Interest Rate shall be [ ]% per annum.
"Note Register": As defined in Section 2.06.
"Note Registrar": As defined in Section 2.06.
"Noteholder" or "Holder": The Person in whose name a Note is registered in
the Note Register, except that, solely for the purpose of taking any action
under Section 5.02 or giving of any consent pursuant to this Indenture, any Note
registered in the name of the Issuer, the Seller, the Master Servicer or the
Depositor or any Persons actually known by a Responsible Officer of the
Indenture Trustee to be an Affiliate of the Issuer, the Seller, the Master
Servicer or the Depositor shall be deemed not to be Outstanding and the
percentage of the Note Balance evidenced thereby shall not be taken into account
in determining whether Holders of the requisite percentage of the Note Balance
necessary to take any such action or effect any such consent have acted or
consented unless the Issuer, the Seller, the Master Servicer, the Depositor or
any such Person is an owner of record of all of the Notes.
["Notice of Claim": The notice required to be furnished by the Indenture
Trustee to the Note Insurer in the event an Insured Payment is required to be
paid under the Note Insurance Policy with respect to any Payment Date, in the
form set forth as Exhibit A to the Note Insurance Policy.]
"Obligor": The obligor under a Mortgage Note.
"Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President, Chief Operating Officer or
a Vice President of the Seller, the Depositor, the Master Servicer or, in the
case of the Issuer, an authorized signatory of the Owner Trustee, as the case
may be, and delivered to the Indenture Trustee, [Note Insurer] or each Rating
Agency, as the case may be.
"Opinion of Counsel": A written opinion of counsel including in-house
counsel reasonably acceptable to the Indenture Trustee and, in the case of
opinions delivered to the Note Insurer, reasonably acceptable to it. Any expense
related to obtaining an Opinion of Counsel for an action requested by a party
shall be borne by the party required to obtain such opinion or seeking to effect
the action that requires the delivery of such Opinion of Counsel, except in such
13
instances where such opinion is at the request of the Indenture Trustee, in
which case such expense shall be an expense of the Seller.
"Original Note Balance": The principal balance of the Notes at the
issue date thereof equal to $[ ].
"Outstanding": As of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(a) Definitive Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(b) Notes or portions thereof for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Indenture Trustee or
any Paying Agent (other than the Issuer) in trust for the Holders of such Notes;
provided, however, that if such Notes are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made;
(c) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to this Indenture unless proof satisfactory
to the Indenture Trustee is presented that any such Notes are held by a bona
fide purchaser (as defined by the Uniform Commercial Code of the applicable
jurisdiction); and
(d) Notes alleged to have been destroyed, lost or stolen that have been
paid as provided for in Section 2.07; and;
(e) Notes for which the related Stated Maturity Date has occurred;
provided, however, that in determining whether the Holders of the requisite
percentage of the Note Balance of the Outstanding Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Notes
owned by the Issuer, any other obligor upon the Notes or any Affiliate of the
Issuer, the Seller, the Master Servicer or the Depositor or such other obligor
shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Indenture Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that the Indenture Trustee knows to be so owned shall be so disregarded.
Notes so owned that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes or any Affiliate of
the Issuer, the Seller, the Master Servicer or the Depositor or such other
obligor[; provided, further, however, that Notes that have been paid with the
proceeds of the Note Insurance Policy shall be deemed to be Outstanding for the
purposes of this Indenture, such payment to be evidenced by written notice from
the Note Insurer to the Indenture Trustee, and the Note Insurer shall be deemed
to the Holder thereof to the extent of any payments thereon made by the Note
Insurer].
["Overcollateralization Amount": As to any Payment Date, the amount, if
any, by which (x) the Aggregate Principal Balance of the Home Loans for such
Payment Date exceeds (y) the Note Balance for such Payment Date, after taking
into account the Monthly Principal
14
(disregarding any permitted reduction thereof in Monthly Principal due to an
Overcollateralization Surplus made on such Payment Date) to be applied in
reduction of the Note Balance on such Payment Date. If the Aggregate Principal
Balance of the Home Loans is less than the Note Balance for such Payment Date,
determined as provided above, the Overcollateralization Amount for such Payment
Date shall be zero.]
["Overcollateralization Deficit": As to any Payment Date, the amount, if
any, by which the Note Balance on such Payment Date (after taking into account
any payments to be paid on such Payment Date in reduction of the Note Balance)
exceeds the Aggregate Principal Balance of the Home Loans for such Payment Date.
If the Aggregate Principal Balance of the Home Loans as determined pursuant to
the preceding sentence is greater than the Note Balance for such Payment Date
determined as provided above, the Overcollateralization Deficit for such Payment
Date shall be zero.]
["Overcollateralization Surplus": As to any Payment Date, the amount, if
any, by which (x) the Overcollateralization Amount on such Payment Date exceeds
(y) the Required Overcollateralization Amount on such Payment Date.]
"Owner Trust Agreement": The Owner Trust Agreement, dated as of the date
hereof, between the Depositor, the Master Servicer, the Trust Paying Agent and
the Owner Trustee.
"Owner Trustee": [ ], a [ ] banking corporation, not in
its individual capacity, but solely as owner trustee under the Owner Trust
Agreement, and any successor owner trustee thereunder.
"Paying Agent": The [Indenture Trustee] or any other depository
institution or trust company that is authorized by the Issuer pursuant to
Section 3.03 to pay the principal of, or interest on, any Notes on behalf of the
Issuer, which agent, if not the Indenture Trustee, shall have signed an
instrument agreeing to be bound by the terms of this Indenture applicable to the
Paying Agent.
"Payment Ahead": As defined in the Master Servicing Agreement.
"Payment Date": The 25th day of each month or, if any such day is not a
Business Day, the Business Day immediately following such 25th day, beginning in
[ ].
"Payment Date Statement": The statement prepared pursuant to Section
2.08(e) with respect to collections on or in respect of the Home Loans and other
assets of the Trust Estate and payments on or in respect of the Notes, based
upon the information contained in the [Master] Servicer Remittance Report
prepared pursuant to the [Master] Servicing Agreement and setting forth the
following information with respect to each Payment Date (to the extent the
Master Servicer has made such information (other than the information described
in clause (a) (ii), (b), (c), (d) and (e) below) available to the Securities
Administrator):
(a) the amount of such payment to Noteholders allocable to (i) Monthly
Principal (separately setting forth Principal Prepayments) and (ii) any Excess
Cash Payment;
(b) the amount of such payment to Noteholders allocable to Note Interest;
15
(c) the Note Balance after giving effect to the payment of Monthly
Principal and any Excess Cash Payment applied to reduce the Note Balance on such
Payment Date;
[(d) the amount of any Insured Payments for such Payment Date;]
[(e) the Overcollateralization Amount, the then applicable Required
Overcollateralization Amount, the Overcollateralization Surplus, if any, and the
Overcollateralization Deficit, if any, with respect to such Payment Date; ]
(f) the Aggregate Principal Balance of the Home Loans as of the end of the
related Collection Period;
(g) the amount of Servicing Advances made with respect to such Payment
Date and the amount of unreimbursed Servicing Advances, if any;
(h) the number and aggregate of the Principal Balances of Home Loans
(including the Principal Balances of all Home Loans in foreclosure)
contractually delinquent (i) one month, (ii) two months and (iii) three or more
months, as of the end of the related Collection Period;
(i) the number and aggregate of the Principal Balances of the Home Loans
in foreclosure or subject to other similar proceedings, and the number and
aggregate of the Principal Balance of Home Loans, the Obligor of which is known
by the Servicer to be in bankruptcy as of the end of the related Collection
Period and the book value of any real estate acquired through foreclosure, grant
of a deed in lieu of foreclosure or other similar proceedings during the related
Collection Period;
(j) the aggregate of the Principal Balances of the Home Loans
repurchased by the Seller or purchased by the Master Servicer, separately
setting forth the aggregate of the Principal Balances of Home Loans delinquent
for three consecutive monthly installments purchased by the Master Servicer at
its option pursuant to the Master Servicing Agreement;
(k) the aggregate amount of the Servicing Fee paid to or retained by the
Servicer, the aggregate amount of the Master Servicing Fee paid to the Master
Servicer, and the Administrative Fee Amount, in each case for the related
Collection Period;
(l) the aggregate Principal Balance of the three largest outstanding
Home Loans subject to this Indenture as of the related Determination Date;
(m) the aggregate amount of Realized Losses incurred during the related
Collection Period and the Cumulative Realized Losses since the Cut-off Date;
(n) the Rolling Delinquency Percentage, the Rolling Loss Percentage, the
Cumulative Loss Percentage, the Delinquency Loss Factor and Total Expected
Losses (each as defined in the Servicing Agreement) relating to such Payment
Date;
(o) the Rolling Three-Month Average Annualized Losses, the Delinquency
Percentage and the Total Expected Losses (as defined herein) relating to such
Payment Date; and
16
(p) the percentage of Home Loans (as measured by the Aggregate Principal
Balance of such Home Loans) of the Initial Pool Balance that have been modified
by the Servicer during the related Collection Period and the percentage of Home
Loans (as measured by the Aggregate Principal Balance of such Home Loans) of the
Initial Pool Balance that have been modified by the Servicer since the Cut-off
Date.
In the case of information furnished pursuant to subclauses (a) and (b) above,
the amounts shall be expressed as a dollar amount per Individual Note.
"Percentage Interest": With respect to a Note, the undivided percentage
interest (carried to eight places rounded down) obtained by dividing the
original principal balance of such Note by the Original Note Balance and
multiplying the result by 100.
"Permitted Investments": One or more of the following obligations,
instruments and securities:
(a) direct general obligations of, or obligations fully guaranteed by, the
United States of America, the Federal Home Loan Mortgage Corporation, Federal
National Mortgage Corporation, the Federal Home Loan Banks or any agency or
instrumentality of the United States of America rated Aa3 or higher by Xxxxx'x,
the obligations of which are backed by the full faith and credit of the United
States of America;
(b) (i) demand and time deposits in, certificates of deposit of, banker's
acceptances issued by, or federal funds sold by any depository institution or
trust company (including the Indenture Trustee or its agent acting in their
respective commercial capacities) incorporated under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the time of such
investment or contractual commitment providing for such investment, such
depository institution or trust company or its ultimate parent has a short-term
uninsured debt rating in one of the two highest available rating categories of
[Standard & Poor's] and/or [Fitch][and the highest available rating category of
Moody's] and provided that each such investment has an original maturity of no
more than 365 days and (ii) any other demand or time deposit or deposit which is
fully insured by the FDIC;
(c) repurchase obligations with a term not to exceed 30 days with respect
to any security described in clause (a) above and entered into with a depository
institution or trust company (acting as a principal) rated A or higher by
[Standard & Poor's] and/or [Fitch] [and rated A2 or higher by Moody's];
provided, however, that collateral transferred pursuant to such repurchase
obligation must be of the type described in clause (a) above and must (i) be
valued daily at current market price plus accrued interest, (ii) pursuant to
such valuation, be equal, at all times, to 105% of the cash transferred by the
Indenture Trustee in exchange for such collateral, and (iii) be delivered to the
Indenture Trustee or, if the Indenture Trustee is supplying the collateral, an
agent for the Indenture Trustee, in such a manner as to accomplish perfection of
a security interest in the collateral by possession of certificated securities;
(d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which has a
17
long-term unsecured debt rating in the highest available rating category of each
of the Rating Agencies at the time of such investment;
(e) commercial paper having an original maturity of less than 365 days and
issued by an institution having a short-term unsecured debt rating in the
highest available rating category of each of the Rating Agencies at the time of
such investment;
(f) a guaranteed investment contract approved by each of the Rating
Agencies and the Note Insurer and issued by an insurance company or other
corporation having a long-term unsecured debt rating in the highest available
rating category of each of the Rating Agencies at the time of such investment;
(g) money market funds having ratings in [the highest available rating
category of Moody's and] one of the two highest available rating categories of
[Standard & Poor's] and/or [Fitch] at the time of such investment (any such
money market funds which provide for demand withdrawals being conclusively
deemed to satisfy any maturity requirements for Permitted Investments set forth
herein) including money market funds of the Seller or the Indenture Trustee and
any such funds that are managed by the Seller or the Indenture Trustee or their
respective Affiliates or for which the Seller or the Indenture Trustee or any
Affiliate of either acts as advisor, as long as such money market funds satisfy
the criteria of this subparagraph (g); and
(h) any investment for which the Master Servicer has received written
evidence that any such investment will not result in a downgrading or withdrawal
of the rating by each Rating Agency on the Notes.
The Indenture Trustee may purchase from or sell to the Seller or itself or an
Affiliate of either, as principal or agent, the Permitted Investments listed
above. All Permitted Investments in a trust account under the Indenture shall be
made in the name of the Indenture Trustee for the benefit of the Noteholders
[and the Note Insurer.]
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"Predecessor Notes": With respect to any particular Note, every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note ; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or
stolen Note .
["Preference Amount": As defined in the Note Insurance Policy.]
"Principal Balance": As defined in the Master Servicing Agreement.
"Principal Prepayment": As defined in the Master Servicing Agreement.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
18
"Purchase Price": With respect to any Defective Home Loan, an amount equal
to (i) the sum of (A) the Principal Balance of such Defective Home Loan as of
the beginning of the Collection Period next preceding the Deposit Date on which
such repurchase or purchase is required to occur, (B) interest computed at the
applicable Mortgage Interest Rate on such Principal Balance from the date to
which interest was last paid by the Obligor to the last day of the Collection
Period immediately preceding the Deposit Date on which such repurchase occurs
and (C) any previously unreimbursed Servicing Advances made on or in respect of
such Defective Home Loan, less (ii) any payments of principal and interest in
respect of such Defective Home Loan made by or on behalf of the related Obligor
during such Collection Period.
"Rating Agencies": [Standard & Poor's], [Fitch,] and [Xxxxx'x] (each, a
"Rating Agency"). If either such agency or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
credit rating agency, or other comparable Person, designated by the Servicer,
notice of which designation shall be given to the Indenture Trustee.
"Realized Loss": As defined in the Master Servicing Agreement.
"Record Date": With respect to any Payment Date, the date on which the
Persons entitled to receive any payment of principal of or interest on any Notes
(or notice of a payment in full of principal) due and payable on such Payment
Date are determined; such date shall be the last Business Day of the month
preceding the month of such Payment Date. With respect to a vote of Noteholders
required or allowed hereunder, the Record Date shall be the later of (i) 30 days
prior to the first solicitation of consents or (ii) the date of the most recent
list of Noteholders furnished to the Indenture Trustee pursuant to Section
7.01(a) prior to such solicitation.
"Redemption Date": The Payment Date, if any, on which the Notes are
redeemed pursuant to Article X hereof which date may occur on or after the
Clean-Up Call Date or the Payment Date designated by the Issuer after receipt by
the Indenture Trustee of the Opinion of Counsel referred to in Section 10.01(c).
"Redemption Price": With respect to any Note to be redeemed in whole or in
part, an amount equal to 100% of the Note Balance of the Note to be so redeemed,
together with accrued and unpaid interest on such amount at the Note Interest
Rate, through the end of the Interest Period immediately preceding the
Redemption Date.
"Remittable Funds": As defined in the Master Servicing Agreement.
"REO Property": As defined in the Master Servicing Agreement.
["Required Overcollateralization Amount" means: ]
"Responsible Officer": With respect to the Indenture Trustee, the chairman
or vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, any vice
president, any assistant vice president, the secretary, any assistant secretary,
the treasurer, any assistant treasurer, the cashier, any trust officer or
assistant trust officer, the controller, any assistant controller or any other
officer of the Indenture Trustee customarily performing functions similar to
those performed by any of the above designated officers and also, with respect
to a particular corporate trust matter, any other
19
officer to whom such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Rolling Three Month Average Annualized Losses": The average of the
Annualized Loss Percentages for three most recent Collection Periods.
"Sale": The meaning specified in Section 5.17.
"Securities Act": The Securities Act of 1933, as amended.
"Securities Administrator": [ ], as Securities Administrator
hereunder, and any successor Securities Administrator appointed hereunder.
"Seller": [ ], as Seller under the Asset Sale Agreement.
"Servicing Advance": As defined in the Master Servicing Agreement.
"Standard & Poor's": Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., and its successors in interest.
"Stated Maturity Date": With respect to the Class A Notes, [ ].
"Total Expected Losses": An amount equal to the Cumulative Realized Losses
plus the Delinquency Loss Factor.
"Transferor": [ ], a Delaware corporation.
"Trust Estate": All money, instruments and other property subject or
intended to be subject to the lien of this Indenture for the benefit of the
Noteholders [and the Note Insurer] as of any particular time (including, without
limitation, all property and interests Granted to the Indenture Trustee,
including all proceeds thereof).
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939 as it may
be amended from time to time.
["Trust Insurance Proceeds": As defined in the Master Servicing
Agreement.]
"Trust Paying Agent": The entity appointed to act as paying agent pursuant
to the Owner Trust Agreement with respect to amounts on deposit from time to
time in the Certificate Distribution Account and distributions thereof to
Certificateholders. The initial Trust Paying Agent is the Indenture Trustee.
"Underwriter[s]": [ ]
"US Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Vice President": Any vice president, whether or not designated by a
number or a word or words added before or after the title "vice president".
20
ARTICLE II
THE NOTES
Section 2.01. Form Generally.
---------------
The Class A Notes shall be in substantially the form set forth on Exhibit
-------
A attached hereto. Each Note may have such letters, numbers or other marks of
-
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the Notes
may be listed, or as may, consistently herewith, be determined by the Authorized
Officers of the Owner Trustee executing such Notes on behalf of the Issuer, as
evidenced by their execution thereof. Any portion of the text of any Note may be
set forth on the reverse thereof with an appropriate reference on the face of
the Note .
The Definitive Notes may be produced in any manner determined by the
Authorized Officers of the Owner Trustee executing such Notes, as evidenced by
their execution thereof.
Section 2.02. Form of Certificate of Authentication.
--------------------------------------
The form of the Authenticating Agent's certificate of authentication is as
follows:
This is one of the Notes referred to in the within-mentioned
Indenture.
[Trustee]
as Authenticating Agent
By: _____________________________________
Authorized Signatory
Section 2.03. General Provisions With Respect to Principal and Interest
---------------------------------------------------------
Payments.
---------
The Notes shall be designated generally as the "Asset-Backed Notes, Series
[2001]-[ ]".
The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is limited to $[ ], except for the Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this
Indenture. The Notes shall consist of a single class having an Original Note
Balance, Note Interest Rate and Stated Maturity Date as follows:
Original Note Stated
Designation Note Balance Interest Rate Maturity Date
----------- ------------ ------------- -------------
Class A $
The Notes shall be issued in the form specified in Section 2.01.
