EXECUTION
INDENTURE
between
ACE SECURITIES CORP. HOME LOAN TRUST 1999-A,
as Issuer
and
FIRST UNION NATIONAL BANK
as Indenture Trustee
Dated as of August 1, 1999
ACE SECURITIES CORP. HOME LOAN TRUST 1999-A
Asset Backed Notes, Series 1999-A
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
Section 1.01. Definitions....................................................2
Section 1.02. Incorporation by Reference of Trust Indenture Act..............6
Section 1.03. Rules of Construction..........................................7
ARTICLE II
THE NOTES
Section 2.01. Form...........................................................7
Section 2.02. Execution, Authentication, Delivery and Dating.................8
Section 2.03. Registration; Registration of Transfer and Exchange............8
Section 2.04. Mutilated, Destroyed, Lost or Stolen Notes.....................9
Section 2.05. Persons Deemed Note Owners....................................10
Section 2.06. Payment of Principal and Interest; Defaulted Interest.........11
Section 2.07. Cancellation..................................................11
Section 2.08. Conditions Precedent to the Authentication of the Notes.......12
Section 2.09. Release of Collateral.........................................14
Section 2.10. Book-Entry Notes..............................................14
Section 2.11. Notices to Clearing Agency....................................15
Section 2.12. Definitive Notes..............................................15
Section 2.13. Tax Treatment.................................................16
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal and Interest.............................16
Section 3.02. Maintenance of Office or Agency...............................16
Section 3.03. Money for Payments to Be Held in Trust........................17
Section 3.04. Existence.....................................................18
Section 3.05. Protection of Collateral......................................19
Section 3.06. Annual Opinions as to Collateral..............................19
Section 3.07. Performance of Obligations; Servicing of Home Loans...........19
Section 3.08. Negative Covenants............................................21
Section 3.09. Annual Statement as to Compliance.............................22
Section 3.10. Covenants of the Issuer.......................................22
Section 3.11. Servicer's Obligations........................................22
Section 3.12. Restricted Payments...........................................22
Section 3.13. Issuer May Consolidate, etc., Only on Certain Terms...........23
Section 3.14. Successor or Transferee.......................................24
Section 3.15. Treatment of Notes as Debt for Tax Purposes...................25
Section 3.16. Notice of Events of Default...................................25
Section 3.17. Further Instruments and Acts..................................25
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.......................25
Section 4.02. Application of Trust Money....................................26
Section 4.03. Repayment of Moneys Held by Paying Agent......................26
ARTICLE V
REMEDIES
Section 5.01. Events of Default.............................................27
Section 5.02. Acceleration of Maturity; Rescission and Annulment............28
Section 5.03. Collection of Indebtedness and Suits for Enforcement
by Indenture Trustee................. ........................29
Section 5.04. Remedies; Priorities..........................................31
Section 5.05. Optional Preservation of the Collateral.......................32
Section 5.06. Limitation of Suits...........................................33
Section 5.07. Unconditional Rights of Noteholders to Receive
Principal and Interest..................... ..................33
Section 5.08. Restoration of Rights and Remedies............................34
Section 5.09. Rights and Remedies Cumulative................................34
Section 5.10. Delay or Omission Not a Waiver................................34
Section 5.11. Control by Noteholders........................................34
Section 5.12. Waiver of Past Defaults.......................................35
Section 5.13. Undertaking for Costs.........................................35
Section 5.14. Waiver of Stay or Extension Laws..............................35
Section 5.15. Action on Notes...............................................36
Section 5.16. Performance and Enforcement of Certain Obligations............36
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee...................................36
Section 6.02. Rights of Indenture Trustee...................................38
Section 6.03. Individual Rights of Indenture Trustee........................38
Section 6.04. Indenture Trustee's Disclaimer................................39
Section 6.05. Notices of Default............................................39
Section 6.06. Reports by Indenture Trustee to Holders.......................39
Section 6.07. Compensation and Indemnity....................................39
Section 6.08. Replacement of Indenture Trustee..............................40
Section 6.09. Successor Indenture Trustee by Merger.........................41
Section 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee......................... ...................41
Section 6.11. Eligibility; Disqualification.................................42
Section 6.12. Preferential Collection of Claims Against Issuer..............42
Section 6.13. Appointment of Agent..........................................42
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS'
Section 7.01. Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders.................... .................43
Section 7.02. Preservation of Information; Communications
to Noteholders........ .......................................43
Section 7.03. Reports by Issuer.............................................43
Section 7.04. Reports by Indenture Trustee..................................44
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money...........................................44
Section 8.02. Trust Accounts; Distributions.................................45
Section 8.03. General Provisions Regarding Accounts.........................45
Section 8.04. Servicer's Monthly Statements.................................46
Section 8.05. Release of Collateral.........................................46
Section 8.06. Opinion of Counsel............................................46
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent
of Noteholders.................................... ...........46
Section 9.02. Supplemental Indentures with Consent of Noteholders...........48
Section 9.03. Execution of Supplemental Indentures..........................49
Section 9.04. Effect of Supplemental Indentures.............................49
Section 9.05. Conformity with Trust Indenture Act...........................50
Section 9.06. Reference in Notes to Supplemental Indentures.................50
Section 9.07. Amendments to Trust Agreement.................................50
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption...................................................50
Section 10.02. Form of Redemption Notice....................................51
Section 10.03. Notes Payable on Redemption Date; Provision for
Payment of Indenture Trustee and Note Insurer. ..............51
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc....................51
Section 11.02. Form of Documents Delivered to Indenture Trustee.............53
Section 11.03. Acts of Noteholders..........................................53
Section 11.04. Notices, etc., to Indenture Trustee, Issuer, Rating
Agencies and Note Insurer............ .......................54
Section 11.05. Notices to Noteholders; Waiver...............................54
Section 11.06. Conflict with Trust Indenture Act............................55
Section 11.07. Effect of Headings and Table of Contents.....................55
Section 11.08. Successors and Assigns.......................................55
Section 11.09. Separability.................................................55
Section 11.10. Benefits of Indenture........................................55
Section 11.11. Legal Holidays...............................................56
Section 11.12. GOVERNING LAW................................................56
Section 11.13. Counterparts.................................................56
Section 11.14. Recording of Indenture.......................................56