Subject to the provisions of Section 3.01, Section 5.07, Section 5.09 and
Section 8.02(d), the principal of each Note shall be payable in installments
ending no later than its Stated
21
Maturity Date unless the unpaid principal of such Notes become due and payable
at an earlier date by declaration of acceleration or call for redemption or
otherwise.
The principal and interest payable on each Note are payable in coin or
currency of the United States of America as at the time of payment in legal
tender for payment of public and private debts. All payments made with respect
to any Note shall be applied first to the interest then due and payable on such
Note and then to the principal thereof. All computations of interest accrued on
the Class A Notes shall be made on the basis of a year of 360 days consisting of
twelve 30-day months. Interest on the Notes shall accrue at the Note Interest
Rate during each Interest Period on the Note Balance of each Outstanding Note as
of the preceding Payment Date (after giving effect to the payment, if any, in
reduction of principal made on the Notes on such preceding Payment Date).
Interest accrued during an Interest Period shall be payable on the next
following Payment Date.
All payments of principal of and interest on any Note shall be made in the
manner specified in Section 2.08. Notwithstanding any of the foregoing
provisions with respect to payments of principal of and interest on the Notes,
if the Notes have become or been declared due and payable following an Event of
Default and such acceleration of maturity and its consequences have not been
rescinded and annulled, then payments of principal of and interest on the Notes
shall be made in accordance with Section 5.07.
Section 2.04. Denominations.
--------------
The Notes shall be issuable only as registered Notes in the minimum
denomination of $[1,000] and integral multiples of $1.00 in excess thereof, with
the exception that one Note may be issued in a lesser amount.
Section 2.05. Execution, Authentication, Delivery and Dating.
-----------------------------------------------
The Notes shall be executed on behalf of the Issuer by an Authorized
Officer of the Owner Trustee. The signature of such Authorized Officer of the
Owner Trustee on the Notes may be manual or by facsimile.
Notes bearing the manual or facsimile signature of an individual who was
at any time an Authorized Officer of the Owner Trustee shall bind the Issuer,
notwithstanding that such individual has ceased to be an Authorized Officer of
the Owner Trustee prior to the authentication and delivery of such Notes or was
not an Authorized Officer of the Owner Trustee at the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Notes executed on behalf of the Issuer to the
Authenticating Agent for authentication; and the Authenticating Agent shall
authenticate and deliver such Notes as in this Indenture provided and not
otherwise.
Each Note authenticated on the Closing Date shall be dated the Closing
Date. All other Notes that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
22
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
Authenticating Agent by the manual signature of one of its authorized officers
or employees, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
Section 2.06. Registration; Registration of Transfer and Exchange.
----------------------------------------------------
The Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee is hereby initially appointed "Note Registrar" for
the purpose of registering Notes and transfers of Notes as herein provided. The
Indenture Trustee shall remain the Note Registrar throughout the term hereof.
Upon any resignation of the Indenture Trustee, the Issuer shall promptly appoint
a successor, [with the approval of the Note Insurer,] or, in the absence of such
appointment, shall assume the duties of Note Registrar.
The Indenture Trustee shall maintain an office or offices or agency or
agencies where Notes may be surrendered for registration of transfer or exchange
and where notices and demands to or upon the Indenture Trustee in respect of the
Notes may be served. The Indenture Trustee initially designates [its Corporate
Trust Office] as its office for such purposes. The Indenture Trustee or its
agent shall give prompt written notice to the Depositor[, the Note Insurer] and
the Noteholders of any change in the location of the Note Register or any such
office or agency.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, the Owner
Trustee on behalf of the Issuer, shall execute, and the Authenticating Agent
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a like
aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of any
authorized denominations, and of a like aggregate initial principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Owner Trustee shall execute, and the
Authenticating Agent shall authenticate and deliver, the Notes that the
Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Note Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer and the Note Registrar may require payment of
a sum sufficient to cover any tax or
23
other governmental charge as may be imposed in connection with any registration
of transfer or exchange of Notes.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes.
-------------------------------------------
If (1) any mutilated Note is surrendered to the Note Registrar or the Note
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (2) there is delivered to the Note Registrar such written
indemnity as may be required by the Note Registrar to save each of the Issuer,
[the Note Insurer] and the Note Registrar harmless (provided that no security
shall be required for any indemnity from any institutional investor whose
long-term debt is rated investment grade by any of the Rating Agencies), then,
in the absence of notice to the Issuer or the Note Registrar that such Note has
been acquired by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the relevant Uniform Commercial Code have been met, the Owner
Trustee shall execute and upon its request the Note Registrar shall authenticate
and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Note, a new Note or Notes of the same tenor and aggregate initial
principal amount bearing a number not contemporaneously outstanding. If, after
the delivery of such new Note, a bona fide purchaser of the original Note in
lieu of which such new Note was issued presents for payment such original Note,
the Issuer and the Note Registrar shall be entitled to recover such new Note
from the person to whom it was delivered or any person taking therefrom, except
a bona fide purchaser, and shall be entitled to recover upon the written
indemnity provided therefor to the extent of any loss, damage, cost or expenses
incurred by the Issuer or the Note Registrar in connection therewith. If any
such mutilated, destroyed, lost or stolen Note shall have become or shall be
about to become due and payable, or shall have become subject to redemption in
full, instead of issuing a new Note, the Issuer may pay such Note without
surrender thereof, except that any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section, the Issuer or the
Note Registrar may require the payment 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 or
the Note Registrar) connected therewith.
Every new Note issued pursuant to this Section in lieu of any destroyed,
lost or stolen Note shall constitute an original additional contractual
obligation of the Issuer, whether or not the 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 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 2.08. Payments of Principal and Interest.
-----------------------------------
(a) Payments on Notes issued as Book-Entry Notes will be made by or on
behalf of the Indenture Trustee to the Clearing Agency or its nominee. Any
installment of interest or principal payable on any Definitive Notes that is
punctually paid or duly provided for by the
24
Issuer on the applicable Payment Date shall be paid to the Person in whose name
such Note (or one or more Predecessor Notes) is registered at the close of
business on the Record Date for such Payment Date by either (i) check mailed to
such Person's address as it appears in the Note Register on such Record Date, or
(ii) by wire transfer of immediately available funds to the account of a
Noteholder, if such Noteholder (A) is the registered holder of Definitive Notes
having an initial principal amount of at least $1,000,000 and (B) has provided
the Indenture Trustee with wiring instructions in writing by five Business Days
prior to the related Record Date or has provided the Indenture Trustee with such
instructions for any previous Payment Date, except for the final installment of
principal payable with respect to such Note (or the Redemption Price for any
Note called for redemption, if such redemption will result in payment of the
then entire unpaid principal amount of such Note ), which shall be payable as
provided in subsection (b) below of this Section 2.08. Any installment of
interest or principal not punctually paid or duly provided for shall be payable
as soon as funds are available to the Indenture Trustee for payment thereof, or
if Section 5.07 applies, pursuant to Section 5.07.
(b) All reductions in the principal amount of a Note (or one or more
Predecessor Notes) effected by payments of installments of principal made on any
Payment Date shall be binding upon all Holders of such Note and of any Note
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Note. The final
installment of principal of each Note (including the Redemption Price of any
Note called for optional redemption, if such optional redemption will result in
payment of the entire unpaid principal amount of such Note) shall be payable
only upon presentation and surrender thereof on or after the Payment Date
therefor at the Indenture Trustee's presenting office located within the United
States of America pursuant to Section 3.02.
(c) Whenever the Indenture Trustee expects that the entire remaining
unpaid principal amount of any Note will become due and payable on the next
Payment Date other than pursuant to a redemption pursuant to Article X, it
shall, no later than two days prior to such Payment Date, telecopy or hand
deliver to each Person in whose name a Note to be so retired is registered at
the close of business on such otherwise applicable Record Date a notice to the
effect that: the Indenture Trustee expects that funds sufficient to pay such
final installment will be available in the Note Account on such Payment Date;
and if such funds are available, (i) such final installment will be payable on
such Payment Date, but only upon presentation and surrender of such Note at the
office or agency of the Note Registrar maintained for such purpose pursuant to
Section 3.02 (the address of which shall be set forth in such notice) and (ii)
no interest shall accrue on such Note after such Payment Date. [A copy of such
form of notice shall be sent to the Note Insurer by the Indenture Trustee.]
Notices in connection with redemptions of Notes shall be mailed to Noteholders
in accordance with Section 10.02.
(d) Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to unpaid principal and
interest that were carried by such other Note. Any checks mailed pursuant to
subsection (a) of this Section 2.08 and returned undelivered shall be held in
accordance with Section 3.03.
(e) Each Payment Date Statement, prepared by the Securities Administrator
based on the Servicer Remittance Report delivered to the Securities
Administrator and the Indenture
25
Trustee pursuant to the Master Servicing Agreement, shall be delivered by the
Securities Administrator to the Indenture Trustee no later than the related
Deposit Date. The Indenture Trustee shall deliver each such Payment Date
Statement to [the Note Insurer,] the Rating Agencies, the Owner Trustee, the
Underwriter[s], and each Noteholder. In addition, on each Payment Date the
Securities Administrator shall forward to Bloomberg L.P. and the Depositor the
electromagnetic tape or disk containing certain Home Loan information required
to be delivered to the Securities Administrator by the Servicer pursuant to
Section 3.01 of the Master Servicing Agreement[; provided, however, that the
Securities Administrator shall not forward any such tape or disk that separately
sets forth the Note Insurer Premium or the Note Insurer Premium Rate.] Neither
the Securities Administrator, the Indenture Trustee nor the Paying Agent shall
have any responsibility to recalculate, verify, reconcile or recompute
information contained in any such tape or disk or any such Master Servicer
Remittance Report, and in preparing each Payment Date Statement, the Securities
Administrator shall be entitled to rely conclusively on the accuracy of the
information or data contained in the applicable Master Servicer Remittance
Report.
(f) Within 90 days after the end of each calendar year, the Securities
Administrator will be required to furnish to each person who at any time during
the calendar year was a Noteholder (which the Securities Administrator shall
promptly prepare upon the request of the Indenture Trustee), a statement
containing the information set forth in subclauses (a) and (b) in the definition
of "Payment Date Statement," aggregated for such calendar year or the applicable
portion thereof during which such person was a Noteholder. Such obligation will
be deemed to have been satisfied to the extent that substantially comparable
information is provided pursuant to any requirements of the Code as are from
time to time in force. The Note Registrar shall furnish to the Securities
Administrator, promptly following its request, with such information concerning
such Noteholder as the Securities Administrator may reasonably require to
perform its obligations hereunder.
Section 2.09. Persons Deemed Owners.
----------------------
Prior to due presentment for registration of transfer of any Note , the
Issuer, the Indenture Trustee, any Paying Agent and any other agent of the
Issuer, [the Note Insurer] or the Indenture Trustee may treat the Person in
whose name any Note is registered as the owner of such Note (a) on the
applicable Record Date for the purpose of receiving payments of the principal of
and interest on such Note and (b) on any other date for all other purposes
whatsoever, and neither the Issuer, the Indenture Trustee, any Paying Agent nor
any other agent of the Issuer[, the Note Insurer ]or the Indenture Trustee shall
be affected by notice to the contrary.
Section 2.10. Cancellation.
-------------
All Notes surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Note Registrar, be
delivered to the Note Registrar and shall be promptly canceled by it. The Issuer
may at any time deliver to the Note Registrar for cancellation any Note
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Note Registrar. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. All
26
canceled Notes held by the Note Registrar shall be held by the Note Registrar in
accordance with its standard retention policy, unless the Issuer shall direct by
an Issuer Order that they be destroyed or returned to it.
Section 2.11. Authentication and Delivery of Notes.
-------------------------------------
On the Closing Date, the Notes shall be executed by an Authorized Officer
of the Owner Trustee and delivered to the Authenticating Agent for
authentication, and thereupon the same shall be authenticated and delivered by
the Authenticating Agent, upon Issuer Request and upon receipt by the
Authenticating Agent of all of the following:
(a) An Issuer Order authorizing the execution, authentication and delivery
of the Notes and specifying the Stated Maturity Date, the principal amount and
the Note Interest Rate of such Notes to be authenticated and delivered.
(b) An Issuer Order authorizing the execution and delivery of this
Indenture.
(c) One or more Opinions of Counsel addressed to the Authenticating Agent
[and the Note Insurer] or upon which the Authenticating Agent [and the Note
Insurer] is expressly permitted to rely, complying with the requirements of
Section 12.01, reasonably satisfactory in form and substance to the
Authenticating Agent[ and the Note Insurer].
In rendering the opinions set forth above, such counsel may rely upon
officer's certificates of the Issuer, the Owner Trustee, the Servicer and the
Indenture Trustee, without independent confirmation or verification with respect
to factual matters relevant to such opinions. In rendering the opinions set
forth above, such counsel need express no opinion as to (A) the existence of, or
the priority of the security interest created by the Indenture against, any
liens or other interests that arise by operation of law and that do not require
any filing or similar action in order to take priority over a perfected security
interest or (B) the priority of the security interest created by this Indenture
with respect to any claim or lien in favor of the United States or any agency or
instrumentality thereof (including federal tax liens and liens arising under
Title IV of the Employee Retirement Income Security Act of 1974).
[The acceptability to the Note Insurer of the Opinion of Counsel delivered
to the Indenture Trustee and the Note Insurer at the Closing Date shall be
conclusively evidenced by the delivery on the Closing Date of the Note Insurance
Policy.]
(d) An Officers' Certificate of the Issuer complying with the
requirements of Section 12.01 and stating that:
(i) the Issuer is not in Default under this Indenture and the
issuance of the Notes will not result in any breach of any of the terms,
conditions or provisions of, or constitute a default under, the Issuer's
Certificate of Trust or any indenture, mortgage, deed of trust or other
agreement or instrument to which the Issuer is a party or by which it is
bound, or any order of any court or administrative agency entered in any
proceeding to which the Issuer is a party or by which it may be bound or
to which it may be subject, and that all conditions precedent provided in
this Indenture relating to the authentication and delivery of the Notes
have been complied with; the Issuer is the owner of each Home
27
Loan, free and clear of any lien, security interest or charge, has not
assigned any interest or participation in any such Home Loan (or, if any
such interest or participation has been assigned, it has been released)
and has the right to Grant each such Home Loan to the Indenture Trustee;
(ii) the information set forth in the Mortgage Asset Schedule
attached as Schedule I to this Indenture is correct;
(iii) the Issuer has Granted to the Indenture Trustee all of its
right, title and interest in each Home Loan; and
(iv) attached thereto is a true and correct copy of letters signed
by each Rating Agency confirming that the Notes have been rated in the
highest rating category of such Rating Agency.
(e) An executed counterpart of the Master Servicing Agreement.
(f) An executed counterpart of the Asset Sale Agreement.
(g) An executed counterpart of the Owner Trust Agreement.
(h) An executed copy of the Custodial Agreement.
Section 2.12. Book-Entry Notes.
-----------------
On the Closing Date, the Notes will be issued in the form of typewritten
global Notes representing the Book-Entry Notes, to be delivered to the Indenture
Trustee as custodian for The Depository Trust Company (the initial Clearing
Agency) by, or on behalf of, the Issuer. The Book-Entry Notes shall be
registered initially on the Note Register in the name of Cede & Co., the nominee
of the initial Clearing Agency; no Beneficial Owner thereof will receive or be
entitled to receive a Definitive Note representing such Beneficial Owner's
beneficial interest in such Note, except as provided in Section 2.13 with
respect to Book-Entry Termination; and registration of the Notes may not be
transferred by the Note Registrar except upon Book-Entry Termination. Until the
occurrence of Book-Entry Termination, the Note Registrar shall deal with the
Clearing Agency as the sole Holder of the Notes for purposes of exercising the
rights of Noteholders hereunder. The Indenture Trustee, the Note Registrar, the
Issuer and all other Persons shall recognize the Clearing Agency as the Holder.
All rights and privileges of any Beneficial Owner shall be realized or exercised
solely through the facilities of the Clearing Corporation and the applicable
rules and regulations of the Clearing Corporation and any other financial
intermediary through which a Beneficial Owner claims its interest in any Note.
Each payment of principal of and interest on a Book-Entry Note shall be paid to
the Clearing Agency. Each Clearing Agency Participant shall be responsible for
disbursing such payments to the Beneficial Owners of the Book-Entry Notes that
it represents and to each indirect participating brokerage firm (a "brokerage
firm" or "indirect participating firm") for which it acts as agent. Each
brokerage firm shall be responsible for disbursing funds to the Beneficial
Owners of the Book-Entry Notes that it represents. All such credits and
disbursements are to be made by the Clearing Agency and the Clearing Agency
Participants in accordance with their respective procedures. None of the
Indenture Trustee, the Note Registrar, the Issuer, or any Paying Agent
28
[or the Note Insurer] shall have any responsibility therefor. Requests and
directions from, and votes of, such representatives shall not be deemed to be
inconsistent if they are made with respect to different Beneficial Owners.
Section 2.13. Termination of Book Entry System.
---------------------------------
(a) The book-entry system through the Clearing Agency with respect to the
Book-Entry Notes may be terminated upon the happening of any of the following:
(i) The Clearing Agency or the Seller advises the Indenture
Trustee that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities as nominee and depositary with respect to
the Notes and the Indenture Trustee or the Seller is unable to locate a
qualified successor clearing agency satisfactory to the Issuer;
(ii) The Seller, in its sole discretion, elects to terminate the
book-entry system by notice to the Clearing Agency and the Indenture
Trustee; or
(iii) After the occurrence of an Event of Default (at which time the
Indenture Trustee shall use all reasonable efforts to promptly notify each
Beneficial Owner through the Clearing Agency of such Event of Default),
the Beneficial Owners of no less than 51% of the Note Balance of the
Book-Entry Notes advise the Indenture Trustee in writing, through the
related Clearing Agency Participants and the Clearing Agency, that the
continuation of a book-entry system through the Clearing Agency to the
exclusion of any Definitive Notes being issued to any person other than
the Clearing Agency or its nominee is no longer in the best interests of
the Beneficial Owners.
(b) Upon the occurrence of any event described in subsection (a) above,
the Indenture Trustee shall use all reasonable efforts to notify all Beneficial
Owners, through the Clearing Agency, of the occurrence of such event and of the
availability of Definitive Notes to Beneficial Owners requesting the same, in a
Note Balance representing the interest of each, making such adjustments and
allowances as it may find necessary or appropriate as to accrued interest and
previous calls for redemption. Definitive Notes shall be issued only upon
surrender to the Indenture Trustee of the global Note by the Clearing Agency,
accompanied by registration instructions for the Definitive Notes. Neither the
Issuer nor the Indenture Trustee shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon issuance of the Definitive Notes, all
references herein to obligations imposed upon or to be performed by the Clearing
Agency shall cease to be applicable and the provisions relating to Definitive
Notes shall be applicable.
ARTICLE III
COVENANTS
Section 3.01. Payment of Notes.
-----------------
The Issuer will pay or cause to be duly and punctually paid the principal
of, and interest on, the Notes in accordance with the terms of the Notes and
this Indenture. The Notes shall be non-recourse obligations of the Issuer and
shall be limited in right of payment to amounts
29
available from the Trust Estate as provided in this Indenture and the Issuer
shall not otherwise be liable for payments on the Notes. No person shall be
personally liable for any amounts payable under any Notes. If any other
provision of this Indenture conflicts or is deemed to conflict with the
provisions of this Section 3.01, the provisions of this Section 3.01 shall
control.
Section 3.02. Maintenance of Office or Agency.
--------------------------------
The Issuer will cause the Note Registrar to maintain its corporate trust
office at a location where 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 may also from time to time at its own expense designate one or
more other offices or agencies within the United States of America where the
Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided, however, any designation of an
office or agency for payment of Notes shall be subject to Section 3.03. The
Issuer will give prompt written notice to the Indenture Trustee [and the Note
Insurer] of any such designation or rescission and of any change in the location
of any such other office or agency.
Section 3.03. Money for Note Payments to Be Held In Trust.
--------------------------------------------
All payments of amounts due and payable with respect to any Notes that are
to be made from amounts withdrawn from the Note Account pursuant to Section
8.02(c) or Section 5.07 shall be made on behalf of the Issuer by the Paying
Agent, and no amounts so withdrawn from the Note Account for payments of Notes
shall be paid over to the Issuer under any circumstances except as provided in
this Section 3.03 or in Section 5.07 or Section 8.02. With respect to Definitive
Notes, if the Issuer shall have a Paying Agent that is not also the Note
Registrar, such Note Registrar shall furnish, no later than the fifth calendar
day after each Record Date, a list, in such form as such Paying Agent may
reasonably require, of the names and addresses of the Holders of Notes and of
the number of Individual Notes held by each such Holder.
Whenever the Issuer shall have a Paying Agent other than the Indenture
Trustee, it will, on or before the Business Day next preceding each Payment Date
direct the Indenture Trustee to deposit with such Paying Agent an aggregate sum
sufficient to pay the amounts then becoming due (to the extent funds are then
available for such purpose in the Note Account), such sum to be held in trust
for the benefit of the Persons entitled thereto. Any moneys deposited with a
Paying Agent in excess of an amount sufficient to pay the amounts then becoming
due on the Notes with respect to which such deposit was made shall, upon Issuer
Order, be paid over by such Paying Agent to the Indenture Trustee for
application in accordance with Article VIII.
Subject to the prior consent of [the Note Insurer,] any Paying Agent other
than the Indenture Trustee shall be appointed by Issuer Order and at the expense
of the Issuer. The Issuer shall not appoint any Paying Agent (other than the
Indenture Trustee) that is not, at the time of such appointment, a depository
institution or trust company whose obligations would be Permitted Investments
pursuant to clause (c) of the definition of the term Permitted Investments. 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
30
Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so
agrees), subject to the provisions of this Section, that such Paying Agent will:
(a) allocate all sums received for payment to the Holders of Notes on each
Payment Date among such Holders in the proportion specified in the applicable
Payment Date Statement, in each case to the extent permitted by applicable law;
(b) 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;
(c) if such Paying Agent is not the Indenture Trustee, immediately resign
as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it
in trust for the payment of the Notes if at any time the Paying Agent ceases to
meet the standards set forth above required to be met by a Paying Agent at the
time of its appointment;
(d) if such Paying Agent is not the Indenture Trustee, give the Indenture
Trustee notice of any Default by the Issuer (or any other obligor upon the
Notes) in the making of any payment required to be made with respect to any
Notes for which it is acting as Paying Agent;
(e) if such Paying Agent is not the Indenture Trustee, 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; and
(f) comply with all requirements of the Code, and all regulations
thereunder, with respect to 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; provided,
however, that with respect to withholding and reporting requirements applicable
to original issue discount (if any) on any of the Notes, the Issuer has provided
the calculations pertaining thereto to the Indenture Trustee and the Paying
Agent.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or any other purpose, by Issuer Order direct any
Paying Agent, if other than the Indenture Trustee, 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 such 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.
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 two and one-half years after such amount has become due and payable to the
Holder of such Note (or if earlier, three months before the date on which such
amount would escheat to a governmental entity under applicable law) shall be
discharged from such trust and paid to the Issuer; 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.
31
The Indenture Trustee may adopt and employ, at the expense of the Issuer,
any 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 moneys due and payable but not claimed is determinable from the
records of the Indenture Trustee or any Agent, at the last address of record for
each such Holder).
Section 3.04. Existence of Issuer.
--------------------
The Issuer will keep in full effect its existence, rights and franchises
as a business trust under the laws of the State of Delaware or under the laws of
any other state or the United States of America, 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 Master Servicing Agreement, the
Custodial Agreement[, the Insurance Agreement ]and the Owner Trust Agreement.
Section 3.05. Protection 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 as may be necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien of this Indenture or carry out
more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforcing the provisions of any of the Home Loans, the
Master Servicing Agreement, the Asset Sale Agreement, the Custodial
Agreement, the Insurance Agreement or the Owner Trust Agreement; or
(v) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee, and of the Noteholders [and the Note Insurer,]
in the Home Loans and the other property held as part of the Trust Estate
against the claims of all Persons and parties.
(b) 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 this Section 3.05 (or cause or
permit ownership or the pledge of any portion of the Trust Estate that consists
of book-entry securities to be recorded on the books of a Person located in a
different jurisdiction from the jurisdiction in which it was held, or to which
it is intended to be removed, as described in the Opinion of Counsel delivered
at the Closing Date pursuant to Section 2.11(c), if no Opinion of Counsel has
yet been delivered pursuant to this Section 3.05) or cause or permit ownership
or the pledge of any portion of the Trust Estate that consists of book-
32
entry securities to be recorded on the books of a Person located in a different
jurisdiction from the jurisdiction in which such ownership or pledge was
recorded at such time unless the Indenture Trustee shall have first received an
Opinion of Counsel addressed to the Indenture Trustee [and the Note Insurer] 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.
Section 3.06. Opinions as to Trust Estate.
----------------------------
On or before April 30th in each calendar year, beginning with the first
calendar year commencing after the Closing Date, the Issuer shall furnish to the
Indenture Trustee [and the Note Insurer] an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee [and the Note
Insurer] either stating that, in the opinion of such counsel, such action has
been taken as is necessary to maintain the lien and security interest created by
this Indenture 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 all such action,
if any, that will, in the opinion of such counsel, be required to be taken to
maintain the lien and security interest of this Indenture with respect to the
Trust Estate until May 1st in the following calendar year.
Section 3.07. Performance of Obligations; Servicing Agreement.
------------------------------------------------
(a) The Issuer shall punctually perform and observe all of its obligations
under this Indenture and the Servicing Agreement.
(b) The Issuer shall not take any action and will use its Best Efforts not
to permit any action to be taken by others that would release any Person from
any of such Person's covenants or obligations under any of the Home Loan Files
or under any instrument included in the Trust Estate, or that would result in
the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents or instruments
contained in the Home Loan Files, except as expressly permitted in this
Indenture, the Servicing Agreement or such document included in the Home Loan
File or other instrument or unless such action will not adversely affect the
interests of the Holders of the Notes.
(c) If the Issuer shall have knowledge of the occurrence of a default
under the Master Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee, [the Note Insurer] and the Rating Agencies thereof, and shall
specify in such notice the action, if any, the Issuer is taking with respect to
such default.
(d) Upon any termination of the Master Servicer's rights and powers
pursuant to the Master Servicing Agreement, the Indenture Trustee shall promptly
notify the Rating Agencies and each Noteholder. As soon as any successor Master
Servicer is appointed, the Indenture Trustee shall notify the Rating Agencies
and each Noteholder, specifying in such notice the name and address of such
successor Master Servicer.
33
Section 3.08. Investment Company Act.
-----------------------
The Issuer shall at all times conduct its operations so as not to be
subject to, or shall comply with, the requirements of the Investment Company Act
of 1940, as amended (or any successor statute), and the rules and regulations
thereunder.
Section 3.09. Negative Covenants.
-------------------
The Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any portion of the
Trust Estate except as expressly permitted by this Indenture or the Master
Servicing Agreement;
(b) claim any credit on, or make any deduction from, the principal of, or
interest on, any of the Notes by reason of the payment of any taxes levied or
assessed upon any portion of the Trust Estate;
(c) engage in any business or activity other than as permitted by the
Owner Trust Agreement or other than in connection with, or relating to, the
issuance of the Notes pursuant to this Indenture or amend the Owner Trust
Agreement, as in effect on the Closing Date, other than in accordance with
Section 9.06;
(d) incur, issue, assume or otherwise become liable for any indebtedness
other than the Notes;
(e) incur, assume, guaranty or agree to indemnify any Person with respect
to any indebtedness of any Person, except for such indebtedness as may be
incurred by the Issuer in connection with the issuance of the Notes pursuant to
this Indenture;
(f) dissolve or liquidate in whole or in part (until the Notes are paid in
full); or
(g) (A) permit the validity or effectiveness of this Indenture or any
Grant to be impaired, or permit the lien of this Indenture to be impaired,
amended, hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations under this Indenture,
except as may be expressly permitted hereby, (B) permit any lien, charge,
security interest, mortgage or other encumbrance (other than the lien of this
Indenture or any encumbrance permitted hereunder) 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 (C) permit the lien of this
Indenture not to constitute a valid perfected first priority security interest
in the Trust Estate; or take any other action that should reasonably be expected
to, or fail to take any action if such failure should reasonably be expected to,
cause the Issuer to be taxable as an association pursuant to Section 7701 of the
Code or a taxable mortgage pool pursuant to Section 7701(i) of the Code.
34
Section 3.10. Annual Statement as to Compliance.
----------------------------------
On or before July 31, 200[ ], and each July 31st thereafter, the Issuer
shall deliver to the Indenture Trustee [and the Note Insurer] a written
statement, signed by an Authorized Officer of the Owner Trustee, stating that:
(a) a review of the fulfillment by the Issuer during such year of its
obligations under this Indenture has been made under such Authorized Officer's
supervision; and
(b) 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 throughout such year, or, if there has been a Default in the
fulfillment of any such covenant or condition, specifying each such Default
known to such Authorized Officer and the nature and status thereof.
Promptly following its receipt of such statement, the Indenture Trustee
shall forward a copy thereof to each Noteholder.
Section 3.11. 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 or to the Master
Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such
ownership or equity interest or 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, distributions to the Servicer, the Indenture
Trustee, the Master Servicer, the Owner Trustee[, the Note Insurer] and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under, the Master Servicing Agreement or the Owner Trust Agreement
and the Issuer will not, directly or indirectly, make or cause to be made
payments to or distributions from the Note Account except in accordance with
this Indenture.
Section 3.12. Treatment of Notes as Debt for Tax Purposes.
--------------------------------------------
The Issuer shall treat the Notes as indebtedness for all federal and state
tax purposes.
Section 3.13. Notice of Events of Default.
----------------------------
The Issuer shall give the Indenture Trustee[, the Note Insurer] and the
Rating Agencies prompt written notice of each Event of Default hereunder, each
default on the part of the Master Servicer of its obligations under the Master
Servicing Agreement and each default on the part of the Seller of its
obligations under the Asset Sale Agreement.
Section 3.14. Further Instruments and Acts.
-----------------------------
Upon request of the Indenture Trustee[ or the Note Insurer], 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.
35
Section 3.15. Covenants of the Indenture Trustee.
-----------------------------------
(a) The Indenture Trustee shall perform, on behalf of the Trust acting
through the Owner Trustee, the duties of the Issuer hereunder specified below,
and shall consult with the Owner Trustee regarding such duties:
(i) the determination of the form of the Notes under Section
2.01;
(ii) directing the Owner Trustee to execute the Notes for the
Issuer and to return them to the Indenture Trustee for authentication and
delivery under Section 2.05;
(iii) direction of the Owner Trustee to execute and deliver Notes
for registration of transfer and exchange under Section 2.06;
(iv) direction of the Owner Trustee as to actions to be taken with
respect to Notes alleged to have been lost, stolen, destroyed or mutilated
under Section 2.07;
(v) maintenance of Note Registrar's Office and designation of any
offices where Notes may be presented or surrendered under Section 3.02;
(vi) if an additional Paying Agent is to be appointed, the
solicitation and review of bids, examination of the qualifications of
bidders, and submission to the Owner Trustee of a list of candidates from
which such appointment may be made by the Owner Trustee; preparation and
submission to each such Paying Agent for execution of an agreement to the
effect that such Paying Agent holds funds in trust; the direction of a
Paying Agent to remit all funds it is holding to the Indenture Trustee;
the direction of the Indenture Trustee to deposit moneys with such Paying
Agent; and notifications to Holders of Notes of availability of their last
payments, all under Section 3.03;
(vii) direction of Owner Trustee in connection with anything
required of the Issuer relating to the appointment of any co-Trustee under
Section 6.13;
(viii) if an Authenticating Agent is to be appointed, the
solicitation and review of bids, examination of the qualifications of
bidders, and submission to the Owner Trustee of a list of qualified
candidates from which such appointment may be made by the Owner Trustee
under Section 6.14;
(ix) furnishing to the Indenture Trustee the names and addresses
of Noteholders to the extent required by Section 7.01;
(x) direction of the Owner Trustee's execution of documents, if
any, as provided by the Servicer as necessary to reconvey title to
repurchased Home Loans to the Seller under Section 8.05; and
(xi) notifying the Owner Trustee when the Securities Administrator
is of the opinion that a supplemental indenture may be necessary or
appropriate and determining, based on advice of counsel, whether notations
of amendments should be made on Note Certificates, under Sections 9.01,
9.02, and 9.07.
36
(b) The Indenture Trustee hereby agrees that it will not take any action
that is not related to the administration of the Trust Estate to (i) impair the
validity or effectiveness of the Indenture or the Grant of the Trust Estate
thereunder or release any Person from any covenant or obligation under this
Indenture, except as expressly permitted thereby, (ii) creating any lien,
charge, security interest, or similar encumbrance (other than the lien of this
Indenture or other permitted encumbrance or as otherwise permitted under the
provisions of this Indenture) on the Trust Estate, or (iii) cause the lien of
the Indenture not to constitute a valid perfected first priority security
interest in the Trust Estate, except as otherwise expressly permitted hereunder.
The Indenture Trustee shall not take any action that, to the actual knowledge of
the Indenture Trustee, would result in the Issuer becoming taxable as a
corporation for federal income tax purposes.
(c) The Indenture Trustee shall pay, from its own funds, the annual fee
of the Owner Trustee as described in Section 8.1 of the Owner Trust Agreement.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
----------------------------------------
Whenever the following conditions shall have been satisfied:
(a) either
(i) all 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 2.07, and (ii) Notes for whose
payment money has theretofore been deposited in trust and thereafter
repaid to the Issuer, as provided in Section 3.03) have been delivered to
the Note Registrar for cancellation; or
(ii) all Notes not theretofore delivered to the Note Registrar for
cancellation
(A) have become due and payable, or
(B) will become due and payable at the Stated Maturity Date
within one year, or
(C) are to be called for redemption within one year under
irrevocable arrangements satisfactory to the Indenture Trustee for
the giving of notice of redemption by the Indenture Trustee in the
name, and at the expense, of the Issuer or the Master Servicer, and
the Issuer or the Master Servicer, in the case of clauses (B)(i),
(B)(ii) or (B)(iii) above, has irrevocably deposited or caused to be
deposited with the Indenture Trustee, in trust for such purpose, an
amount sufficient to pay and discharge the entire indebtedness on
such Notes not theretofore delivered to the Indenture Trustee for
cancellation, for principal and interest to the Stated Maturity Date
or to the applicable Redemption Date, as the case may be, and in the
case of Notes that were not paid at the Stated Maturity
37
Date of their entire unpaid principal amount, for all overdue
principal and all interest payable on such Notes to the next
succeeding Payment Date therefor;
(b) the Issuer has paid or caused to be paid all other sums payable
hereunder by the Issuer [(including, without limitation, any amounts due the
Note Insurer hereunder)]; and
(c) the Issuer has delivered to the Indenture Trustee [and the Note
Insurer] an Officers' Certificate and an Opinion of Counsel satisfactory in form
and substance to the Indenture Trustee [and the Note Insurer] each stating that
all conditions precedent herein providing for the satisfaction and discharge of
this Indenture have been complied with;
then, upon Issuer Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Issuer (or of the Master Servicer
in the case of a redemption by the Master Servicer), execute and deliver all
such instruments furnished to the Indenture Trustee as may be necessary to
acknowledge the satisfaction and discharge of this Indenture and shall pay, or
assign or transfer and deliver, to the Issuer or upon Issuer Order all cash,
securities and other property held by it as part of the Trust Estate remaining
after satisfaction of the conditions set forth in clauses (1) and (2) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Indenture Trustee and the Paying Agent to the Issuer and the
Holders of Notes under Section 3.03, the obligations of the Indenture Trustee to
the Holders of Notes under Section 4.02 and the provisions of Section 2.07 with
respect to lost, stolen, destroyed or mutilated Notes, registration of transfers
of Notes and rights to receive payments of principal of and interest on the
Notes shall survive.
Section 4.02. Application of Trust Money.
---------------------------
All money deposited with the Indenture Trustee pursuant to Sections 3.03
and 4.01 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, as the Indenture Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money has
been deposited with the Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default.