Section 11.15. Trust Obligation.............................................56
Section 11.16. No Petition..................................................57
Section 11.17. Inspection...................................................57
Section 11.18. Grant of Noteholder Rights to Note Insurer...................57
Section 11.19. Third Party Beneficiary......................................57
Section 11.20. Suspension and Termination of Note Insurer's Rights..........57
Exhibits
EXHIBIT A Form of Notes
This Indenture dated as of August 1, 1999, between ACE SECURITIES
CORP. HOME LOAN TRUST 1999-A, a Delaware business trust, as Issuer (the
"Issuer"), and First Union National Bank, as Indenture Trustee (the "Indenture
Trustee"),
W I T N E S S E T H T H AT:
In consideration of the mutual covenants herein contained, the Issuer
and the Indenture Trustee hereby agree as follows for the benefit of each of
them and for the equal and ratable benefit of the holders of the Notes:
GRANTING CLAUSE
Subject to the terms of this Indenture, the Issuer hereby Grants on
the Closing Date to the Indenture Trustee, as Indenture Trustee for the
benefit of the Holders of the Notes and the Note Insurer, all of the Issuer's
right, title and interest in and to: (i) the Trust Estate (as defined in the
Sale and Servicing Agreement); (ii) the Issuer's rights and benefits but none
of its obligations under the Sale and Servicing Agreement (including the
Issuer's right to cause the Seller to repurchase Home Loans from the Issuer
under certain circumstances described therein); (iii) the Trust Accounts, all
amounts and property in the Trust Accounts from time to time, and the Security
Entitlements to all Financial Assets credited to the Trust Accounts from time
to time; and (iv) the Issuer's rights and benefits but none of its obligations
under the Custodial Agreement, (v) the Issuer's rights and benefits but none
of its obligations under the Administration Agreement; (vi) the Issuer's
rights and benefits but none of its obligations under the Home Loan Sale
Agreement, (vii) all other property of the Trust from time to time and (viii)
all present and future claims, demands, causes of action and choses in action
in respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks,
deposit accounts, insurance proceeds, condemnation awards, rights to payment
of any and every kind and other forms of obligations and receivables,
instruments and other property which at any time constitute all or part of or
are included in the proceeds of any of the foregoing (collectively, the
"Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, and to secure compliance with the provisions of this Indenture, all as
provided in this Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Holders
of the Notes and the Note Insurer, acknowledges such Grant, accepts the trusts
hereunder and agrees to perform the duties required of it in this Indenture to
the best of its ability to the end that the interests of the Holders of the
Notes and the Note Insurer may adequately and effectively be protected. The
Indenture Trustee agrees and acknowledges that the Indenture Trustee's Loan
Files will be held by the Custodian for the benefit of the Indenture Trustee
in Minneapolis, Minnesota. The Indenture Trustee further agrees and
acknowledges that each other item of Collateral that is physically delivered
to the Indenture Trustee will be held by the Indenture Trustee in Minneapolis,
Minnesota.
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. (a) Except as otherwise specified herein
or as the context may otherwise require, the following terms have the
respective meanings set forth below for all purposes of this Indenture.
Act: The meaning specified in Section 11.03(a) hereof.
Administration Agreement: The Administration Agreement dated as of
August 1, 1999 between the Issuer and Bankers Trust Company, as administrator.
Administrator: Bankers Trust Company, or any successor thereto.
Authorized Officer: With respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters
relating to the Issuer and who is identified on the list of Authorized
Officers delivered by the Owner Trustee to the Indenture Trustee and the Note
Insurer on the Closing Date (as such list may be modified or supplemented from
time to time thereafter) and, so long as the Administration Agreement is in
effect, any officer of the Administrator who is authorized to act for the
Administrator in matters relating to the Issuer and to be acted upon by the
Administrator pursuant to the Administration Agreement and who is identified
on the list of Authorized Officers delivered by the Administrator to the
Indenture Trustee and the Note Insurer on the Closing Date (as such list may
be modified or supplemented from time to time thereafter).
Book-Entry Notes: A beneficial interest in any Class of Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.10 hereof.
Certificate of Trust: The certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for which from time to time a Clearing Agency
effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Collateral: The meaning specified in the Granting Clause of this
Indenture.
Corporate Trust Office: The principal office of the Indenture Trustee
at which at any particular time its corporate trust business shall be
administered, which office at date of execution of this Agreement is located
at 230 South Tryon Street, 9th Floor, Charlotte, North Carolina 28288-1179;
Attention: Structured Finance Trust Group, or at such other address as the
Indenture Trustee may designate from time to time by notice to the
Noteholders, the Note Insurer and the Issuer, or the principal corporate trust
office of any successor Indenture Trustee at the address designated by such
successor Indenture Trustee by notice to the Noteholders, the Note Insurer and
the Issuer.
Default: Any occurrence that is, or with notice or the lapse of time
or both would become, an Event of Default.
Definitive Notes: The meaning specified in Section 2.12 hereof.
Depository Institution: Any depository institution or trust company,
including the Indenture Trustee, that (a) is incorporated under the laws of
the United States of America or any State thereof, (b) is subject to
supervision and examination by federal or state banking authorities and (c)
has outstanding unsecured commercial paper or other short-term unsecured debt
obligations that are rated in the highest rating category by each Rating
Agency, or is otherwise acceptable to each Rating Agency.
Event of Default: The meaning specified in Section 5.01 hereof.
Executive Officer: With respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer,
President, Executive Vice President, any Vice President, the Secretary or the
Treasurer of such corporation; and with respect to any partnership, any
general partner thereof.
Grant: Mortgage, pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create and grant a lien upon and a security
interest in and right of set-off against, deposit, set over and confirm
pursuant to this Indenture. A Grant of the Collateral or of any other
agreement or instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including the immediate
and continuing right to claim for, collect, receive and give receipt for
principal and interest payments in respect of the Collateral and all other
moneys payable thereunder, 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.
Highest Priority Class Notes: The Class A Notes.
Holder or Noteholder: The Person in whose name a Note is registered
on the Note Register.
Independent: When used with respect to any specified Person, that the
Person (a) is in fact independent of the Issuer, any other obligor on the
Notes, the Seller and any Affiliate of any of the foregoing Persons, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any
such other obligor, the Seller or any Affiliate of any of the foregoing
Persons as an officer, employee, promoter, underwriter, trustee, partner,
director or person performing similar functions.
Independent Certificate: A certificate or opinion to be delivered to
the Indenture Trustee and the Note Insurer under the circumstances described
in, and otherwise complying with, the applicable requirements of Section 11.01
hereof, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee and the Note Insurer in the
exercise of reasonable care, and such opinion or certificate shall state that
the signer has read the definition of "Independent" in this Indenture and that
the signer is Independent within the meaning thereof.
Issuer: ACE Securities Corp. Home Loan Trust 1999-A until a successor
replaces it and, thereafter, means the successor and, for purposes of any
provision contained herein and required by the TIA, each other obligor on the
Notes.
Issuer Order and Issuer Request: A written order or request signed in
the name of the Issuer by any one of its Authorized Officers and delivered to
the Indenture Trustee.
Majority Highest Priority Class Noteholders: On any date, Holders of
Highest Priority Class Notes representing more than 50% of the Voting
Interests of the Highest Priority Class Notes then Outstanding.
Maturity Date: July 20, 2028.
Non-Priority Class: As of any date of determination, any outstanding
Class of Notes other than the Highest Priority Class Notes.
Note Depository Agreement: The agreement to be entered into among the
Issuer, the Administrator, the Indenture Trustee and The Depository Trust
Company, as the initial Clearing Agency, relating to the Book-Entry Notes.
Note Owner: With respect to a Book-Entry Note, the Person that is the
beneficial owner of such Book-Entry Note, as reflected on the books of the
Clearing Agency or on the books of a Person maintaining an account with such
Clearing Agency (directly as a Clearing Agency Participant or as an indirect
participant, in each case in accordance with the rules of such Clearing
Agency), and with respect to a Definitive Note, the Person that is the
beneficial owner of such Note as reflected in the Note Register.
Note Register and Note Registrar: The respective meanings specified
in Section 2.03 hereof. The initial Note Registrar shall be Bankers Trust
Company.
Officer's Certificate: A certificate signed by any Authorized Officer
of the Issuer or the Administrator, under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.01 hereof,
and delivered to the Indenture Trustee. Unless otherwise specified, any
reference in this Indenture to an Officer's Certificate shall be to an
Officer's Certificate of any Authorized Officer of the Issuer or the
Administrator.
Opinion of Counsel: One or more written opinions of counsel who may,
except as otherwise expressly provided in this Indenture, be an employee of or
counsel to the Issuer and who shall be satisfactory to the Indenture Trustee
and the Note Insurer, and which opinion or opinions shall be addressed to the
Indenture Trustee, as Indenture Trustee, and the Note Insurer and shall comply
with any applicable requirements of Section 11.01 hereof and shall be in form
and substance satisfactory to the Indenture Trustee and the Note Insurer.
Outstanding: With respect to any Note and as of the date of
determination, any Note theretofore authenticated and delivered under this
Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the
necessary amount has theretofore been deposited with the Indenture
Trustee or any Paying Agent 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
for such notice satisfactory to the Indenture Trustee has been made);
(iii) 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; provided, however, that in determining
whether the Holders of the requisite Voting Interests of the Outstanding
Notes have given any request, demand, authorization, direction, notice,
consent or waiver hereunder or under any Basic Document, Notes owned by
the Issuer, any other obligor upon the Notes, the Seller or any Affiliate
of any of the foregoing Persons 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 owned in such manner shall be disregarded.
Notes owned in such manner that have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of
the Indenture Trustee that the pledgee has the right so to act with
respect to such Notes and that the pledgee is not the Issuer, any other
obligor upon the Notes, the Seller or any Affiliate of any of the
foregoing Persons; and
(iv) Notes for which the related Maturity Date has occurred.
Outstanding Amount: The aggregate principal amount of all Notes, or
Class of Notes, as applicable, Outstanding at the date of determination.
Paying Agent: The Indenture Trustee or any other Person that meets
the eligibility standards for the Indenture Trustee specified in Section 6.11
hereof and is authorized by the Issuer to make payments to and distributions
from the Note Distribution Account, including payments of principal of or
interest on the Notes on behalf of the Issuer. The initial Paying Agent shall
be Bankers Trust Company.
Predecessor Note: 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 2.04 hereof in lieu of a mutilated,
lost, destroyed or stolen Note shall be deemed to evidence the same debt as
the mutilated, lost, destroyed or stolen Note.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Rating Agency Condition: With respect to any action to which a Rating
Agency Condition applies, that each Rating Agency shall have been given 10
days' (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each of the Rating Agencies shall have notified the
Depositor, the Servicer, the Note Insurer and the Issuer in writing that such
action will not result in a reduction or withdrawal of the then current rating
of the Notes.
Redemption Date: In the case of a redemption of the Notes pursuant to
Section 10.01 hereof, the Distribution Date specified by the Indenture Trustee
pursuant to such Section 10.01.
Registered Holder: The Person in whose name a Note is registered on
the Note Register on the applicable Record Date.
Sale and Servicing Agreement: The Sale and Servicing Agreement dated
as of August 1, 1999, among the Issuer, the Depositor, the Servicer, and the
Indenture Trustee.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939 as in
force on the date hereof, unless otherwise specifically provided.
Voting Interests: With respect to any Class of Notes, the percentage
equal to the product of (i) 100% and (ii) a fraction, the numerator of which
is equal to the Class Principal Amount of such Class of Notes and the
denominator of which is equal to the aggregate Class Principal Amount of all
Classes of Notes Outstanding.
(b) Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein
have the respective meanings set forth in the Sale and Servicing Agreement for
all purposes of this Indenture.
Section 1.02. Incorporation by Reference of Trust Indenture Act.
(a) Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
(b) All other TIA terms used in this Indenture that are defined in
the TIA, defined by TIA reference to another statute or defined by rule of the
Securities and Exchange Commission have the respective meanings assigned to
them by such definitions.
Section 1.03. Rules of Construction. Unless the context otherwise
requires:
(a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles as in effect
in the United States from time to time;
(c) "or" is not exclusive;
(d) "including" means including without limitation;
(e) words in the singular include the plural and words in the plural
include the singular; and
(f) any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented (as provided in such agreements) and includes (in the
case of agreements or instruments) references to all attachments thereto and
instruments incorporated therein; references to a Person are also to its
permitted successors and assigns.
ARTICLE II
THE NOTES
Section 2.01. Form. The Notes shall be designated as the "ACE
Securities Corp. Home Loan Trust 1999-A Asset Backed Notes, Series 1999-A."
Each Class of Notes shall be in substantially the form set forth in Exhibit A
hereto, with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by
the officers executing such Notes, as evidenced by their execution thereof.
Any portion of the text of any Note may be set forth on the reverse thereof,
with an appropriate reference thereto on the face of the Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods, all as determined by the
officers executing such Notes, as evidenced by their execution of such Notes.
Each Note shall be dated the date of its authentication. The terms of
the Notes are set forth in Exhibit A hereto. The terms of each Class of Notes
are part of the terms of this Indenture.