-----------------
"Event of Default", wherever used herein, means, with respect to Notes
issued hereunder, any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
38
(1) if the Issuer, after payment of any Insured Payment in respect of such
Payment Date, shall default in the payment on any Payment Date of any
Deficiency Amount or fail to pay the Notes in full on or before its Stated
Maturity Date (and in the case of any such default, such default or
failure shall continue for a period of 5 days unremedied);
(2) if the Issuer shall breach or default in the due observance of any one or
more of the covenants set forth in clauses (a) through (g) of Section
3.09;
(3) if the Issuer shall breach, or default in the due observance or
performance of, any other of its covenants in this Indenture, and such
Default shall continue for a period of 30 days after the earlier of (i)
the date on which the Issuer obtains knowledge thereof or (ii) the date on
which there shall have been given to the Issuer by the Indenture Trustee[
at the direction of the Note Insurer], or to the Issuer and the Indenture
Trustee by the Holders of Notes representing at least 25% of the Note
Balance of the Outstanding Notes[, with the prior written consent of the
Note Insurer,] a written notice specifying such Default and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder;
(4) if any representation or warranty of the Issuer made in this Indenture or
any certificate or other writing delivered by the Issuer pursuant hereto
or in connection herewith shall prove to be incorrect in any material
respect as of the time when the same shall have been made and, within 30
days after the earlier of (i) the date on which the Issuer obtains
knowledge thereof or (ii) the date on which there shall have been given
written notice thereof to the Issuer by the Indenture Trustee [at the
direction of the Note Insurer], or to the Issuer and the Indenture Trustee
by the Holders of Notes representing at least 25% of the Note Balance of
the Outstanding Notes[, with the prior written consent of the Note
Insurer], the circumstance or condition in respect of which such
representation or warranty was incorrect shall not have been eliminated or
otherwise cured; provided, however, that in the event that there exists a
remedy with respect to any such breach that consists of a purchase
obligation or repurchase obligation under the Basic Documents, then such
purchase obligation or repurchase obligation shall be the sole remedy with
respect to such breach and shall not constitute an Event of Default
hereunder;
(5) the entry of a decree or order for relief by a court having jurisdiction
in respect of the Issuer in an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present or
future federal or state bankruptcy, insolvency or similar law, or
appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or of any substantial
part of its property, or ordering the winding up or liquidation of the
affairs of the Issuer and the continuance of any such decree or order
unstayed and in effect for a period of 60 consecutive days; or
(6) the commencement by the Issuer of a voluntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present or
future federal or state bankruptcy, insolvency or similar law, or the
consent by the Issuer to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or of any substantial part of its property
or the making by the Issuer of an assignment for the benefit of creditors
or the failure by the Issuer generally to
39
pay its debts as such debts become due or the taking of corporate action
by the Issuer in furtherance of any of the foregoing.
[The payment by the Note Insurer of any Insured Payment in an amount
sufficient to cover the related Deficiency Amount pursuant to the Note Insurance
Policy in respect of any Payment Date shall not constitute an Event of Default
with respect to the Notes.]
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
---------------------------------------------------
If an Event of Default occurs and is continuing, then and in every such
case[, but with the consent of the Note Insurer in the absence of a Note Insurer
Default,] the Indenture Trustee may, and on request of the Holders of Notes
representing not less than 50% of the Note Balance of the Outstanding Notes,
shall, declare all 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 such Notes, in an amount equal to the Note Balance
of such Notes, together with accrued and unpaid interest thereon to the date of
such acceleration, shall become immediately due and payable[, all subject to the
prior written consent of the Note Insurer in the absence of a Note Insurer
Default].
At any time after such a declaration of acceleration of maturity of the
Notes 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
provided [the Note Insurer or] the Holders of Notes representing more than 50%
of the Note Balance of the Outstanding Notes, [with the prior written consent of
the Note Insurer,] by written notice to the Issuer and the Indenture Trustee,
may rescind and annul such declaration and its consequences if:
(a) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(i) all payments of principal of, and interest on, all Notes and
all other amounts that would then be due hereunder or upon such Notes if
the Event of Default giving rise to such acceleration had not occurred;
and
(ii) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee, its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the principal of
Notes that have become due solely by such acceleration, have been cured or
waived as provided in Section 5.14. No such rescission shall affect any
subsequent Default or impair any right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
-------------------------------------------------------
Indenture Trustee.
-----------------
Subject to the provisions of Section 3.01 and the following sentence, if
an Event of Default occurs and is continuing, the Indenture Trustee may[, with
the prior written consent of the Note Insurer,] proceed to protect and enforce
its rights and the rights of the Noteholders [and
40
the Note Insurer] by any Proceedings the Indenture Trustee deems appropriate 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 enforce any other proper remedy. Any proceedings brought by
the Indenture Trustee on behalf of the Noteholders [and the Note Insurer] or any
Noteholder [or the Note Insurer] against the Issuer shall be limited to the
preservation, enforcement and foreclosure of the liens, assignments, rights and
security interests under the Indenture and no attachment, execution or other
unit or process shall be sought, issued or levied upon any assets, properties or
funds of the Issuer, other than the Trust Estate relative to the Notes in
respect of which such Event of Default has occurred. If there is a foreclosure
of any such liens, assignments, rights and security interests under this
Indenture, by private power of sale or otherwise, no judgment for any deficiency
upon the indebtedness represented by the Notes may be sought or obtained by the
Indenture Trustee or any Noteholder against the Issuer. The Indenture Trustee
shall be entitled to recover the costs and expenses expended by it pursuant to
this Article V including reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel.
Section 5.04. Remedies.
---------
If an Event of Default shall have occurred and be continuing and the Notes
have been declared due and payable and such declaration and its consequences
have not been rescinded and annulled, the Indenture Trustee, [at the direction
of the Note Insurer] (subject to Section 5.17, to the extent applicable) may,
for the benefit of the Noteholders [and the Note Insurer], do one or more of the
following:
(a) institute Proceedings for the collection of all amounts then payable
on the Notes, or under this Indenture, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Issuer moneys adjudged due,
subject in all cases to the provisions of Sections 3.01 and 5.03;
(b) in accordance with Section 5.17, 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;
(c) institute Proceedings from time to time for the complete or partial
foreclosure of this Indenture with respect to the Trust Estate;
(d) exercise any remedies of a secured party under the Uniform Commercial
Code and take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee or the Holders of the Notes [and the Note
Insurer hereunder]; and
(e) refrain from selling the Trust Estate and apply all Remittable Funds
pursuant to Section 5.07.
Section 5.05. Indenture Trustee May File Proofs of Claim.
-------------------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or other judicial
Proceeding relative to the Issuer or any other obligor upon any of the Notes or
the property of the Issuer or of such other obligor or
41
their creditors, the Indenture Trustee (irrespective of whether the 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 on the
Issuer for the payment of any overdue principal or interest) shall[, with the
prior written consent of the Note Insurer,] be entitled and empowered, by
intervention in such Proceeding or otherwise to:
(a) file and prove a claim for the whole amount of principal and interest
owing and unpaid in respect of the Notes and 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 the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee, its agents and counsel) and
of the Noteholders [and the Note Insurer] allowed in such Proceeding, and (ii)
collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same; and any receiver, assignee, trustee,
liquidator, or sequestrator (or other similar official) in any such Proceeding
is hereby authorized by each Noteholder [and the Note Insurer] to make such
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of such payments directly to the Noteholders [and
the Note Insurer], to pay to the Indenture Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel.
Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder [or the Note Insurer] any plan of reorganization, arrangement,
adjustment or composition affecting any of the Notes or the rights of any Holder
thereof[, or the Note Insurer,] or to authorize the Indenture Trustee to vote in
respect of the claim of any Noteholder [or the Note Insurer] in any such
Proceeding. [Any plan of reorganization, arrangement, adjustment or composition
relative to the Issuer or any other obligor upon any of the Notes or the
property of the Issuer or of such obligor or their creditors and affecting the
Notes or the rights of the Note Insurer under this Indenture or the Insurance
Agreement must be acceptable to the Note Insurer and, as long as no Note Insurer
Default exists and is continuing, the Note Insurer shall be entitled to exercise
the voting rights of the Holders of the Notes regarding such plan,
reorganization, arrangement, adjustment or composition.]
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of
----------------------------------------------------------
Notes.
-----
All rights of action and claims under this Indenture or any of the Notes
may be prosecuted and enforced by the Indenture Trustee without the possession
of any of the Notes or the production thereof in any Proceeding relating
thereto, and any such Proceeding instituted by the Indenture Trustee, [at the
direction of the Note Insurer], shall be brought in its own name as trustee of
an express trust, and any recovery of judgment shall be for the ratable benefit
of the Holders of the Notes [and the Note Insurer] in respect of which such
judgment has been recovered after payment of amounts required to be paid
pursuant to clause first of Section 5.07.
Section 5.07. Application of Money Collected.
-------------------------------
If the Notes have been declared due and payable following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, any money collected by the Indenture Trustee with respect to such
Notes pursuant to this Article or otherwise and any
42
other monies that may then be held or thereafter received by the Indenture
Trustee as security for such Notes shall be applied in the following order, at
the date or dates fixed by the Indenture Trustee and, in case of the payment of
the entire amount due on account of principal of, and interest on, such Notes,
upon presentation and surrender thereof:
first, to the Indenture Trustee, any unpaid Indenture Trustee's Fees then
-----
due and any other amounts payable and due to the Indenture Trustee under
this Indenture, including any costs or expenses incurred by it in
connection with the enforcement of the remedies provided for in this
Article V, but only to the extent such costs and expenses have not
previously been reimbursed to the Indenture Trustee for such costs and
expenses pursuant to Section 6.15 hereof;
second, to the Servicer, any amounts required to pay the Servicer for any
------
unpaid Servicing Fees then due and, upon the final liquidation of the
related Home Loan (as determined by the Servicer pursuant to the
provisions of the related Servicing Agreement) or the final liquidation of
the Trust Estate, to reimburse the Servicer for unreimbursed Servicing
Advances, and to the Master Servicer, any unpaid Master Servicing Fees
then due;
third, to the payment of Note Interest then due and unpaid upon the
-----
Outstanding Notes through the day preceding the date on which such payment
is made, ratably, without preference or priority of any kind;
fourth, to the payment of the Note Balance of the Outstanding Notes, up to
------
the amount of their respective Note Balances, ratably, without preference
or priority of any kind;
[fifth, to the payment to the Note Insurer, as subrogee to the rights of
------
the Noteholders, (A) the aggregate amount necessary to reimburse the Note
Insurer for any unreimbursed Insured Payments paid by the Note Insurer on
prior Payment Dates, together with interest thereon at the "Late Payment
Rate" specified in the Insurance Agreement from the date such Insured
Payments were paid by the Note Insurer to such Payment Date, (B) the
amount of any unpaid Note Insurer Premium then due, together with interest
thereon at the "Late Payment Rate" specified in the Insurance Agreement
from the date such amounts were due and (C) any other amounts due and
owing to the Note Insurer under the Insurance Agreement;] and
sixth, to the payment of the remainder, if any, to the Issuer or its
-----
designee.
Section 5.08. Limitation on Suits.
--------------------
No Holder of a Note shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee [and the Note Insurer] of a continuing Event of Default;
43
(b) the Holders of Notes representing not less than 25% of the Note
Balance of the Outstanding Notes shall have made written request to the
Indenture Trustee to institute Proceedings in respect of such Event of Default
in its own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee indemnity
in full against the costs, expenses and liabilities to be incurred in compliance
with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such Proceeding;
(e) no direction inconsistent with such written request has been given to
the Indenture Trustee during such 60-day period by the Holders of Notes
representing more than 50% of the Note Balance of the Outstanding Notes; and
(f) the consent of [the Note Insurer] shall have been obtained; it being
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 and for the equal and ratable benefit of all the Holders of
Notes.
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 50% of the Note Balance of the Outstanding Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken notwithstanding any other provision herein to the contrary.
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and
------------------------------------------------------------
Interest.
--------
Subject to the provisions in this Indenture (including Sections 3.01 and
5.03) limiting the right to recover amounts due on a Note to recovery from
amounts in the Trust Estate, the Holder of any Note shall have the right, to the
extent permitted by applicable law, which right is absolute and unconditional,
to receive payment of each installment of interest on such Note on the
respective Payment Date for such installments of interest, to receive payment of
each installment of principal of such Note when due (or, in the case of any Note
called for redemption, on the date fixed for such redemption) 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 5.10. Restoration of Rights and Remedies.
-----------------------------------
If the Indenture Trustee, [the Note Insurer] 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, [the Note Insurer] or to
such Noteholder, then and in every such case the Issuer, the Indenture Trustee,
[the Note Insurer] and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee, [the Note Insurer] and the Noteholders shall continue as though no such
Proceeding had been instituted.
44
Section 5.11. Rights and Remedies Cumulative.
-------------------------------
No right or remedy herein conferred upon or reserved to the Indenture
Trustee, [the Note Insurer] 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 5.12. Delay or Omission Not Waiver.
-----------------------------
No delay or omission of the Indenture Trustee, [the Note Insurer] or of
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 or by law to the Indenture Trustee, [the Note Insurer] or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, [the Note Insurer] or by the Noteholders
[with the prior consent of the Note Insurer, as the case may be.]
Section 5.13. Control by Noteholders.
-----------------------
The Holders of Notes representing more than 50% of the Note Balance of the
Outstanding Notes on the applicable Record Date shall, [with the consent of the
Note Insurer,] have the right to direct the time, method and place of conducting
any Proceeding for any remedy available to the Indenture Trustee or exercising
any trust or power conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture;
(b) any direction to the Indenture Trustee to undertake a Sale of the
Trust Estate shall be by the Holders of Notes representing the percentage of the
Note Balance of the Outstanding Notes specified in Section 5.17(b) (i), unless
Section 5.17(b) (ii) is applicable; and
(c) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction; provided,
however, that, subject to Section 6.01, the Indenture Trustee need not take any
action that it determines might involve it in liability or be unjustly
prejudicial to the Noteholders not consenting.
Section 5.14. Waiver of Past Defaults.
------------------------
The Holders of Notes representing more than 50% of the Note Balance of the
Outstanding Notes on the applicable Record Date may on behalf of the Holders of
all the Notes, [and with the consent of the Note Insurer,] waive any past
Default hereunder and its consequences, except a Default:
(a) in the payment of principal or any installment of interest on any
Note; or
45
(b) in respect of a covenant or provision hereof that under Section 9.02
cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 5.15. Undertaking for Costs.
----------------------
All parties to this Indenture agree, and each Holder of any Note by his
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 shall not apply to any suit instituted by the
Indenture Trustee, to any suit instituted by [the Note Insurer,] any Noteholder,
or group of Noteholders [with the prior consent of the Note Insurer], holding in
the aggregate Notes representing more than 10% of the Note Balance of the
Outstanding Notes, or to any suit instituted by any Noteholder for the
enforcement of the payment of any Deficiency Amount on any Note on or after the
related Payment Date or for the enforcement of the payment of principal of any
Note on or after the Stated Maturity Date (or, in the case of any Note called
for redemption, on or after the applicable Redemption Date).
Section 5.16. 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 of law wherever enacted,
now or at any time hereafter in force, that may affect the covenants in, 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 will 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 5.17. Sale of Trust Estate.
---------------------
(a) The power to effect any sale (a "Sale") of any portion of the Trust
Estate pursuant to Section 5.04 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 with respect thereto 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.
(b) To the extent permitted by law, the Indenture Trustee shall not in any
private Sale sell or otherwise dispose of the Trust Estate, or any portion
thereof, unless:
46
(i) the Holders of Notes representing not less than 50% of the Note
Balance of the Notes then Outstanding consent to or direct the Indenture
Trustee to make such Sale; or
(ii) the proceeds of such Sale would be not less than the entire
amount that would be payable to the Holders of the Notes, in full payment
thereof in accordance with Section 5.07, on the Payment Date next
succeeding the date of 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 disposition thereof for
purposes of this Section 5.17(b). [In the absence of a Note Insurer Default, no
sale hereunder shall be effective without the consent of the Note Insurer.]
(c) Unless the Holders of all Outstanding Notes 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 (ii) of subsection (b) of this Section 5.17 has not been
established by the Indenture Trustee and no Person bids an amount equal to or
greater than such amount, the Indenture Trustee, acting in its capacity as
Indenture Trustee on behalf of the Noteholders [and the Note Insurer], shall
prevent such sale and bid an amount (which shall include the Indenture Trustee's
right, in its capacity as Indenture Trustee, to credit bid) at least $1.00 more
than the highest other bid in order to preserve the Trust Estate on behalf of
the Noteholders[ and the Note Insurer].
(d) In connection with a Sale of all or any portion of the Trust Estate:
(i) 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 Outstanding Notes or claims for interest thereon in lieu of cash up to
the amount that 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;
(ii) the Indenture Trustee may bid for and acquire the property
offered for Sale in connection with any public Sale thereof, 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 that
would be payable to the Holders of the Notes as a result of such Sale in
accordance with Section 5.07 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;
47
(iii) 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;
(iv) 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
(v) 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 moneys.
Section 5.18. Action on Notes.
----------------
The Indenture Trustee's right to seek and recover judgment 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, [the Note
Insurer] or the Holders of Notes 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.
Section 5.19. Application of Section 316(a) of the Trust Indenture Act.
---------------------------------------------------------
Pursuant to Section 316(a) of the TIA, all provisions automatically
provided for in Section 316(a) are hereby expressly excluded.
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 such of 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
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) The Indenture Trustee need perform only those duties that are
specifically set forth in this Indenture and no others 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 request and 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. The Indenture Trustee shall, however,
48
examine such certificates and opinions to determine whether they conform
on their face 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 subsection (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 5.13 or 5.17 or exercising
any trust or power conferred upon the Indenture Trustee under this
Indenture.
(d) For all purposes under this Indenture, the Indenture Trustee shall
not be deemed to have notice or knowledge of any Event of Default described in
Section 5.01(2), 5.01(5) or 5.01(6) or any Default described in Section 5.01(3)
or 5.01(4) or of any event described in Section 3.05 unless a Responsible
Officer assigned to and working in the Indenture Trustee's corporate trust
department has actual knowledge thereof or unless written notice of any event
that is in fact such an Event of Default or Default is received by the Indenture
Trustee at the Corporate Trust Office, and such notice references the Notes
generally, the Issuer, the Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur any 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 for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it under the Master Servicing Agreement or otherwise.
(f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to the provisions of this Section.
(g) Notwithstanding any extinguishment of all right, title and interest
of the Issuer in and to the Trust Estate following an Event of Default and a
consequent declaration of acceleration of the Maturity of the Notes, whether
such extinguishment occurs through a Sale of the Trust Estate to another Person,
the acquisition of the Trust Estate by the Indenture Trustee or otherwise, the
rights, powers and duties of the Indenture Trustee with respect to the Trust
Estate (or the proceeds thereof) and the Noteholders [and the Note Insurer] and
the rights of Noteholders [and the Note Insurer] shall continue to be governed
by the terms of this Indenture.
(h) The Indenture Trustee or any Custodian appointed pursuant to Section
8.13 shall at all times retain possession of the Home Loan Files in the State of
[ ], except for those Home Loan Files or portions thereof released to the
Servicer pursuant to this Indenture or the related Servicing Agreement.
49
Section 6.02. Notice of Default.
------------------
[Immediately after the occurrence of any Default known to the Indenture
Trustee, the Indenture Trustee shall transmit by mail to the Note Insurer notice
of each such Default and,] within 10 days after the occurrence of any Default
known to the Indenture Trustee, the Indenture Trustee shall transmit by mail and
by telecopy to all Holders of Notes notice of each such Default, unless such
Default shall have been cured or waived; provided, however, that in no event
shall the Indenture Trustee provide notice, or fail to provide notice of a
Default known to the Indenture Trustee in a manner contrary to the requirements
of the Trust Indenture Act. For the purposes of this Section 6.02, the Indenture
Trustee shall not be deemed to have knowledge of any Default unless a
Responsible Officer assigned to and working in the Indenture Trustee's Corporate
Trust Office has actual knowledge thereof or unless written notice of any
Default is received by the Indenture Trustee, [which written notice may be given
by Note Insurer,] and such notice references the Notes, the Trust Estate or this
Agreement. Concurrently with the mailing of any such notice to the Holders of
the Notes, the Indenture Trustee shall transmit by mail a copy of such notice to
the Rating Agencies.
Section 6.03. Rights of Indenture Trustee.
----------------------------
(a) Except as otherwise provided in Section 6.01, 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 any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) [With the consent of the Note Insurer, which consent shall not be
unreasonably withheld,] the Indenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith that it believes to be authorized or within its
rights or powers.
Section 6.04. Not Responsible for Recitals or Issuance of Notes.
--------------------------------------------------
The recitals contained herein and in the Notes, except the certificates of
authentication on the Notes, shall be taken as the statements of the Issuer, and
the Indenture Trustee and the Authenticating Agent assume no responsibility for
their correctness. The Indenture Trustee makes no representations with respect
to the Trust Estate or as to the validity or sufficiency of this Indenture or of
the Notes. The Indenture Trustee shall not be accountable for the use or
application by the Issuer of the Notes or the proceeds thereof or any money paid
to the Issuer or upon Issuer Order pursuant to the provisions hereof.
50
Section 6.05. May Hold Notes.
---------------
The Indenture Trustee, any Agent, or any other agent of the Issuer, in its
individual or any other capacity, may become the owner or pledgee of Notes and,
subject to Section 6.07, may otherwise deal with the Issuer or any Affiliate of
the Issuer with the same rights it would have if it were not Indenture Trustee,
Agent or such other agent.
Section 6.06. Money Held in Trust.
--------------------
Money held by the Indenture Trustee in trust hereunder need not be
segregated from other funds except to the extent required by this Indenture or
by law. The Indenture Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Issuer and
except to the extent of income or other gain on investments that are obligations
of the Indenture Trustee, in its commercial capacity, and income or other gain
actually received by the Indenture Trustee on investments, which are obligations
of others.
Section 6.07. Eligibility; Disqualification.
------------------------------
Irrespective of whether this Indenture is qualified under the TIA, this
indenture shall always have an Indenture Trustee who satisfies the requirements
of TIA Sections 310(a)(1) and 310(a)(5). The Indenture Trustee shall always have
a combined capital and surplus as stated in Section 6.08. The Indenture Trustee
shall be subject to TIA Section 310(h).
Section 6.08. Indenture Trustee's Capital and Surplus.
----------------------------------------
The Indenture Trustee shall at all times have a combined capital and
surplus of at least $100,000,000 or shall be a member of a bank holding company
system, the aggregate combined capital and surplus of which is at least
$100,000,000 and shall at all times be rated "BBB" or better by [Standard &
Poor's]and/or [Fitch] [and "Baa2" by Moody's]; provided, however, that the
Indenture Trustee's separate capital and surplus shall at all times be at least
the amount required by TIA Section 310(a)(2). If the Indenture Trustee publishes
annual reports of condition of the type described in TIA Section 310(a)(1), its
combined capital and surplus for purposes of this Section 6.08 shall be as set
forth in the latest such report. If at any time the Indenture Trustee shall
cease to be eligible in accordance with the provisions of this Section 6.08, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 6.09. Resignation and Removal; Appointment of Successor.
--------------------------------------------------
(a) No resignation or removal of the Indenture Trustee and no appointment
of a successor Indenture Trustee pursuant to this Article shall become effective
until the acceptance of appointment by the successor Indenture Trustee under
Section 6.10.
(b) The Indenture Trustee may resign at any time by giving written notice
thereof to the Issuer, the Master Servicer, [the Note Insurer] and each Rating
Agency. If an instrument of acceptance by a successor Indenture Trustee shall
not have been delivered to the Indenture Trustee within 30 days after the giving
of such notice of resignation, the resigning Indenture
51
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time [with the consent of
the Note Insurer,] by Act of the Holders representing more than 50% of the Note
Balance of the Outstanding Notes, by notice delivered to the Indenture Trustee
and to the Issuer.
(d) If at any time: (1) the Indenture Trustee shall have a conflicting
interest prohibited by Section 6.07 and shall fail to resign or eliminate such
conflicting interest in accordance with Section 6.07 after written request
therefor by the Issuer, [the Note Insurer] or by any Noteholder; or (2) the
Indenture Trustee shall cease to be eligible under Section 6.08 or shall become
incapable of acting or shall be adjudged a bankrupt or insolvent, or a receiver
of the Indenture Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Indenture Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation; then,
in any such case, (i) the Issuer by an Issuer Order, [with the consent of the
Note Insurer,] may remove the Indenture Trustee, and the Issuer shall join with
the Indenture Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint a successor Indenture
Trustee [acceptable to the Note Insurer] and to vest in such successor Indenture
Trustee any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Indenture; provided, however, if the
Issuer [and the Note Insurer] do[es] not join in such appointment within fifteen
(15) days after the receipt by it of a request to do so, or in case an Event of
Default has occurred and is continuing, the Indenture Trustee may petition a
court of competent jurisdiction to make such appointment, or (ii) subject to
Section 5.15, and, in the case of a conflicting interest as described in clause
(1) above, unless the Indenture Trustee's duty to resign has been stayed as
provided in TIA Section 310(b), [the Note Insurer or] any Noteholder who has
been a bona fide Holder of a Note for at least six months may, on behalf of
himself and all others similarly situated, [with the consent of the Note
Insurer,] petition any court of competent jurisdiction for the removal of the
Indenture Trustee and the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of the Indenture Trustee
for any cause, the Issuer, by an Issuer Order shall promptly appoint a successor
Indenture Trustee [acceptable to the Note Insurer]. If within one year after
such resignation, removal or incapability or the occurrence of such vacancy a
successor Indenture Trustee shall be appointed by [the Note Insurer or, with the
consent of the Note Insurer, by] Act of the Holders of Notes representing more
than 50% of the Note Balance of the Outstanding Notes delivered to the Issuer
and the retiring Indenture Trustee, the successor Indenture Trustee so appointed
shall, forthwith upon its acceptance of such appointment, become the successor
Indenture Trustee and supersede the successor Indenture Trustee appointed by the
Issuer. If no successor Indenture Trustee shall have been so appointed by the
Issuer, [the Note Insurer] or Noteholders and shall have accepted appointment in
the manner hereinafter provided, any Noteholder who has been a bona fide Holder
of a Note for at least six months may, on behalf of himself and all others
similarly situated, [with the consent of the Note Insurer], petition any court
of competent jurisdiction for the appointment of a successor Indenture Trustee.
52
(f) The Issuer shall give notice of each resignation and each removal of
the Indenture Trustee and each appointment of a successor Indenture Trustee to
the Holders of Notes [and the Note Insurer]. Each notice shall include the name
of the successor Indenture Trustee and the address of its Corporate Trust
Office.
Section 6.10. Acceptance of Appointment by Successor.
---------------------------------------
Every successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer, [the Note Insurer] and the retiring
Indenture Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective
and such successor Indenture Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Indenture Trustee. Notwithstanding the foregoing, on request of
the Issuer or the successor Indenture Trustee, such retiring Indenture Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Indenture Trustee all the rights, powers and
trusts of the retiring Indenture Trustee, and shall duly assign, transfer and
deliver to such successor Indenture Trustee all property and money held by such
retiring Indenture Trustee hereunder. Upon request of any such successor
Indenture Trustee, the Issuer shall execute and deliver any and all instruments
for more fully and certainly vesting in and confirming to such successor
Indenture Trustee all such rights, powers and trusts.
No successor Indenture Trustee shall accept its appointment unless at the
time of such acceptance such successor Indenture Trustee shall be qualified and
eligible under this Article.
Section 6.11. Merger, Conversion, Consolidation or Succession to Business
-----------------------------------------------------------
of Indenture Trustee.
--------------------
Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Indenture Trustee, shall be the successor of
the Indenture Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Notes have been authenticated, but not delivered, by the Indenture Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Indenture Trustee may adopt such authentication and deliver the
Notes so authenticated with the same effect as if such successor Indenture
Trustee had authenticated such Notes.
Section 6.12. Preferential Collection of Claims Against Issuer.
-------------------------------------------------
The Indenture Trustee (and any co-trustee or separate trustee) shall be
subject to TIA Section 311(a), excluding any creditor relationship listed in TIA
Section 311(b), and an Indenture Trustee (and any co-trustee or separate
trustee) who has resigned or been removed shall be subject to TIA Section 311(a)
to the extent indicated.
53
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees.
------------------------------------------------------
At any time or times, for the purpose of meeting the legal requirements of
any jurisdiction in which any of the Trust Estate may at the time be located,
the Indenture Trustee shall have power to appoint, and, upon the written request
of the Indenture Trustee, [of the Note Insurer] or of the Holders of Notes
representing more than 50% of the Note Balance of the Outstanding Notes with
respect to which a co-trustee or separate trustee is being appointed [with the
consent of the Note Insurer], the Issuer shall for such purpose join with the
Indenture Trustee in the execution, delivery and performance of all instruments
and agreements necessary or proper to appoint, one or more Persons approved by
the Indenture Trustee either to act as co-trustee, jointly with the Indenture
Trustee, of all or any part of the Trust Estate, or to act as separate trustee
of any such property, in either case with such powers as may be provided in the
instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Section. If the Issuer does not join in
such appointment within 15 days after the receipt by it of a request to do so,
or in case an Event of Default has occurred and is continuing, the Indenture
Trustee alone shall have power to make such appointment. All fees and expenses
of any co-trustee or separate trustee shall be payable by the Issuer.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(a) The Notes shall be authenticated and delivered and all rights, powers,
duties and obligations hereunder in respect of the custody of securities, cash
and other personal property held by, or required to be deposited or pledged
with, the Indenture Trustee hereunder, shall be exercised, solely by the
Indenture Trustee.
(b) The rights, powers, duties and obligations hereby conferred or imposed
upon the Indenture Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Indenture Trustee or by the Indenture Trustee and such co-trustee or separate
trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Indenture
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Indenture Trustee at any time, by an instrument in writing
executed by it, with the concurrence of the Issuer evidenced by an Issuer Order,
may accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section, and, in case an Event of Default has occurred and
is continuing, the Indenture Trustee shall have power to accept the resignation
of, or remove, any such co-trustee or separate trustee without the concurrence
of the Issuer upon the written request of the Indenture Trustee, the Issuer
shall join with the Indenture
54
Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to effectuate such resignation or removal. A
successor to any co-trustee or separate trustee so resigned or removed may be
appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally liable
by reason of any act or omission of the Indenture Trustee, or any other such
trustee hereunder.
(e) Any Act of Noteholders delivered to the Indenture Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
Section 6.14. Authenticating Agents.
----------------------
The Issuer shall appoint an Authenticating Agent with power to act on its
behalf and subject to its direction in the authentication and delivery of the
Notes designated for such authentication by the Issuer and containing provisions
therein for such authentication (or with respect to which the Issuer has made
other arrangements, satisfactory to the Indenture Trustee and such
Authenticating Agent, for notation on the Notes of the authority of an
Authenticating Agent appointed after the initial authentication and delivery of
such Notes) in connection with transfers and exchanges under Section 2.06, as
fully to all intents and purposes as though the Authenticating Agent had been
expressly authorized by that Section to authenticate and deliver Notes. For all
purposes of this Indenture (other than in connection with the authentication and
delivery of Notes pursuant to Sections 2.05 and 2.11 in connection with their
initial issuance), the authentication and delivery of Notes by the
Authenticating Agent pursuant to this Section shall be deemed to be the
authentication and delivery of Notes "by the Indenture Trustee." Such
Authenticating Agent shall at all times be a Person that both meets the
requirements of Section 6.08 for the Indenture Trustee hereunder and has an
office for presentation of Notes in the United States of America. The Indenture
Trustee shall initially be the Authenticating Agent and shall be the Note
Registrar as provided in Section 2.06. The office from which the Indenture
Trustee shall perform its duties as Note Registrar and Authenticating Agent
shall be the Corporate Trust Office. Any Authenticating Agent appointed pursuant
to the terms of this Section 6.13 or pursuant to the terms of any supplemental
indenture shall deliver to the Indenture Trustee as a condition precedent to the
effectiveness of such appointment an instrument accepting the trusts, duties and
responsibilities of Authenticating Agent and of Note Registrar or co-Note
Registrar and indemnifying the Indenture Trustee for and holding the Indenture
Trustee harmless against, any loss, liability or expense (including reasonable
attorneys' fees) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance, administration of the trust or
exercise of authority by such Authenticating Agent, Note Registrar or co-Note
Registrar.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any further act on the part of the
parties hereto or the Authenticating Agent or such successor corporation.
55
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Issuer. The Issuer may at any time terminate the agency of
any Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Issuer. Upon receiving such a notice of resignation
or upon such a termination, or in case at any time any Authenticating Agent
shall cease to be eligible under this Section, the Issuer shall promptly appoint
a successor Authenticating Agent, shall give written notice of such appointment
to the Indenture Trustee, and shall mail notice of such appointment to all
Holders of Notes.
The Indenture Trustee agrees, subject to Section 6.01(e), to pay to any
Authenticating Agent from time to time reasonable compensation for its services
and the Indenture Trustee shall be entitled to be reimbursed for such payments
pursuant to Section 8 of the Asset Sale Agreement. The provisions of Sections
2.09, 6.04 and 6.05 shall be applicable to any Authenticating Agent.
Section 6.15. Waiver of Setoff.
-----------------
The Indenture Trustee hereby expressly waives any and all rights of setoff
that the Indenture Trustee may otherwise at any time have under the applicable
law with respect to the Asset Proceeds Account or the Note Account and agrees
that amounts in the Asset Proceeds Account or the Note Proceeds Account shall at
all times be held and applied solely in accordance with the Basic Documents.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of
----------------------------------------------------------
Noteholders.
------------
(a) The Issuer shall furnish or cause to be furnished to the Indenture
Trustee (i) semi-annually, not less than 45 days nor more than 60 days after the
Payment Date occurring closest to six months after the Closing Date and each
Payment Date occurring at six-month intervals thereafter, all information in the
possession or control of the Issuer, in such form as the Indenture Trustee may
reasonably require, as to names and addresses of the Holders of Notes, and (ii)
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.
(b) In addition to furnishing to the Indenture Trustee the Noteholder
lists, if any, required under subsection (a), the Issuer shall also furnish all
Noteholder lists, if any, required under Section 3.03 at the times required by
Section 3.03.
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, if any, furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of the Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
56
Indenture Trustee may destroy any list furnished to it as provided in Section
7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate with other Noteholders [and the Note
Insurer] 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 Section 312(c).
Section 7.03. Reports by Indenture Trustee.
-----------------------------
(a) Within 60 days after December 31 of each year (the "Reporting Date"),
commencing with the year after the issuance of the Notes, (i) the Indenture
Trustee shall, if required by TIA Section 313(a), mail to all Holders [and to
the Note Insurer] a brief report dated as of such Reporting Date that complies
with TIA Section 313(a); (ii) the Indenture Trustee shall, to the extent not set
forth in the Payment Date Statement pursuant to Section 2.08(d), also mail to
the Noteholders with respect to which the Indenture Trustee has made advances,
[and to the Note Insurer,] any reports with respect to such advances that are
required by TIA Section 313(b)(2); and (iii) the Indenture Trustee shall also
mail to the Noteholders [and the Note Insurer] any reports required by TIA
Section 313(b)(1). For purposes of the information required to be included in
any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1) (if applicable),
or 313(b)(2), the principal amount of indenture securities outstanding on the
date as of which such information is provided shall be the balance of the then
Outstanding Notes covered by the report.
(b) A copy of each report required under this Section 7.03 shall, at the
time of such transmission to the Noteholders [and the Note Insurer] be filed by
the Indenture Trustee with the Commission and with each securities exchange upon
which the Notes are listed. The Issuer will notify the Indenture Trustee when
the Notes are listed on any securities exchange.
Section 7.04. Reports by Issuer.
------------------
The Issuer (a) shall deliver to the Indenture Trustee [and to the Note
Insurer] within 15 days after the Issuer is required to file the same with the
Commission copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) that the Issuer is required
to file with the Commission pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, and (b) shall also comply with the other
provisions of TIA Section 314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Collection of Moneys.
---------------------
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
57
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall hold all such money and property received by it as part of the
Trust Estate and shall apply it as provided in this Indenture.
If the Indenture Trustee shall not have received the Remittable Funds by
close of business on any related Payment Date, the Indenture Trustee shall,
unless the Issuer or the Servicer shall have made provisions satisfactory to the
Indenture Trustee for delivery to the Indenture Trustee of an amount equal to
such Remittable Funds, deliver a notice to the Master Servicer, [with a copy to
the Note Insurer,] the Issuer and the Servicer, of their failure to remit such
Remittable Funds and that such failure, if not remedied by the close of business
on the fifth day following the related Payment Date, shall constitute an Event
of Default under this Indenture. Notwithstanding any other provision hereof, the
Indenture Trustee shall deliver to the Issuer or the Servicer, or their
respective designee or assignee, any Remittable Funds received with respect to a
Home Loan after the related Payment Date to the extent that the Issuer or the
Servicer, respectively, previously made payment or provision for payment with
respect to such Remittable Funds in accordance with this Section 8.01, and any
such Remittable Funds shall not be deemed part of the Trust Estate.