Section 2.02. Execution, Authentication, Delivery and Dating. The
Notes shall be executed on behalf of the Issuer by an Authorized Officer of
the Owner Trustee or the Administrator. The signature of any such Authorized
Officer on the Notes may be manual or facsimile. Notes bearing the manual or
facsimile signature of individuals who were at any time Authorized Officers of
the Owner Trustee or the Administrator shall bind the Issuer, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Notes or did not hold such offices at
the date of such Notes. Subject to the satisfaction of the conditions set
forth in Section 2.08 hereof, the Indenture Trustee shall, upon Issuer Order,
authenticate and deliver the Notes for original issue in the aggregate
principal amounts with respect to each Class as specified below:
Class Class Principal Amount
----- ----------------------
A $372,062,000.00
The aggregate principal amounts of such Classes of Notes outstanding
at any time may not exceed such respective amounts.
The Notes that are authenticated and delivered by the Indenture
Trustee to or upon the order of the Issuer on the Closing Date shall be dated
the Closing Date. All other Notes that are authenticated after the Closing
Date for any other purpose under the Indenture shall be dated the date of
their authentication. The Notes shall be issuable as registered Notes in the
minimum denomination of $100,000 and integral multiples of $1 in excess
thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee or the Note Registrar by the manual
signature of one of its authorized signatories, and such certificate upon any
Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder.
Section 2.03. 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. Bankers Trust Company initially shall be the "Note Registrar" for the
purpose of registering Notes and transfers of Notes as herein provided. Upon
any resignation of any Note Registrar, the Issuer shall promptly appoint a
successor or, if it elects not to make such an appointment, assume the duties
of Note Registrar.
If a Person other than the Indenture Trustee or Bankers Trust Company
is appointed by the Issuer as Note Registrar, the Issuer will give the
Indenture Trustee and the Note Insurer prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Register, and the Indenture Trustee and the Note Insurer
shall have the right to inspect the Note Register at all reasonable times and
to obtain copies thereof, and the Indenture Trustee and the Note Insurer shall
have the right to rely upon a certificate executed on behalf of the Note
Registrar by an Executive Officer thereof as to the names and addresses of the
Holders of the Notes and the principal amounts (or notional amounts) and
number of such Notes.
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 hereof,
the Issuer shall execute, and the Indenture Trustee or the Certificate
Registrar shall authenticate and the Noteholder shall be entitled to obtain
from the Indenture Trustee or the Certificate Registrar, in the name of the
designated transferee or transferees, one or more new Notes of the same Class
in any authorized denominations, of a like aggregate principal amount (or
notional amount).
At the option of the Holder, Notes may be exchanged for other Notes
of the same Class in any authorized denominations, of a like aggregate
principal amount (or notional amount), upon surrender of the Notes to be
exchanged at such office or agency. Whenever any Notes are so surrendered for
exchange, the Issuer shall execute, and the Indenture Trustee or the
Certificate Registrar shall authenticate and the Noteholder shall be entitled
to obtain from the Indenture Trustee or the Certificate Registrar, the Notes
which 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 by, or be accompanied by a written instrument
of transfer in form satisfactory to the Indenture Trustee duly executed by,
the Holder thereof or such Holder's attorney duly authorized in writing, with
such signature guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in the Securities Transfer Agents' Medallion Program ("STAMP")
or such other "signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Exchange Act.
No service charge shall be made to a Holder or the Note Insurer for
any registration of transfer or exchange of Notes, but the Issuer may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any registration of transfer or exchange of
Notes, other than exchanges pursuant to Sections 2.04 and 9.06 hereof not
involving any transfer.
The preceding provisions of this Section notwithstanding, the Issuer
shall not be required to make, and the Note Registrar need not register,
transfers or exchanges of Notes selected for redemption or of any Note for a
period of 15 days preceding the due date for any payment with respect to such
Note.
Section 2.04. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture
Trustee receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee and
the Note Insurer such security or indemnity as may reasonably be required by
it to hold the Issuer, the Note Insurer and the Indenture Trustee harmless,
then, in the absence of notice to the Issuer, the Note Registrar, the Note
Insurer or the Indenture Trustee that such Note has been acquired by a bona
fide purchaser, an Authorized Officer of the Owner Trustee or the
Administrator on behalf of the Issuer shall execute, and upon its request the
Indenture Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note of
the same Class; provided, however, that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall
be due and payable, or shall have been called for redemption, instead of
issuing a replacement Note, the Issuer may pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the
Issuer, the Note Insurer and the Indenture Trustee shall be entitled to
recover such replacement Note (or such payment) from the Person to whom it was
delivered or any Person taking such replacement Note from such Person to whom
such replacement Note was delivered or any assignee of such Person, except a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer, the Note Insurer or the Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section, the
Issuer may require the payment by the Holder of such Note, other than the Note
Insurer, of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Indenture Trustee) connected
therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section 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 2.05. Persons Deemed Note Owners. Prior to due presentment
for registration of transfer of any Note, the Issuer, the Note Insurer, the
Indenture Trustee and any agent of the Issuer, the Note Insurer or the
Indenture Trustee may treat the Person in whose name any Note is registered
(as of the day of determination) as the Note Owner for the purpose of
receiving payments of principal of and interest, if any, on such Note and for
all other purposes whatsoever, whether or not such Note be overdue, and none
of the Issuer, the Note Insurer the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 2.06. Payment of Principal and Interest; Defaulted Interest.
(a) Each Class of Notes shall accrue interest at the related Interest Rate,
and such interest shall be payable on each Distribution Date as specified in
Exhibit A hereto, subject to Section 3.01 hereof. With respect to each
outstanding Class of LIBOR Securities, if any, the Indenture Trustee shall
determine LIBOR for each applicable Accrual Period on the second London
Business Day prior thereto. All interest payments on each Class of Notes shall
be made pro rata to the Noteholders of such Class entitled thereto. Any
installment of interest or principal, if any, payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one
or more Predecessor Notes) is registered on the Record Date (or, in the case
of payment of Deferred Amounts, to the Person in whose name such Note was most
recently registered, if such Note has previously been surrendered to the
Indenture Trustee for final payment) by check mailed first-class postage
prepaid to such Person's address as it appears on the Note Register on such
Record Date, except that, unless Definitive Notes have been issued pursuant to
Section 2.12 hereof, with respect to Notes registered on the Record Date in
the name of the nominee of the Clearing Agency (initially, such nominee to be
Cede & Co.), payment will be made by wire transfer in immediately available
funds to the account designated by such nominee and except for the final
installment of principal payable with respect to such Note on a Distribution
Date or on the applicable Maturity Date for such Class of Notes (and except
for the Termination Price for any Note called for redemption pursuant to
Section 10.01) hereof, which shall be payable as provided below. The funds
represented by any such checks returned undelivered shall be held in
accordance with Section 3.03 hereof.
(b) The principal of each Note shall be payable in installments on
each Distribution Date as provided in the forms of the Notes set forth in
Exhibit A hereto. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes together with the amount of any Deferred Amounts in
respect thereof of a Class of Notes shall be due and payable, if not
previously paid, on the earlier of (i) the applicable Maturity Date, (ii) the
Redemption Date or (iii) the date on which an Event of Default shall have
occurred and be continuing, if the Indenture Trustee or the Majority Highest
Priority Class Noteholders shall have declared the Notes to be immediately due
and payable in the manner provided in Section 5.02 hereof.
All principal payments on each Class of Notes shall be made pro rata
to the Noteholders of such Class entitled thereto. The Indenture Trustee shall
notify the Person in whose name a Note is registered at the close of business
on the Record Date preceding the Distribution Date on which the Issuer expects
that the final installment of principal of and interest on such Note will be
paid. Such notice shall be mailed or transmitted by facsimile prior to such
final Distribution Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify
the place where such Note may be presented and surrendered for payment of such
installment. 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 as provided in Section 10.02 hereof.
Section 2.07. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall promptly be cancelled by the Indenture Trustee. The Issuer may at
any time deliver to the Indenture Trustee for cancellation any Notes
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall promptly
be cancelled by the Indenture Trustee. 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 canceled Notes may be held or
disposed of by the Indenture Trustee in accordance with its standard retention
or disposal policy as in effect at the time unless the Issuer shall direct by
an Issuer Order that they be destroyed or returned to it; provided, however,
that such Issuer Order is timely and the Notes have not been previously
disposed of by the Indenture Trustee.
Section 2.08. Conditions Precedent to the Authentication of the
Notes. The Notes may be authenticated by the Indenture Trustee, upon Issuer
Request and upon receipt by the Indenture Trustee of the following:
(a) An Issuer Order authorizing the execution and authentication of
such Notes by the Issuer.
(b) All of the items of Collateral that are to be delivered to the
Indenture Trustee or its designee.
(c) A Certificate of Fair Value certifying as to the value of the
Collateral.
(d) An executed counterpart of the Trust Agreement.
(e) An Opinion of Counsel addressed to the Indenture Trustee and the
Note Insurer to the effect that:
(i) all conditions precedent provided for in this Indenture relating
to the authentication of the Notes have been complied with;
(ii) the Owner Trustee has power and authority to execute, deliver
and perform its obligations under the Trust Agreement;
(iii) the Issuer has been duly formed, is validly existing as a
business trust under the laws of the State of Delaware, 12 Del. C.
Section 3801 et seq., and has power, authority and legal right to execute
and deliver this Indenture, the Administration Agreement, the Custodial
Agreement, the Insurance Agreement and the Sale and Servicing Agreement;
(iv) this Indenture creates a valid security interest in favor of
the Indenture Trustee, for the benefit of the Noteholders and the Note
Insurer, in the Issuer's right, title and interest in and to the Home
Loans securing the obligations of the Issuer hereunder;
(v) the Notes have been duly authorized by the Issuer and, when duly
executed and delivered by the Owner Trustee, on behalf of the Issuer, and
authenticated by the Indenture Trustee in accordance with the terms of
this Indenture and delivered and paid for, will be validly issued and
outstanding and entitled to the benefits and security provided for by
this Indenture and will constitute the legal, valid and binding
obligations of the Issuer, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to general
principles of equity regardless of whether enforcement is sought in a
proceeding in equity or at law;
(vi) this Indenture has been duly qualified under the Trust
Indenture Act;
(vii) no authorization, approval or consent of any governmental body
having jurisdiction in the premises which has not been obtained by the
Issuer is required to be obtained by the Issuer for the valid issuance
and delivery of the Notes, except that no opinion need be expressed with
respect to any such authorizations, approvals or consents as may be
required under any state securities or "blue sky" laws; and
(viii) any other matters as the Indenture Trustee may reasonably
request.
(f) An Officer's Certificate complying with the requirements of
Section 11.01 hereof 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 Trust
Agreement, 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
applied for have been complied with;
(ii) the Issuer is the owner of all of the Home Loans, has not,
other than pursuant to this Indenture, assigned any interest or
participation in the Home Loans (or, if any such interest or
participation has been assigned, it has been released) and has the right
to Grant all of the Home Loans to the Indenture Trustee;
(iii) the Issuer has Granted to the Indenture Trustee all of its
right, title and interest in and to the Collateral, and has delivered or
caused the same to be delivered to the Indenture Trustee;
(iv) attached thereto are true and correct copies of letters signed
by each Rating Agency confirming that each of the Notes have been rated
"AAA" or the equivalent by each Rating Agency; and
(v) all conditions precedent provided for in this Indenture relating
to the authentication of the Notes have been complied with.
(g) The Opinions of Counsel to be delivered pursuant to subsection
(d) above may differ from the Opinions of Counsel described in such subsection
so long as such Opinions of Counsel so delivered are acceptable to the Note
Insurer, each Rating Agency and the Indenture Trustee, which shall be
conclusively evidenced by the delivery on the Closing Date of the Note
Insurance Policy and of each such Rating Agency's rating letter and by the
Indenture Trustee's authentication and delivery of the Notes, respectively,
and such acceptable opinions shall be deemed to be the Opinions of Counsel
required pursuant to subsection (d) above
Section 2.09. Release of Collateral. (a) Except as otherwise provided
in subsections (b) and (c) of this Section, Section 11.01 hereof and the terms
of the Basic Documents, the Indenture Trustee shall release property from the
lien of this Indenture only upon receipt by it and the Note Insurer of an
Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel,
certificates in accordance with TIA Sections 3.14(c) and (d)(1), and
Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1)
or an Opinion of Counsel in lieu of such Independent Certificates to the
effect that the TIA does not require any such Independent Certificates;
provided that no such Independent Certificates or Opinion of Counsel in lieu
of such Independent Certificates shall be necessary in respect of property
released from the lien of the Indenture in accordance with the provisions
hereof if such property consists solely of cash. The Indenture Trustee shall
surrender the Note Insurance Policy upon satisfaction of the conditions in
Section 4.01.