Except as otherwise expressly provided in this Indenture and the Master
Servicing Agreement, if, following delivery by the Indenture Trustee of the
notice described above, the Issuer or the Master Servicer shall fail to remit
the Remittable Funds on any Payment Date, the Indenture Trustee shall take such
actions, if any, as are required of the Indenture Trustee under Article VI of
the Master Servicing Agreement.
In addition, if a Master Servicer Default occurs under the Master
Servicing Agreement, the Indenture Trustee may, and [upon the request of the
Note Insurer or, with the consent of the Note Insurer (unless a Note Insurer
Default then exists),] the Holders of Notes representing more than 50% of the
Note Balance of the Outstanding Notes shall, take such action as may be
appropriate to enforce performance by the Master Servicer of its obligations
under the Master Servicing Agreement, including the institution and prosecution
of appropriate Proceedings. [If at the time a Master Servicer Default occurs
there also exists a Note Insurer Default, such Noteholders may take such action
directly in the event that the Indenture Trustee and the Master Servicer are one
and the same Person.] Any such action shall be without prejudice to any right to
claim a Default or Event of Default under this Indenture and to proceed
thereafter as provided in Article V.
Section 8.02. Note Account.
-------------
(a) The Issuer hereby directs the Indenture Trustee to establish one or
more accounts that shall collectively be the "Note Account" on or before the
Closing Date. The Indenture Trustee shall promptly deposit in the Note Account
(i) all Remittable Funds received by it from the Servicer pursuant to the
Servicing Agreement, (ii) any other funds from any deposits to be made by the
Servicer pursuant to the Servicing Agreement, (iii) any amount required to be
deposited in the Note Account pursuant to Section 8.01, (iv) all amounts
received pursuant to Section 8.03, and (v) all other amounts received for
deposit in the Note Account, including the payment of any Purchase Price
received by the Indenture Trustee. All amounts that are deposited from time to
time in the Note Account are subject to withdrawal by the Indenture
58
Trustee for the purposes set forth in subsections (c) and (d) of this Section
8.02. All funds withdrawn from the Note Account pursuant to subsection (c) of
this Section 8.02 for the purpose of making payments to the Holders of Notes
shall be applied in accordance with Section 3.03.
(b) So long as no Default or Event of Default shall have occurred and be
continuing, amounts held in the Note Account shall be invested at the direction
of the Transferor in Permitted Investments, which Permitted Investments shall
mature no later than the Business Day preceding the immediately following
Payment Date or, if such Permitted Investments are an obligation of the
Indenture Trustee or are money market funds for which the Indenture Trustee or
any Affiliate is the manager or the advisor, such Permitted Investments shall
mature no later than the immediately following Payment Date. All income or other
gains, if any, from investment of moneys deposited in the Note Account shall be
for the benefit of the Transferor and on each Payment Date, any such amounts may
be released from the Note Account and paid to the Transferor. Any loss resulting
from such investment of moneys deposited in the Note Account shall be reimbursed
immediately as incurred to the Note Account by the Transferor. Subject to
Section 6.01 and unless the Indenture Trustee is the obligor on any Permitted
Investment, the Indenture Trustee shall not in any way be held liable by reason
of any insufficiency in the Note Account.
(c) On each Payment Date, the Indenture Trustee shall withdraw amounts on
deposit in the Note Account and pay on a pari passu basis the [Note Insurer
Premium,] the Indenture Trustee Fee, the [Custodial Fee] and the [Master
Servicing Fee.] After payment of such amounts, unless the Notes have been
declared due and payable pursuant to Section 5.02 and moneys collected by the
Indenture Trustee are being applied in accordance with Section 5.07, Available
Funds on deposit in the Note Account on any Payment Date or Redemption Date
shall be withdrawn from the Note Account, in the amounts required, for
application on such Payment Date as follows:
first, [to the payment to the Note Insurer, as subrogee to the rights of
-----
the Noteholders, the aggregate amount necessary to reimburse the Note
Insurer for any unreimbursed Insured Payments paid by the Note Insurer on
prior Payment Dates, together with interest thereon at the "Late Payment
Rate" specified in the Insurance Agreement from the date such Insured
Payments were paid by the Note Insurer to such Payment Date and the amount
of any unpaid Note Insurer Premium for any prior Payment Date together
with interest thereon at the "Late Payment Rate" specified in the
Insurance Agreement from the date such amounts were due; provided,
however, that the Note Insurer shall be paid such amounts only after the
Noteholders have received the Deficiency Amount with respect to such
Payment Date;]
second, to the Noteholders the Note Interest for such Payment Date;
------
third, to the Noteholders, the amount of Monthly Principal for such
-----
Payment Date in reduction of the Note Balance until the Note Balance
reduced to zero;
fourth, to the Noteholders in reduction of the Note Balance, the amount,
------
if any, equal to the lesser of (A) the Excess Cash with respect to such
Payment Date, and (B) the lesser of (1) the amount necessary for the
Overcollateralization Amount to equal the Required
59
Overcollateralization Amount on such Payment Date (after giving effect to
application of Monthly Principal for such Payment Date) and (2) the amount
necessary to reduce the Note Balance to zero (the "Excess Cash Payment");
fifth, to the Note Insurer, any amounts due and owing under the Insurance
-----
Agreement that are not described in clause "first" above;
sixth, to the Servicer any unreimbursed Servicing Advances not recoverable
-----
by the Servicer on a priority basis pursuant to the related Servicing
Agreement (as reported in writing by the Servicer to the Indenture
Trustee).
(d) On or after each Payment Date, so long as the Indenture Trustee shall
have prepared a Payment Date Statement in respect of such Payment Date and (1)
shall have made, or, in accordance with Section 3.03, set aside from amounts in
the Note Account an amount sufficient to make, the payments required to be made
as set forth in Section 8.02(c) as indicated in such Payment Date Statement, and
(2) shall have set aside any amounts that have been deposited in the Note
Account prior to such time that represent amounts that are to be used to make
payments on the Notes on the next succeeding Payment Date, the cash balance, if
any, then remaining in the Note Account shall be withdrawn from the Note Account
by the Indenture Trustee and, so long as no Default or Event of Default shall
have occurred and be continuing, shall be released from the lien of this
Indenture and paid by the Indenture Trustee to the Certificateholders.
(e) Any payments made by the Indenture Trustee to the Issuer pursuant to
this Section 8.02 shall be remitted to the Certificate Distribution Account
established and maintained pursuant to the Owner Trust Agreement.
Section 8.03. [Claims against the Note Insurance Policy.
------------------------------------------
(a) (i) The Indenture Trustee shall (A) receive as attorney-in-fact of
each Noteholder any Insured Payment from the Note Insurer or on behalf of
the Note Insurer and (B) disburse such Insured Payment to such Noteholders
in accordance with Section 8.02(c) hereof for the benefit of the related
Noteholders. Any Insured Payment received by the Indenture Trustee shall
be held by the Indenture Trustee uninvested. Insured Payments disbursed by
the Indenture Trustee from proceeds of the Note Insurance Policy shall not
be considered payment by the Issuer with respect to the Notes, nor shall
such payments discharge the obligation of the Issuer with respect to such
Notes, and the Note Insurer shall become the owner of such unpaid amounts
due from the Issuer in respect of such Insured Payments as the deemed
assignee and subrogee of such Noteholders and shall be entitled to receive
the reimbursement in respect thereof. The Indenture Trustee hereby agrees
on behalf of each Noteholder for the benefit of the Note Insurer that it
recognizes that to the extent the Note Insurer makes Insured Payments for
the benefit of the Noteholders, the Note Insurer will be entitled to
receive the related reimbursement in accordance with the priority of
distributions referenced in Section 8.02(c) hereof.
(ii) The Indenture Trustee shall promptly notify the Note Insurer of
any proceeding or the institution of any action, of which a Responsible
Officer of the
60
Indenture Trustee has actual knowledge, constituting a Preference Amount
in respect of any payment made on the Notes. Each Noteholder that pays any
amount pursuant to a Preference Amount theretofore received by such
Noteholder on account of a Note will be entitled to receive reimbursement
for such amounts from the Note Insurer in accordance with the terms of the
Note Insurance Policy. Each Noteholder, by its purchase of Notes, and the
----
Indenture Trustee hereby agree that, the Note Insurer (so long as no Note
Payment Default exists) may at any time during the continuation of any
proceeding relating to a Preference Amount direct all matters relating to
such Preference Amount, including, without limitation, (i) the direction
of any appeal of any order relating to such Preference Amount and (ii) the
posting of any surety, supersedeas or performance Note pending any such
appeal. In addition and without limitation of the foregoing, the Note
Insurer shall be subrogated to the rights of the Indenture Trustee and
each Noteholder in the conduct of any such Preference Amount, including,
without limitation, all rights of any party to any adversary proceeding
action with respect to any court order issued in connection with any such
Preference Amount.
(iii) Each Noteholder, by its purchase of Notes, and the Indenture
Trustee hereby agree that, unless a Note Insurer Payment Default exists
and is continuing, the Note Insurer shall have the right to direct all
matters relating to the Notes in any Proceeding in a bankruptcy of the
Issuer, including without limitation any Proceeding relating to a
Preference Amount and the posting of any surety or Note pending any such
appeal.
(iv) With respect to a Preference Amount, the Indenture Trustee
shall be responsible for procuring and delivering the items set forth in
the Note Insurance Policy to the Note Insurer.
(b) Unless a Note Insurer Default exists and is continuing, the
Indenture Trustee shall cooperate in all respects with any reasonable request by
the Note Insurer for action to preserve or enforce the Note Insurer's rights or
interests hereunder without limiting the rights or affecting the interests of
the Noteholders as otherwise set forth herein.
(c) The Indenture Trustee shall surrender the Note Insurance Policy to
the Note Insurer for cancellation upon the expiration of the term of the Note
Insurance Policy as provided in the Note Insurance Policy.
(d) With respect to any Payment Date on which an Insured Payment is
required to be made, the Indenture Trustee shall deliver to the Note Insurer a
Notice of Claim (in the manner specified in the Note Insurance Policy) by no
later than noon on the third Business Day prior to such Payment Date in the
manner set forth in the Note Insurance Policy.]
Section 8.04. General Provisions Regarding the Note Account and Home
------------------------------------------------------
Loans.
------
(a) The Note Account shall relate solely to the Notes and to the Home
Loans, Permitted Investments and other property securing the Notes. Funds and
other property in the Note Account shall not be commingled with any other moneys
or property of the Issuer or any Affiliate thereof. Notwithstanding the
foregoing, the Indenture Trustee may hold any funds or
61
other property received or held by it as part of the Note Account in collective
accounts maintained by it in the normal course of its business and containing
funds or property held by it for other Persons (which may include the Issuer or
an Affiliate), provided that such accounts are under the sole control of the
Indenture Trustee and the Indenture Trustee maintains adequate records
indicating the ownership of all such funds or property and the portions thereof
held for credit to the Note Account.
(b) If any amounts are needed for payment from the Note Account and
sufficient uninvested funds are not available therein to make such payment, the
Indenture Trustee shall cause to be sold or otherwise converted to cash a
sufficient amount of the investments in the Note Account.
(c) The Indenture Trustee shall, at all times while any Notes are
Outstanding, maintain in its possession, or in the possession of an agent whose
actions with respect to such items are under the sole control of the Indenture
Trustee, all certificates or other instruments, if any, evidencing any
investment of funds in the Note Account. The Indenture Trustee shall relinquish
possession of such items, or direct its agent to do so, only for purposes of
collecting the final payment receivable on such investment or certificate or, in
connection with the sale of any investment held in the Note Account, against
delivery of the amount receivable in connection with any sale.
(d) The Indenture Trustee shall not invest any part of the Trust Estate in
Permitted Investments that constitute uncertificated securities (as defined in
Section 8-102 of the Uniform Commercial Code, as enacted in the relevant
jurisdiction) or in any other book-entry securities unless it has received an
Opinion of Counsel reasonably satisfactory in form and substance to the
Indenture Trustee setting forth, with respect to each type of security for which
authority to invest is being sought, the procedures that must be followed to
maintain the lien and security interest created by this Indenture with respect
to the Trust Estate.
Section 8.05. Releases of Defective Home Loans.
---------------------------------
Upon notice or discovery that any of the representations or warranties of
the Seller set forth in Section 4 of the Asset Sale Agreement was materially
incorrect or otherwise misleading with respect to any Home Loan as of the time
made, the Indenture Trustee shall direct the Seller to either (i) within 60 days
after the Seller receives actual knowledge of such incorrectness, eliminate or
otherwise cure the circumstance or condition in respect of which such
representation or warranty was incorrect as of the time made, or (ii) withdraw
such Defective Home Loan from the lien of this Indenture following the
expiration of such 60-day period by depositing to the Note Account an amount
equal to the Purchase Price for such Home Loan. Notwithstanding the foregoing,
the Seller shall be required pursuant to Section 7(b) of the Asset Sale
Agreement to promptly purchase and withdraw from the lien of this Indenture,
without the opportunity for cure, any Home Loan as to which the Final
Certification notes as an exception the absence of a duly executed Assignment of
Mortgage [unless such repurchase is waived by the Note Insurer.] Upon any
purchase of a Defective Home Loan by the Seller in accordance with Section 7 of
the Asset Sale Agreement, the Indenture Trustee shall deliver or cause the
Custodian to deliver the Home Loan File relating to such Defective Home Loan to
the Seller, and the Issuer and the Indenture Trustee shall execute such
instruments of transfer furnished to them by the Servicer as
62
are necessary to convey title to such Defective Home Loan to the Seller from the
lien of this Indenture.
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to
------------------------------------------------------
Certain Information.
--------------------
On each Payment Date, the Indenture Trustee shall deliver the Payment Date
Statement to Noteholders of record as of the related Record Date (including the
Clearing Agency, if any).
The Indenture Trustee shall make available at its Corporate Trust Office,
during normal business hours, for review by any Noteholder or any person
identified to the Indenture Trustee as a prospective Noteholder, originals or
copies of the following items: (a) the Indenture and any amendments thereto, (b)
all Payment Date Statements delivered to the Issuer since the Closing Date, (c)
any Officers' Certificates delivered to the Indenture Trustee since the Closing
Date as described in the Indenture and (d) any Accountants' reports delivered to
the Indenture Trustee since the Closing Date as required under the Servicing
Agreement. Copies of any and all of the foregoing items will be available from
the Indenture Trustee upon request; however, the Indenture Trustee will be
permitted to require payment of a sum sufficient to cover the reasonable costs
and expenses of providing such copies and shall not be required to provide such
copies without reasonable assurances that such sum will be paid.
Section 8.07. Amendment to Master Servicing Agreement.
----------------------------------------
The Indenture Trustee may, without the consent of any Holder, enter into
or consent to any amendment or supplement to the Master Servicing Agreement for
the purpose of increasing the obligations or duties of any party other than the
Indenture Trustee or the Holders of the Notes. The Indenture Trustee may, in its
discretion, decline to enter into or consent to any such supplement or
amendment: (i) unless the Indenture Trustee receives an Opinion of Counsel that
the position of the Holders would not be materially adversely affected or
written confirmation from the Rating Agencies that the then-current implied
ratings on the Notes [(without taking into account the Note Insurance Policy)]
would not be adversely affected by such supplement or amendment or (ii) if its
own rights, duties or immunities would be adversely affected. The Indenture
Trustee will send a copy of each such amendment to each Noteholder by telecopy
promptly after the adoption thereof.
Section 8.08. Servicer as Agent.
------------------
In order to facilitate the servicing of the Home Loans by the Servicer of
such Home Loans, the Servicer of the Home Loans has been appointed by the Issuer
to retain, in accordance with the provisions of the Servicing Agreement and this
Indenture, all Remittable Funds on such Home Loans prior to their deposit into
the Asset Proceeds Account on or prior to the related Deposit Date.
Section 8.09. Termination of Master Servicer.
-------------------------------
Upon the occurrence and during the continuance of a Master Servicer
Default (as defined in the Servicing Agreement) specified in Section 3.05 of the
Master Servicing Agreement, the Indenture Trustee may, [with the consent of the
Note Insurer,] and shall, [upon the direction of
63
the Note Insurer (or as otherwise provided in the Master Servicing Agreement),]
terminate the Master Servicer as provided in Section 3.05 of the Master
Servicing Agreement. If the Indenture Trustee terminates the Master Servicer,
the Indenture Trustee shall pursuant to Section 3.05 of the Master Servicing
Agreement assume the duties of the Master Servicer or appoint a successor Master
Servicer acceptable to the Issuer, [the Note Insurer] and the Rating Agencies
and meeting the requirements set forth in the Master Servicing Agreement.
Notwithstanding the foregoing, if upon the occurrence of a Master Servicer
Default the Indenture Trustee and the Master Servicer are one and the same
Person, [then the Note Insurer shall appoint a successor Master Servicer that
satisfies the foregoing requirements unless at such time a Note Insurer Default
exists, in which event] such successor Master Servicer shall be appointed by the
percentage of Noteholders authorized to act upon the occurrence of an Event of
Default hereunder.
Section 8.10. Opinion of Counsel.
-------------------
The Indenture Trustee shall be entitled to receive at least five Business
Days' notice of any action to be taken pursuant to Section 8.06, accompanied by
copies of any instruments involved, and the Indenture Trustee shall be entitled
to receive an Opinion of Counsel, in form and substance reasonably 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. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action.
Section 8.11. Appointment of Custodians.
--------------------------
The Indenture Trustee shall, [with the consent of the Issuer and the Note
Insurer,] appoint one or more Custodians to hold all or a portion of the Home
Loan Files as bailee of the Indenture Trustee on behalf of the Holders of the
Notes and the Note Insurer. Each Custodian shall (i) be a financial institution
supervised and regulated by the Comptroller of the Currency, the Board of
Governors of the Federal Reserve System, the Office of Thrift Supervision, or
the FDIC; (ii) have combined capital and surplus of at least $10,000,000; (iii)
be equipped with secure, fireproof storage facilities, and have adequate
controls on access to assure the safety and security of the Home Loan Files;
(iv) utilize in its custodial function employees who are knowledgeable in the
handling of mortgage documents and the functions of a mortgage document
custodian; (v) shall not be an Affiliate of the Issuer, the Depositor, the
Seller or the Master Servicer; and (vi) satisfy any other reasonable
requirements that the Indenture Trustee may from time to time deem necessary to
protect the interests of Noteholders [and the Note Insurer] in the Home Loan
Files. Each Custodian shall be subject to the same obligations and standard of
care as would be imposed on the Indenture Trustee hereunder assuming the
Indenture Trustee retained the Home Loan Files directly.
Section 8.12. [Rights of the Note Insurer to Exercise Rights of
-------------------------------------------------
Noteholders.