(b) The Servicer, on behalf of the Issuer, shall be entitled to
obtain a release from the lien of this Indenture for any Home Loan and the
related Mortgaged Property at any time (i) after a payment by the Seller or
the Issuer of the Loan Purchase Price of the Home Loan, (ii) after a Qualified
Substitute Home Loan is substituted for such Home Loan and payment of the
Substitution Adjustment, if any, (iii) after liquidation of the Home Loan in
accordance with Section 5.12 of the Sale and Servicing Agreement and the
deposit of all net recoveries thereon in the Collection Account, (iv) upon the
termination of a Home Loan (due to, among other causes, a prepayment in full
of the Home Loan and sale or other disposition of the related Mortgaged
Property, or (v) as contemplated by Section 8.01 of the Sale and Servicing
Agreement. Any such release other than as contemplated by Section 8.01 of the
Sale and Servicing Agreement or pursuant to the preceding sentence shall be
subject to the condition that the Issuer shall have delivered to the Indenture
Trustee and the Note Insurer an Issuer Request (A) identifying the Home Loan
and the related Mortgaged Property to be released, (B) requesting the release
thereof, (C) setting forth the amount deposited in the Collection Account with
respect thereto, and (D) certifying that the amount deposited in the
Collection Account (x) equals the Loan Purchase Price of the Home Loan, in the
event a Home Loan and the related Mortgaged Property are being released from
the lien of this Indenture pursuant to item (i) above, (y) equals the
Substitution Adjustment related to the Qualified Substitute Home Loan and the
Deleted Home Loan released from the lien of the Indenture pursuant to item
(ii) above, or (z) equals the entire amount of net recoveries received with
respect to such Home Loan and the related Mortgaged Property in the event of a
release from the lien of this Indenture pursuant to items (iii) or (iv) above.
(c) The Indenture Trustee shall, if requested by the Servicer,
temporarily release or cause the Custodian temporarily to release to the
Servicer the Mortgage File pursuant to the provisions of Section 5.13 of the
Sale and Servicing Agreement upon compliance by the Servicer with the
provisions thereof; provided, however, that the Mortgage File shall have been
stamped to signify the Issuer's pledge to the Indenture Trustee under the
Indenture.
Section 2.10. Book-Entry Notes. The Notes, when authorized by an
Issuer Order, will be issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to 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, and no Note Owner will receive a
definitive Note representing such Note Owner's interest in such Note, except
as provided in Section 2.12 hereof. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to such Note Owners
pursuant to Section 2.12 hereof:
(a) the provisions of this Section shall be in full force and effect;
(b) the Note Registrar and the Indenture Trustee shall be entitled to
deal with the Clearing Agency for all purposes of this Indenture (including
the payment of principal of and interest on the Notes and the giving of
instructions or directions hereunder) as the sole Holder of the Notes, and
shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section conflict with
any other provisions of this Indenture, the provisions of this Section shall
control;
(d) the rights of Note Owners shall be exercised only through the
Clearing Agency and shall be limited to those established by law and
agreements between such Note Owners and the Clearing Agency and/or the
Clearing Agency Participants pursuant to the Note Depository Agreement. Unless
and until Definitive Notes are issued pursuant to Section 2.12 hereof, the
initial Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit payments of principal of and
interest on the Notes to such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Holders of Notes evidencing a
specified percentage of the Voting Interests of the Outstanding Notes, the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Note Owners
and/or Clearing Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has delivered
such instructions to the Indenture Trustee.
Section 2.11. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to such Note Owners pursuant to
Section 2.12 hereof, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency and shall have no obligation to such Note Owners.
Section 2.12. Definitive Notes. If (i) the Issuer advises the
Indenture Trustee in writing that the Clearing Agency is no longer willing or
able to properly discharge its responsibilities with respect to the Book-Entry
Notes and the Administrator is unable to locate a qualified successor, (ii)
the Issuer at its option advises the Indenture Trustee in writing that it
elects to terminate the book-entry system through the Clearing Agency or (iii)
after the occurrence of an Event of Default, Owners of the Book- Entry Notes
representing beneficial interests aggregating at least a majority of the
Voting Interests of the Outstanding Notes advise the Clearing Agency in
writing that the continuation of a book-entry system through the Clearing
Agency is no longer in the best interests of such Note Owners, then the
Clearing Agency shall notify all Note Owners and the Indenture Trustee of the
occurrence of such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Clearing Agency,
accompanied by registration instructions, the Issuer shall execute and the
Indenture Trustee shall authenticate the Definitive Notes in accordance with
the instructions of the Clearing Agency. None of the Issuer, the Note Insurer,
the Note Registrar or the Indenture Trustee shall be liable for any delay in
delivery of such instructions and each of them may conclusively rely on, and
shall be protected in relying on, such instructions. Upon the issuance of
Definitive Notes, the Indenture Trustee shall recognize the Holders of the
Definitive Notes as Noteholders.
Section 2.13. Tax Treatment. The Issuer has entered into this
Indenture, and the Notes will be issued, with the intention that for all
purposes, including federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Collateral. The Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of a Note (and each Note Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat
the Notes for all purposes, including federal, state and local income, single
business and franchise tax purposes, as indebtedness of the Issuer.
ARTICLE III
COVENANTS
Section 3.01. Payment of Principal and Interest. The Issuer will duly
and punctually pay (or will cause to be paid duly and punctually) the
principal of and interest on the Notes in accordance with the terms of the
Notes and this Indenture. Without limiting the foregoing, unless the Notes
have been declared due and payable pursuant to Section 5.02 and monies
collected by the Indenture Trustee are being applied in accordance with
Section 5.04(b), subject to and in accordance with Section 8.02(c) hereof, the
Issuer will cause to be distributed all amounts on deposit in the Note
Distribution Account on each Distribution Date deposited therein pursuant to
the Sale and Servicing Agreement (i) for the benefit of the Notes of each
Class, to the Holders thereof. Amounts properly withheld under the Code by any
Person from a payment to any Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to such Noteholder for all
purposes of this Indenture.
The Notes shall be non-recourse obligations of the Issuer and shall
be limited in right of payment to amounts available from the Collateral and
any amounts received by the Indenture Trustee under the Note Insurance Policy
in respect of the Notes, as provided in this Indenture. The Issuer shall not
otherwise be liable for payments on the Notes. If any other provision of this
Indenture shall be 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 or
will cause the Administrator to maintain in the Borough of Manhattan in The
City of New York an office or agency 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 hereby initially appoints the Administrator to serve as its agent for
the foregoing purposes and to serve as Paying Agent with respect to the Notes.