------------
By accepting its Notes, each Noteholder agrees that unless a Note Insurer
Default exists, the Note Insurer shall have the right to exercise all rights of
the Noteholders under this
64
Agreement without any further consent of the Noteholders (except those rights
requiring consent of all such holders under Section 9.02 hereof) including,
without limitation:
(i) the right to require the Master Servicer to enforce the
Servicer's obligations under the related Servicing Agreement;
(ii) the right to require the Seller to repurchase Defective Home
Loans pursuant to the Asset Sale Agreement;
(iii) the right to direct the actions of the Indenture Trustee
during the continuance of an Event of Default; and
(iv) the right to vote on proposed amendments to this Indenture.
In addition, each Noteholder agrees that, unless a Note Insurer Default exists,
the rights specifically set forth above may be exercised by the Noteholders only
with the prior written consent of the Note Insurer.
Except as otherwise provided in Section 8.03 and notwithstanding any
provision in this Indenture to the contrary, so long as a Note Insurer Default
has occurred and is continuing, the Note Insurer shall have no rights to
exercise any voting rights of the Noteholders hereunder, nor shall the Indenture
Trustee be required to obtain the consent of, or act at the direction of, the
Note Insurer.]
Section 8.13. [Trust Estate and Accounts Held for Benefit of the Note
-------------------------------------------------------
Insurer.
--------
The Indenture Trustee shall hold the Trust Estate and the Home Loan Files
for the benefit of the Noteholders and the Note Insurer and all references in
this Agreement and in the Notes to the benefit of Holders of the Notes shall be
deemed to include the Note Insurer (provided there does not exist a Note Insurer
Default).
All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to any other party hereto or to the Noteholders shall
also be sent to the Note Insurer.]
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
-------------------------------------------------------
[With the consent of the Note Insurer and without the consent of the
Holders of any Notes,] the Issuer and the Indenture Trustee, at any time and
from time to time, may enter into one or more indentures supplemental hereto, in
form satisfactory to the Indenture Trustee, for any of the following purposes:
(a) 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
65
subject or required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(b) to add to the conditions, limitations and restrictions on the
authorized amount, terms and purposes of the issuance, authentication and
delivery of any Notes, as herein set forth, additional conditions, limitations
and restrictions thereafter to be observed;
(c) to evidence the succession of another Person to the Issuer to the
extent permitted herein, and the assumption by any such successor of the
covenants of the Issuer herein and in the Notes contained;
(d) to add to the covenants of the Issuer, for the benefit of the Holders
of all Notes [and the Note Insurer] or to surrender any right or power herein
conferred upon the Issuer;
(e) to cure any ambiguity, to correct or supplement any provision herein
that may be defective or inconsistent with any other provision herein, or to
amend any other provisions with respect to matters or questions arising under
this Indenture, which shall not be inconsistent with the provisions of this
Indenture, provided that such action shall not adversely affect in any material
respect the interests of the Holders of the Notes; and provided, further, that
the amendment shall not be deemed to adversely affect in any material respect
the interests of the Holders of the Notes [and the Note Insurer] if the Person
requesting the amendment obtains an Opinion of Counsel to such effect or obtains
written confirmation from each Rating Agency that such supplemental indenture
will not adversely effect the then-current ratings assigned to the Notes; or
(f) 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.
Section 9.02. Supplemental Indentures With Consent of Noteholders.
----------------------------------------------------
With [the consent of the Note Insurer and with] the consent of Holders of
Notes representing not less than a majority of the Note Balance of all
Outstanding Notes by Act of said Holders delivered to the Issuer and the
Indenture Trustee, the Issuer and the Indenture Trustee may 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 Outstanding Note
affected thereby:
(a) change the date of any Payment Date or the Stated Maturity Date of the
Notes or reduce the principal amount thereof, the Note Interest Rate thereon or
the Redemption Price with respect thereto, change the earliest date on which any
Note may be redeemed at the option of the Issuer, change any place of payment
where, or the coin or currency in which, any Note or any interest thereon is
payable, or impair the right to institute suit for the enforcement of the
payment of any installment of interest due on any Note on or after the Stated
Maturity Date thereof or for the enforcement of the payment of the entire
remaining unpaid principal amount of any Note on
66
or after the Stated Maturity Date (or, in the case of redemption, on or after
the applicable Redemption Date);
(b) reduce the percentage of the Note Balance of the Outstanding 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 provisions of this Indenture or Defaults hereunder and their
consequences provided for in this Indenture;
(c) modify any of the provisions of this Section, Section 5.13 or Section
5.17(b), except to increase any percentage specified therein or to provide that
certain other provisions of this Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby;
(d) modify or alter the provisions of the proviso to the definition of the
term "Outstanding";
(e) permit the creation of any lien other than the lien of this Indenture
with respect to any part of the Trust Estate (except as otherwise permitted or
contemplated herein) or terminate the lien of this Indenture on any property at
any time subject hereto or deprive the Holder of any Note of the security
afforded by the lien of this Indenture;
(f) modify any of the provisions of this Indenture in such manner as to
affect the calculation of the Deficiency Amount for any Payment Date (including
the calculation of any of the individual components of such Deficiency Amount)
or to affect rights of the Holders of the Notes to the benefits of any
provisions for the mandatory redemption of Notes contained herein; or
(g) incur any indebtedness, other than the Notes, that would cause the
Issuer or the Trust Estate to be treated as a "taxable mortgage pool" within the
meaning of Code Section 7701(i).
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.
It shall not be necessary for any Act of Noteholders under this Section 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, the Indenture Trustee shall
mail such supplemental indenture and a notice setting forth in general terms the
substance of such supplemental indenture to the Holders of the Notes to which
such supplemental indenture relates. 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.
67
Section 9.03. Execution of Supplemental Indentures.
-------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Indenture Trustee shall be entitled to
receive, and (subject to Section 6.01) 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. 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 or immunities under this
Indenture or otherwise. The Issuer shall cause executed copies of any
supplemental indentures to be delivered to the Rating Agencies.
Section 9.04. Effect of Supplemental Indentures.
----------------------------------
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes to which such supplemental indenture relates that have theretofore been
or thereafter are authenticated and delivered hereunder shall be bound thereby.
Section 9.05. Conformity with Trust Indenture Act.
------------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
Section 9.06. Reference in Notes to Supplemental Indentures.
----------------------------------------------
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article 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 shall so
determine, new Notes so modified as to conform, in the opinion of 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.
Section 9.07. Amendments to Governing Documents.
----------------------------------
The Indenture Trustee shall, upon Issuer Request, consent to any proposed
amendment to the Issuer's governing documents, or an amendment to or waiver of
any provision of any other document relating to the Issuer's governing
documents, such consent to be given without the necessity of obtaining the
consent of the Holders of any Notes upon receipt by the Indenture Trustee of:
(i) an Officers' Certificate, to which such proposed amendment or
waiver shall be attached, stating that such attached copy is a true copy
of the proposed amendment or waiver and that all conditions precedent to
such consent specified in this Section 9.07 have been satisfied; and
68
(ii) written confirmation from the Rating Agencies that the
implementation of the proposed amendment or waiver will not adversely
affect their implied ratings of the Notes [(without taking into account
the Note Insurance Policy)].
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that any Person
obtain the consent of the Indenture Trustee to any amendment or waiver or any
provision of any document where the making of such amendment or the giving of
such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption.
-----------
(a) All the Notes may be redeemed in whole, but not in part, on the
Redemption Date at the Redemption Price at the option of the holders of a
majority of the percentage interests of the Certificates, [or at the option of
the Note Insurer,] if such Certificateholders shall not have exercised their
option to redeem the Notes on such Redemption Date, provided, however, that
funds in an amount equal to the Redemption Price, [plus any amounts owed to the
Note Insurer under the Insurance Agreement,] any unreimbursed Servicing Advances
and any unreimbursed amounts due and owing to the Indenture Trustee hereunder,
must have been deposited with the Indenture Trustee prior to the Indenture
Trustee's giving notice of such redemption pursuant to Section 10.02 or the
Issuer shall have complied with the requirements for satisfaction and discharge
of the Notes specified in Section 4.01. Notice of the election to redeem the
Notes shall be furnished to the Indenture Trustee and each Noteholder not later
than thirty (30) days prior to the Payment Date selected for such redemption,
whereupon all such Notes shall be due and payable on such Payment Date upon the
furnishing of a notice pursuant to Section 10.02 to each Holder of such Notes
[and the Note Insurer].
(b) Upon receipt of the notice from the party exercising its election to
redeem the Notes pursuant to Section 10.01(a), the Indenture Trustee shall
prepare and deliver to the Issuer, no later than the related Redemption Date, a
Payment Date Statement stating therein that it has determined that the
conditions to redemption at the option of the Issuer have been satisfied and
setting forth the amount, if any, to be withdrawn from the Note Account and paid
to the Servicer as reimbursement for Servicing Advances and such other
information as may be required to accomplish such redemption.
(c) The Notes may be redeemed in whole, but not in part, on a Payment
Date specified by the Issuer at any time upon a determination by the Issuer,
based on an Opinion of Counsel addressed to the Issuer, the Indenture Trustee,
[the Note Insurer] and the Noteholders,
69
that a substantial risk exists that the Notes will not be treated for federal
income tax purposes as evidences of indebtedness.
Section 10.02. Form of Redemption Notice.
--------------------------
Notice of redemption shall be given by the Indenture Trustee in the name
of and at the expense of the Issuer by first class mail, postage prepaid, mailed
not less than ten days prior to the Redemption Date to each Holder of Notes to
be redeemed (with a copy sent to each Noteholder by telecopy), such Holders
being determined as of the Record Date for such Payment Date, [and to the Note
Insurer.] All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price at which such Notes will be redeemed; and
(c) the fact of payment in full on such Notes, the place where such
Notes are to be surrendered for payment of the Redemption Price (which shall be
the office or agency of the Issuer to be maintained as provided in Section
3.02), and that no interest shall accrue on such Note for any period after the
date fixed for redemption.
Failure to give notice of redemption, or any defect therein, to any Holder of
any Note selected for redemption shall not impair or affect the validity of the
redemption of any other Note.
Section 10.03. Notes Payable on Optional Redemption.
-------------------------------------
Notice of redemption having been given as provided in Section 10.02, the
Notes to be redeemed shall, on the applicable Redemption Date, become due and
payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on such Redemption
Price for any period after such Redemption Date; provided, however, that if such
Redemption Price is not paid on the Redemption Date, the Note Balance shall,
until paid, bear interest from the Redemption Date at the Note Interest Rate.
ARTICLE XI
NOTE ADMINISTRATION
Section 11.01. Powers and Duties of the Securities Administrator.
--------------------------------------------------
(a) In addition to the other obligations of the Securities Administrator
set forth in this Indenture, the Securities Administrator shall perform, on
behalf of the Trust acting through the Owner Trustee, the duties of the Issuer
specified below, and shall consult with the Owner Trustee regarding such duties.
(i) The monitoring of and compliance with the Trust's obligations
under Section 3.12 (but only to the extent of the Securities
Administrator's obligations under clause (ii) below);
70
(ii) The preparation and delivery of the income tax returns, tax
elections, financial statements, and such annual or other reports of the
Trust pursuant to Section 2.11(k) of the Owner Trust Agreement; provided,
--------
however, that the Securities Administrator shall not be required to
-------
compute the Trust's gross income except to the extent it can do so without
unreasonable effort or expense based upon income statements furnished to
it; and provided, further, that the Securities Administrator shall not be
-------- -------
required to prepare and file partnership tax returns on behalf of the
Issuer unless it receives an opinion of counsel (which shall not be at the
Securities Administrator's expense, but shall be at the expense of the
Seller or other party furnishing such opinion) as to the necessity of such
filings; and
(iii) The Depositor shall prepare or cause to be prepared the
initial current reports on Form 8-K to be filed prior to the first Payment
Date and thereafter the Securities Administrator will prepare or cause to
be prepared Form 10-Ks and Form 10-Qs (if necessary), or monthly current
reports on Form 8-K, on behalf of the Trust, as may be required by
applicable law, for filing with the Securities and Exchange Commission
(the "SEC"). The Owner Trustee will sign each such report on behalf of the
Trust. The Securities Administrator will forward a copy of such report to
the Indenture Trustee and the Depositor promptly after such report has
been filed with the SEC. The Securities Administrator agrees to use its
best efforts to seek to terminate such filing obligation after the period
during which such filings are required under the Securities Exchange Act
of 1934. Promptly after filing a Form 15 or other applicable form with the
SEC in connection with such termination, the Securities Administrator
shall deliver to the Indenture Trustee and the Depositor a copy of such
form together with copies of confirmations of receipt by the SEC of each
report filed therewith on behalf of the Trust.
(b) The Securities Administrator shall carry out in timely fashion all
duties which the Securities Administrator is required to perform hereunder on
behalf of the Issuer. The Securities Administrator shall have absolute
discretion in the performance of such duties and shall have no obligation to
notify the Owner Trustee of its actions except as set forth herein.
Section 11.02. Compensation; Payment of Certain Expenses.
------------------------------------------
The Securities Administrator will provide the services called for
hereunder for the compensation provided in the Servicing Agreement for so long
as the Indenture remains in effect.
Section 11.03. Instructions.
-------------
If in performing its duties under this Article XI, the Securities
Administrator is required to determine any matter or perform any function above
which is non-ministerial in nature, then the Securities Administrator shall
properly deliver notice to the Indenture Trustee or to the Owner Trustee and the
Certificateholders, as applicable, requesting written instructions as to the
course of action to be taken. If the Securities Administrator does not receive
such instructions within ten days after it has delivered such notice, it may,
but shall be under no duty to, take or refrain from taking such action not
inconsistent with this Indenture or the Owner Trust
71
Agreement as it shall deem advisable in the best interest of the holders of the
Notes and the Trust.
Section 11.04. Benefit of the Agreement.
-------------------------
It is expressly agreed that, in performing its duties pursuant to this
Article XI, the Securities Administrator will act for the benefit of holders of
the Notes [and the Note Insurer ]as well as for the benefit of the Trust, and
that such obligations on the part of the Securities Administrator shall be
enforceable at the instance of the Indenture Trustee and the Trust.
Section 11.05. Limitation of Responsibility of the Securities
----------------------------------------------
Administrator.
--------------
(a) The Securities Administrator will have no responsibility under this
Indenture other than to render the services provided for hereunder in good
faith. The Securities Administrator, its affiliates, its directors, officers,
shareholders, and employees will not be liable to the Trust, the Owner Trustee,
the Indenture Trustee, the Certificateholders, the Noteholders, or others,
except by reason of acts constituting bad faith, willful misfeasance, gross
negligence, or reckless disregard of the duties of the Securities Administrator
hereunder. The Issuer will reimburse, indemnify, and hold harmless the
Securities Administrator and its affiliates, shareholders, directors, officers,
and employees with respect to all expenses, losses, damages, liabilities,
demands, charges, and claims of any nature in respect of any acts or omissions
performed or omitted by the Securities Administrator in good faith and in
accordance with the standard set forth above.
(b) The Issuer undertakes to pay or cause to be paid any amount due the
Securities Administrator or its affiliates, shareholders, directors, officers
and employees, under this Article XI and such amounts shall be paid as provided
for under this Indenture or out of the assets of the Trust that are free of the
lien of this Indenture (and in no event by Wilmington Trust Company in its
individual capacity).
Section 11.06. Termination of Securities Administrator.
----------------------------------------
(a) The Securities Administrator, at its election, may resign as
Securities Administrator hereunder and be discharged of its duties hereunder
upon at least 30 days' prior notice to the Owner Trustee, [the Note Insurer,]
and the Indenture Trustee; provided, however, that at any time while the Notes
are outstanding no such resignation and discharge shall become effective until a
Person selected by the Securities Administrator in its discretion and acceptable
to the Owners, [the Note Insurer,] and the Rating Agencies shall have assumed
and agreed to perform the duties of the Securities Administrator hereunder as
evidenced by a written instrument to such effect delivered to the Owner Trustee.
Upon delivery of such written instrument to the Owner Trustee, the Trust shall
promptly deliver to the successor Securities Administrator a written instrument
acknowledging and accepting the assignment of the resigning Securities
Administrator's rights hereunder to the successor Securities Administrator. Each
such successor Securities Administrator shall be deemed to be the Securities
Administrator for all purposes of this Indenture.
(b) If any of the following events shall occur and be continuing:
72
(i) The Securities Administrator shall violate any provision of
this Indenture and such default is not cured within ten days after notice
thereof is given to the Securities Administrator by the Owner Trustee,
[the Note Insurer, ]or the Indenture Trustee; or
(ii) A court having jurisdiction over the premises shall enter a
decree or order for relief in respect of the Securities Administrator in
an involuntary case under any applicable bankruptcy, insolvency, or other
similar law now or hereafter in effect, or appoint a receiver,
liquidation, assignee, custodian, trustee, sequestrator (or other similar
official) of the Securities Administrator or for any substantial part of
its property, or order the winding-up or liquidation of its affairs; or
(iii) The Securities Administrator shall commence a voluntary case
under any applicable bankruptcy, insolvency, or other similar law now or
hereafter in effect, or shall consent to the entry of an order for relief
in an involuntary case under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of the
Securities Administrator or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall
fail generally to pay its debts as they become due;
then in any such event the Securities Administrator may be terminated by the
Owner Trustee upon notice to the Securities Administrator; provided, however,
that the Securities Administrator shall nevertheless be entitled to any amounts
due to it pursuant to Section 11.05 accruing prior to the date of such
termination.
(c) Following receipt of instructions from [the Note Insurer] or the
Holders of the Notes, [with the prior consent of the Note Insurer,] and upon 30
days' written notice to the Securities Administrator, the Owner Trustee may
remove the Securities Administrator; provided, however, that the Securities
-------- -------
Administrator shall nevertheless be entitled to any amounts due to it pursuant
to Section 11.05 accruing prior to the date of such termination.
ARTICLE XII
MISCELLANEOUS
Section 12.01. Compliance Certificates and Opinions.
-------------------------------------
(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 an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and an Opinion of Counsel, if requested
by the Indenture Trustee, 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 relating to such
particular application or request, no additional certificate or opinion need be
furnished.
73
(b) Every certificate, opinion or letter with respect to compliance with
a condition or covenant provided for in this Indenture, including one furnished
pursuant to specific requirements of this Indenture relating to a particular
application or request (other than certificates provided pursuant to TIA Section
314(a)(4)) shall include and shall be deemed to include (regardless of whether
specifically stated therein) the following:
(i) statement that each individual signing such certificate,
opinion or letter has read such covenant or condition and the definitions
herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate, opinion or letter are based;
(iii) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 12.02. 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.