The Issuer will give prompt written notice to the Indenture Trustee of the
location, and of any change in the location, of any such office or agency. If
at any time the Issuer shall fail to maintain any such office or agency or
shall fail to furnish the Indenture Trustee with the address thereof, such
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and the Issuer hereby appoints the Indenture Trustee as its agent to
receive all such surrenders, notices and demands.
Section 3.03. Money for Payments to Be Held in Trust. As provided in
Section 8.02(a) and (b) hereof, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the
Collection Account and the Note Distribution Account pursuant to Section
8.02(c) hereof shall be made on behalf of the Issuer by the Indenture Trustee
or by the Paying Agent, and no amounts so withdrawn from the Collection
Account and the Note Distribution Account for payments of Notes shall be paid
over to the Issuer except as provided in this Section.
On or before the Business Day preceding each Distribution Date and
the Redemption Date, the Paying Agent shall deposit or cause to be deposited
in the Note Distribution Account an aggregate sum sufficient to pay the
amounts due on such Distribution Date or the Redemption Date under the Notes,
such sum to be held in trust for the benefit of the Persons entitled thereto,
and (unless the Paying Agent is the Indenture Trustee) shall promptly notify
the Indenture Trustee of its action or failure so to act.
Any Paying Agent shall be appointed by Issuer Order with written
notice thereof to the Indenture Trustee and the Note Insurer. Any Paying Agent
appointed by the Issuer shall be a Person which would be eligible to be
Indenture Trustee hereunder as provided in Section 6.11 hereof. The Issuer
shall not appoint any Paying Agent (other than the Indenture Trustee) which is
not, at the time of such appointment, a Depository Institution.
The Issuer will cause each Paying Agent other than the Administrator
to execute and deliver to the Indenture Trustee and the Note Insurer an
instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent, it hereby so agrees),
subject to the provisions of this Section, that such Paying Agent will:
(a) 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;
(b) give the Indenture Trustee and the Note Insurer notice of any
default by the Issuer (or any other obligor upon the Notes) of which it has
actual knowledge in the making of any payment required to be made with respect
to the Notes;
(c) 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;
(d) immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of Notes if at
any time it ceases to meet the standards required to be met by a Paying Agent
at the time of its appointment; and
(e) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable reporting
requirements in connection therewith; provided, however, that with respect to
withholding and reporting requirements applicable to original issue discount,
the accrual of market discount or the amortization of premiums (if any) on the
Notes, the Issuer shall have first provided the calculations pertaining
thereto to the Indenture Trustee.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums
held in trust by such Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such
Paying Agent; and upon such payment by any Paying Agent to the Indenture
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Subject to applicable laws with respect to escheat of funds or
abandoned property, 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 years after such amount has become due and payable
shall be discharged from such trust and be paid to the Issuer on Issuer
Request; and the Holder of such Note shall thereafter, as an unsecured general
creditor, look only to the Issuer for payment thereof (but only to the extent
of the amounts so paid to the Issuer), and all liability of the Indenture
Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided, however, that the Indenture Trustee or such Paying Agent,
before being required to make any such repayment, shall at the expense and
direction of the Issuer cause to be published, once in a newspaper of general
circulation in The City of New York customarily published in the English
language on each Business Day, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days
from the date of such publication, any unclaimed balance of such money then
remaining will be repaid to the Issuer. The Indenture Trustee shall also adopt
and employ, at the expense and direction of the Issuer, any other reasonable
means of notification of such repayment (including, but not limited to,
mailing notice of such repayment to Holders whose Notes have been called but
have not been surrendered for redemption or whose right to or interest in
moneys due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for
each such Holder).
Section 3.04. Existence. (a) Subject to subparagraph (b) of this
Section 3.04, the Issuer will keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware (unless
subject to the prior written consent of the Note Insurer it becomes, or any
successor Issuer hereunder is or becomes, organized under the laws of any
other State or of the United States of America, in which case the Issuer will
keep in full effect its existence, rights and franchises under the laws of
such other jurisdiction) and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other instrument or agreement included in the
Collateral.
(b) Any successor to the Owner Trustee appointed pursuant to Section
10.02 of the Trust Agreement shall be the successor Owner Trustee under this
Indenture without the execution or filing of any paper, instrument or further
act to be done on the part of the parties hereto.
(c) Upon any consolidation or merger of or other succession to the
Owner Trustee, the Person succeeding to the Owner Trustee under the Trust
Agreement may exercise every right and power of the Owner Trustee under this
Indenture with the same effect as if such Person had been named as the Owner
Trustee herein.
Section 3.05. Protection of Collateral. The Issuer will from time to
time or upon the direction of the Note Insurer execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other
instruments, and will take such other action necessary or advisable to:
(a) provide further assurance with respect to the Grant of all or any
portion of the Collateral;
(b) maintain or preserve the lien and security interest (and the
priority thereof) of this Indenture or carry out more effectively the purposes
hereof;
(c) perfect, publish notice of or protect the validity of any Grant
made or to be made by this Indenture;
(d) enforce any rights with respect to the Collateral; or
(e) preserve and defend title to the Collateral and the rights of the
Indenture Trustee, the Noteholders and the Note Insurer in such Collateral
against the claims of all persons and parties.
The Issuer hereby designates the Administrator, its agent and
attorney-in-fact, to execute any financing statement, continuation statement
or other instrument required to be executed pursuant to this Section 3.05.
Section 3.06. Annual Opinions as to Collateral. On or before March
15th in each calendar year, beginning in 2000, the Issuer shall furnish to the
Indenture Trustee and the Note Insurer an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect
to the recording, filing, re-recording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and
continuation statements as is necessary to maintain the lien and security
interest 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 the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien
and security interest of this Indenture until March 15th of the following
calendar year.
Section 3.07. Performance of Obligations; Servicing of Home Loans.
(a) The Issuer will 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 material covenants or obligations under any instrument or
agreement included in the Collateral or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
expressly provided in this Indenture, the Sale and Servicing Agreement or such
other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the assistance
of other Persons (including, without limitation, the Administrator under the
Administration Agreement) to assist it in performing its duties under this
Indenture, and any performance of such duties by a Person identified to the
Indenture Trustee and the Note Insurer in an Officer's Certificate of the
Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer
has contracted with the Administrator to assist the Issuer in performing its
duties under this Indenture. Notwithstanding anything to the contrary herein,
the Issuer shall in all respects remain liable for its obligations hereunder
and under the Basic Documents.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, in the Basic Documents
and in the instruments and agreements included in the Collateral, including
but not limited to (i) filing or causing to be filed all UCC financing
statements and continuation statements required to be filed by the terms of
this Indenture and the Sale and Servicing Agreement and (ii) recording or
causing to be recorded all Mortgages, Assignments of Mortgage, all intervening
Assignments of Mortgage and all assumption and modification agreements
required to be recorded by the terms of the Sale and Servicing Agreement, in
accordance with and within the time periods provided for in this Indenture
and/or the Sale and Servicing Agreement, as applicable. Except as otherwise
expressly provided therein, the Issuer shall not waive, amend, modify,
supplement or terminate any Basic Document or any provision thereof without
the consent of the Indenture Trustee, the Note Insurer and the Holders of at
least a majority of the Voting Interests of the Outstanding Notes.