Any certificate or opinion 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
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's opinion and shall include a statement to the effect that such counsel
believes that such counsel and the Indenture Trustee may reasonably rely upon
the opinion of such other counsel.
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.
Wherever 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
74
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 Section 6.01(b)(2). Whenever in this
Indenture it is provided that the absence of the occurrence and continuation of
a Default or Event of Default is a condition precedent to the taking of any
action by the Indenture Trustee at the request or direction of the Issuer, then,
notwithstanding that the satisfaction of such condition is a condition precedent
to the Issuer's right to make such request or direction, the Indenture Trustee
shall be protected in acting in accordance with such request or direction if it
does not have knowledge of the occurrence and continuation of such Default or
Event of Default as provided in Section 6.01(d).
Section 12.03. 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
[or the Note Insurer] may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Noteholders in person
or by an agent duly appointed in writing [or the Note Insurer]; 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.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by [the Note Insurer in accordance with the provisions hereof
or] the Holders of any Notes shall bind the Holders of every Note issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Notes.
Section 12.04. Notices, etc. to Indenture Trustee[, the Note Insurer] and
----------------------------------------------------------
Issuer.
-------
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
75
shall be deemed to have been given if personally delivered at, telecopied to
(provided confirmation of such telecopy has been received), or mailed by
certified mail, return receipt requested, to:
(a) the Indenture Trustee at its Corporate Trust Office with a copy to the
Securities Administrator; or
(b) the Issuer, at [ ] Owner Trust [2001]-[ ], in care of [ ]
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: ________________________;
(c) the Note Insurer, at [ ];
(d) the Seller , at [ ] Attention: [ ];
(e) the Master Servicer at [ ] Attention: [ ];
(f) the Servicer at [ ] Attention: [ ];
(g) the Securities Administrator, at [ ], Attention: [ ]; or
(h) the Custodian, at [ ], Attention:[ ];
or in each case, at such other address as may be designated by written notice
to the other parties;
Notices required to be given to the Rating Agencies by the Issuer or the
Indenture Trustee shall be in writing, personally delivered or mailed
first-class postage pre-paid, to
(i) [in the case of Moody's, at the following address: Xxxxx'x
Investors Service, Inc., Residential Mortgage Monitoring Department, 00
Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000;]
(ii) [in the case of Standard & Poor's, at the following address:
Standard & Poor's Ratings Group, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
00000, Attention: Asset Backed Surveillance Department;] or]
(iii) [in the case of Fitch [ ];]
or as to each of the foregoing, at such other address as shall be designed
by written notice to the other parties.
Section 12.05. Notices and Reports to Noteholders; Waiver of Notices.
------------------------------------------------------
Where this Indenture provides for notice to Noteholders of any event or
the mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder 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 or the mailing
of such report, with a copy thereof sent by telecopy. In any case where a notice
or report to Noteholders is mailed and telecopied in the
76
manner provided above, neither the failure to mail and telecopy such notice or
report, nor any defect in any notice or report so mailed and telecopied, to any
particular Noteholder shall affect the sufficiency of such notice or report with
respect to other Noteholders, and any notice or report that is mailed and
telecopied in the manner herein provided shall be conclusively presumed to have
been duly given or provided.
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 waiver.
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.
Section 12.06. Rules by Indenture Trustee.
---------------------------
The Indenture Trustee may make reasonable rules for any meeting of
Noteholders.
Section 12.07. The Trust Indenture Act.
------------------------
If any provision hereof limits, qualifies or conflicts with any other
provision hereof that is required to be included in this Indenture by any of the
provisions of the TIA, such required provision shall control.
Section 12.08. Effect of Headings and Table of Contents; References.
-----------------------------------------------------
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof. References herein
to "Articles" and "Sections" without reference to a document are to designated
Articles and Sections of this Indenture.
Section 12.09. Successors and Assigns.
-----------------------
All covenants and agreements in this Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not.
Section 12.10. 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.
77
Section 12.11. Benefits of Indenture.
----------------------
Subject to Section 12.20 of this Indenture, nothing in this Indenture or
in the Notes, expressed or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, any separate trustee or
co-trustee appointed under Section 6.13, [the Note Insurer] and the Noteholders,
any benefit or any legal or equitable right, remedy or claim under this
Indenture.
Section 12.12. Legal Holidays.
---------------
In any case where the date of any Payment Date, Redemption Date or any
other date on which principal of or interest on any Note is proposed to be paid
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 nominal date of any such Payment Date, Redemption Date or other date for the
payment of principal of or interest on any Note and no interest shall accrue for
the period from and after any such nominal date, provided such payment is made
in full on such next succeeding Business Day.
Section 12.13. Governing Law.
--------------
IN VIEW OF THE FACT THAT NOTEHOLDERS MAY RESIDE IN MANY STATES AND OUTSIDE
THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE
WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF
A STATE HAVING A WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO
TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
Section 12.14. Counterparts.
-------------
This instrument 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 12.15. Debt Instruments.
-----------------
By its acceptance of any Note, each Noteholder will be deemed to have
agreed to treat its Note as a debt instrument for purposes of federal and state
income tax, franchise tax and any other tax measured in whole or in part by
income.
Section 12.16. 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
78
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 the Owner Trust Agreement.
Section 12.17. No Petition.
------------
The Indenture Trustee, by entering into this Indenture, and each
Noteholder and Beneficial Owner, by accepting a Note [and the Note Insurer],
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. In addition, the
Indenture Trustee will on behalf of the holders of the Notes, (a) file a written
objection to any motion or other proceeding seeking the substantive
consolidation of the Seller with the Depositor or the Issuer, (b) file an
appropriate memorandum of points and authorities or other brief in support of
such objection, or (c) endeavor to establish at the hearing on such objection
that the substantive consolidation of such entity would be materially
prejudicial to the Noteholders. This Section 12.17 will survive for one year and
one day following the termination of this Indenture.
Section 12.18. Inspection.
-----------
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee, [the Note Insurer] and any Noteholder
(provided that such Noteholder, together with its affiliates, owns 40% or more
of the then outstanding Note Balance), during the Issuer's normal business
hours, to examine all of 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 Accountants selected by the Indenture Trustee [or the
Note Insurer], as the case may be, and to discuss its affairs, finances and
accounts with its officers, employees and Independent Accountants (and by this
provision the Issuer hereby authorizes its Accountants to discuss with such
representatives such affairs, finances and accounts), all at such reasonable
times and as often as may be reasonably requested. Any expense incident to the
exercise by the Indenture Trustee of any right under this Section 12.18 shall be
borne by the Seller.
Section 12.19. Third Party Beneficiary.
------------------------
[The Note Insurer is intended as a third party beneficiary of this
Indenture and this Indenture shall be binding upon and inure to the benefit of
the Note Insurer; provided that,
79
notwithstanding the foregoing, for so long as a Note Insurer Default is
continuing with respect to its obligations under the Note Insurance Policy, the
Noteholders shall succeed to the Note Insurer's rights hereunder. Without
limiting the generality of the foregoing, all covenants and agreements in this
Indenture that expressly confer rights upon the Note Insurer shall be for the
benefit of and run directly to the Note Insurer, and the Note Insurer shall be
entitled to rely on and enforce such covenants to the same extent as if it were
a party to this Indenture.] The Depositor is an intended third-party beneficiary
of this Indenture for purposes of Section 8.02(b) hereof and Section 8.02(b)
shall be binding upon and inure to the benefit of the Depositor; and the
Depositor shall be entitled to rely on and enforce the covenants contained
therein for its benefit to the same extent as if it were a party to this
Indenture.
Section 12.20. Limitation of Liability.
------------------------
It is expressly understood and agreed by the parties hereto that (a) this
Agreement is executed and delivered by [ ], not individually or personally
but solely as trustee of [ ] Owner Trust [2001]-[ ] under the Owner Trust
Agreement in the exercise of the powers and authority conferred and vested in
it, (b) each of the representations, undertakings and agreements herein made on
the part of the Trust is made and intended not as personal representations,
undertakings and agreements by [ ] but is made and intended for the
purpose for binding only the Trust, (c) nothing herein contained shall be
construed as creating any liability on [ ], individually or
personally, to perform any covenant either expressed or implied contained
herein, all such liability, if any, being expressly waived by the parties hereto
and by an Person claiming by, through or under the parties hereto (d) under no
circumstances shall [ ] be personally liable for the payment of any
indebtedness or expenses of the Trust or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaken by the
Trust under this Agreement.
80
IN WITNESS WHEREOF, the Issuer, the Indenture Trustee, the Securities
Administrator and the Custodian have caused this Indenture to be duly executed
by their respective officers thereunto duly authorized, all as of the day and
year first above written.
[ ]OWNER TRUST [2001]-[ ]
By: [ ], not in its individual capacity,
but solely as Owner Trustee
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
[ ],
as Indenture Trustee[, Securities Administrator and
Custodian]
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
81
SCHEDULE I
ASSET SCHEDULE
EXHIBIT A
FORM OF CLASS A NOTE
[ ] OWNER TRUST [2001]-1
ASSET-BACKED NOTES, SERIES [2001]-[ ], CLASS A
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE 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 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 SUBJECT TO PREPAYMENT FROM TIME TO TIME WITHOUT
SURRENDER OF OR NOTATION ON THIS NOTE. ACCORDINGLY, THE OUTSTANDING PRINCIPAL
AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE
HEREOF. ANYONE ACQUIRING THIS NOTE MAY ASCERTAIN ITS CURRENT NOTE PRINCIPAL
BALANCE BY INQUIRY OF THE INDENTURE TRUSTEE.
A-1
No. _______________ $____________
[ ] OWNER TRUST [2001]-[ ]
ASSET-BACKED NOTES, SERIES [2001]-[ ],
[ ]% CLASS A
DUE [ ]
CUSIP NO.
[ ] Owner Trust [2001]-[ ], a business trust organized and existing under
the laws of the State of Delaware (herein referred to as the "Issuer"), for
value received, hereby promises to pay to
or registered assigns, the principal sum of ___________________________________
____________________________________ DOLLARS ($_____________) payable pursuant
to the Indenture (the "Indenture") dated as of [ ], among the
Issuer and [ ], a national banking association, as Indenture
Trustee (the "Indenture Trustee") [and as Securities Administrator and
Custodian.] Capitalized terms used but not defined herein are defined in Article
I of the Indenture.
THIS NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE [AND THE NOTE INSURANCE
POLICY REFERRED TO BELOW], AS PROVIDED IN THE INDENTURE. THE ISSUER IS NOT
OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE. EACH HOLDER AND
BENEFICIAL OWNER HEREOF, BY ITS ACCEPTANCE OF THIS NOTE, AGREES THAT SUCH HOLDER
OR BENEFICIAL OWNER SHALL HAVE NO RECOURSE TO THE ISSUER, THE OWNER TRUSTEE, THE
INDENTURE TRUSTEE, THE DEPOSITOR, THE SELLER, THE SERVICER, THE MASTER SERVICER
OR ANY OF THEIR RESPECTIVE AFFILIATES, OR TO THE ASSETS OF ANY OF THE FOREGOING
ENTITIES, EXCEPT THE ASSETS OF THE ISSUER PLEDGED TO SECURE THE NOTES PURSUANT
TO THE INDENTURE.
Pursuant to the terms of the Indenture, payments will be made on the 25th day of
each month or, if such day is not a Business Day, on the Business Day
immediately following such 25th day (each a "Payment Date"), commencing on the
first Payment Date specified above, to the Person in whose name this Note is
registered at the close of business on the applicable Record Date, in an amount
equal to the product of (a) the Percentage Interest evidenced by this Note and
(b) the sum of the amounts to be paid on the Notes with respect to such Payment
Date, all as more specifically set forth in the Indenture.
So long as this Note is registered in the name of a Clearing Agency or its
nominee, the Indenture Trustee will make payments of principal of and interest
on this Note by wire transfers of immediately available funds to the Clearing
Agency or its nominee. Notwithstanding the above, the final distribution on this
Note will be made after due notice by the Indenture Trustee of the pendency of
such distribution and only upon presentation and surrender of this Note at its
A-2
Corporate Trust Office or such other offices or agencies appointed by the
Indenture Trustee for that purpose and such other locations provided in the
Indenture.
On each Payment Date, the Noteholders will be entitled to receive interest
payments in an aggregate amount equal to the Note Interest for such Payment
Date, together with principal payments in an aggregate amount equal to the
Monthly Principal, plus, until the related Overcollateralization Amount is equal
to the Required Overcollateralization Amount, Excess Cash, if any, for such
Payment Date. The "Note Balance" of a Note as of any date of determination is
equal to the initial principal balance thereof as of the Closing Date, reduced
by the aggregate of all amounts previously paid with respect to such Note on
account of principal.
This Note is one of a duly authorized issue of Notes of the Issuer, designated
as its Asset-Backed Notes, Series [2001]-[ ] (herein called the "Notes"), 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. To the extent that any provision of this Note contradicts or is
inconsistent with the provisions of the Indenture, the provisions of the
Indenture shall control and supersede such contradictory or inconsistent
provision herein. The Notes are subject to all terms of the Indenture. Each
Noteholder or Beneficial Owner, by acceptance of a Note, or in the case of a
Beneficial Owner, a beneficial interest in a Note, covenants and agrees to be
bound by all the terms and provisions of the Indenture.
As described above, the entire unpaid principal amount of this Note shall be due
and payable on the earlier of the Stated Maturity Date and the Redemption Date,
if any, pursuant to Article X of the Indenture. Notwithstanding the foregoing,
the entire unpaid principal amount of the Notes shall be due and payable on the
date on which an Event of Default shall have occurred and be continuing if the
Indenture Trustee[, at the direction or upon the prior written consent of [ ]
(the "Note Insurer") in the absence of a Note Insurer Default,] or the Holders
of the Notes representing not less than 50% of the Note Balance of the
Outstanding Notes [(with the prior written consent of the Note Insurer in the
absence of a Note Insurer Default),] shall have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Notes shall be made pro rata to the
Noteholders entitled thereto.
[[ ] (the "Note Insurer"), in consideration of the payment of the premium
and subject to the terms of the financial guaranty insurance policy (the "Note
Insurance Policy") issued thereby, has unconditionally and irrevocably
guaranteed the payment of the Insured Payments.]
[Pursuant to the Indenture, unless a Note Insurer Default exists (i) the Note
Insurer shall be deemed to be the holder of the Notes for certain purposes
specified in the Indenture and will be entitled to exercise all rights of the
Noteholders thereunder, including the rights of Noteholders relating to the
occurrence of, and the remedies with respect to, an Event of Default, without
the consent of such Noteholders, and (ii) the Indenture Trustee may take actions
which would otherwise be at its option or within its discretion, including
actions relating to the occurrence of, and the remedies with respect to, an
Event of Default, only at the direction of the Note Insurer. In addition, on
each Payment Date, after the Noteholders have been paid all amounts to which
they are entitled, the Note Insurer will be entitled to be reimbursed for any
unreimbursed Insured
A-3
Payments, unreimbursed Premium Amounts (each with interest thereon at the "Late
Payment Rate" specified in the Insurance Agreement) and any other amounts owed
under the Note Insurance Policy.]
As provided in the Indenture, the Notes may be redeemed in whole, but not in
part, at the option of the holder(s) of a majority of the ownership interest of
the Issuer or, if not so redeemed, [at the option of the Note Insurer,] on any
Payment Date on and after the date on which the Note Balance is equal to or less
than 5% of the Original Note Balance.
Subject to the terms of the Indenture, the Notes will be registered as one or
more certificates held by a Clearing Agency or its nominee and beneficial
interests will be held by Beneficial Owners through the book-entry facilities of
such Clearing Agency or its nominee in minimum denominations of $1,000 and
increments of $1 in excess thereof.
As provided in the Indenture and subject to any limitations on transfer of this
Note by a Clearing Agency or its nominee and certain limitations set forth in
the Indenture, the transfer of this Note is registrable on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, 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, and thereupon one or more new Notes of authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees.
Each Noteholder or Beneficial Owner, by acceptance of this Note or, in the case
of a Beneficial Owner, 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 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 Noteholder or Beneficial Owner, by acceptance of this Note or, in the case
of a Beneficial Owner, a beneficial interest in this Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Beneficial
Owner will not at any time institute against the Seller, the Depositor or the
Issuer, or join in any institution against the Seller, the Depositor 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, the Asset Sale Agreement, the Owner Trust Agreement, the Master
Servicing Agreement, the Servicing Agreement, the Insurance Agreement and the
Indemnification Agreement (the "Basic Documents").
A-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
secured by the Trust Estate. Each Noteholder, by acceptance of this Note (and
each Beneficial Owner by acceptance of a beneficial interest in this 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, [the Note Insurer] and any agent of the Issuer or
the Indenture Trustee may treat the Person in whose name this Note (as of the
day of determination or as of such other date as may be specified in the
Indenture) is registered as the owner hereof for all purposes, whether or not
this Note be overdue, and none of the Issuer, the Indenture Trustee, [the Note
Insurer] 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 rights of the Holders of the Notes under the Indenture at any
time by the Issuer [with the consent of the Note Insurer] and the Holders of
Notes representing a majority of the Note Balance of all Outstanding Notes. The
Indenture also contains provisions permitting the [(i) Note Insurer or (ii) if a
Note Insurer Default exists,] the Holders of Notes representing specified
percentages of the Note Balance of Outstanding 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 Note Insurer or] by the Holder
of this Note (or any one or 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 amendment thereof, in certain limited
circumstances, or the waiver of certain terms and conditions set forth in the
Indenture, without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the Issuer
under the Indenture.
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.
A-5
Unless the certificate of authentication hereon has been executed by the
Authenticating Agent 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. IN WITNESS WHEREOF,
the Issuer has caused this Instrument to be signed, manually or in facsimile, by
its Authorized Officer, as of the date set forth below.
DATE: __, [ ] [ ] OWNER TRUST 2001-[ ]
By: [ ],
not in its individual capacity but solely
as Owner Trustee under the Owner Trust
Agreement
By:
------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes designated above and referred to in the
within-mentioned Indenture.
Date: __, [ ] [ ]
, Authenticating Agent
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 transfers 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: _________________*/
A-6
Signature Guaranteed:
__________________*/
*/ 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.
A-7
[ATTACH STATEMENT OF INSURANCE]
A-8
EXHIBIT B
ASSET SALE AGREEMENT
EXHIBIT C
CUSTODIAL AGREEMENT
C-1