(d) If the Issuer shall have knowledge of the occurrence of an Event
of Default under the Sale and 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.
(e) As promptly as possible after the giving of notice to the
Servicer of the termination of the Servicer's rights and powers pursuant to
Section 7.01 of the Sale and Servicing Agreement, the Indenture Trustee shall
proceed in accordance with Section 7.02 of the Sale and Servicing Agreement.
(f) Without derogating from the absolute nature of the assignment
granted to the Indenture Trustee under this Indenture or the rights of the
Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without
the prior written consent of the Indenture Trustee and the Note Insurer unless
a Note Insurer Default has occurred and is continuing, amend, modify, waive,
supplement, terminate or surrender, or agree to any amendment, modification,
supplement, termination, waiver or surrender of, the terms of any Collateral
(except to the extent otherwise provided in the Sale and Servicing Agreement)
or the Basic Documents, or waive timely performance or observance by the
Servicer or the Depositor under the Sale and Servicing Agreement; and (ii)
that any such amendment shall not (A) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, distributions that are
required to be made for the benefit of the Noteholders or (B) reduce the
aforesaid percentage of the Notes that is required to consent to any such
amendment, without the consent of the Holders the Voting Interests of all
Outstanding Notes. If any such amendment, modification, supplement or waiver
shall so be consented to by the Indenture Trustee and the Note Insurer unless
a Note Insurer Default has occurred and is continuing, the Issuer agrees,
promptly following a request by the Indenture Trustee or the Note Insurer to
do so, to execute and deliver, in its own name and at its own expense, such
agreements, instruments, consents and other documents as the Indenture Trustee
or the Note Insurer may deem necessary or appropriate in the circumstances.
Section 3.08. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(a) except as expressly permitted by this Indenture, the Home Loan
Sale Agreement or the Sale and Servicing Agreement, sell, transfer, exchange
or otherwise dispose of any of the properties or assets of the Issuer,
including those included in the Collateral, unless directed to do so by the
Indenture Trustee or the Note Insurer;
(b) claim any credit on, or make any deduction from the principal or
interest payable in respect of, the Notes (other than amounts properly
withheld from such payments under the Code) or assert any claim against any
present or former Noteholder by reason of the payment of the taxes levied or
assessed upon any part of the Collateral;
(c) engage in any business or activity other than as permitted by the
Trust Agreement or other than in connection with, or relating to, the issuance
of Notes pursuant to this Indenture, or amend the Trust Agreement as in effect
on the Closing Date other than in accordance with Section 11.01 thereof;
(d) issue debt obligations under any other indenture;
(e) incur or assume any indebtedness or guaranty 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 or merge or consolidate
with any other Person;
(g) (A) permit the validity or effectiveness of this Indenture to be
impaired, or permit the lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may expressly be permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or otherwise
arise upon or burden the Collateral or any part thereof or any interest
therein or the proceeds thereof (other than tax liens, mechanics' liens and
other liens that arise by operation of law, in each case on any of the
Mortgaged Properties and arising solely as a result of an action or omission
of the related Obligors) or (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such tax,
mechanics' or other lien) security interest in the Collateral;
(h) remove the Administrator without cause unless the Rating Agency
Condition shall have been satisfied in connection with such removal and the
Note Insurer shall have given its prior written consent;
(i) take any other action or fail to take any action which may cause
the Issuer to be taxable as (a) an association pursuant to Section 7701 of the
Code and the corresponding regulations or (b) as a taxable mortgage pool
pursuant to Section 7701(i) of the Code and the corresponding regulations; or
(j) made any expenditure by long-term or operating lease or otherwise
for capital assets (either realty or personalty).
Section 3.09. Annual Statement as to Compliance. The Issuer will
deliver to the Indenture Trustee and the Note Insurer, within 120 days after
the end of each fiscal year of the Issuer (commencing in the fiscal year
1999), an Officer's Certificate stating, as to the Authorized Officer signing
such Officer's Certificate, that:
(a) a review of the activities of the Issuer during such year and of
its performance 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 its
compliance with any such condition or covenant, specifying each such default
known to such Authorized Officer and the nature and status thereof.
Section 3.10. Covenants of the Issuer. All covenants of the Issuer in
this Indenture are covenants of the Issuer and are not covenants of the Owner
Trustee. The Owner Trustee is, and any successor Owner Trustee under the Trust
Agreement will be, entering into this Indenture solely as Owner Trustee under
the Trust Agreement and not in its respective individual capacity, and in no
case whatsoever shall the Owner Trustee or any such successor Owner Trustee be
personally liable on, or for any loss in respect of, any of the statements,
representations, warranties or obligations of the Issuer hereunder, as to all
of which the parties hereto agree to look solely to the property of the
Issuer.
Section 3.11. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Sale and Servicing Agreement.
Section 3.12. 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 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, (x)
distributions to the Servicer, the Indenture Trustee, the Owner Trustee and
the Securityholders as contemplated by, and to the extent funds are available
for such purpose under, the Sale and Servicing Agreement, the Indenture or the
Trust Agreement and (y) payments to the Indenture Trustee pursuant to the
Administration Agreement. The Issuer will not, directly or indirectly, make or
cause to be made payments to or distributions from the Note Distribution
Account, the Collection Account except in accordance with this Indenture and
the Basic Documents.
Section 3.13. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States and shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Indenture
Trustee and the Note Insurer, in form satisfactory to the Indenture
Trustee and the Note Insurer, the due and punctual payment of the
principal of and interest on all Notes and the performance or observance
of every agreement and covenant of this Indenture on the part of the
Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee and the Note
Insurer) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Note Insurer, an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation or merger and such supplemental indenture
comply with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act); and
(vii) the Note Insurer has given its prior written consent.
(b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person other than
in accordance with the Basic Documents, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of which
is hereby restricted (A) shall be a United States citizen or a Person
organized and existing under the United States of America or any State,
(B) expressly assumes, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee and the Note Insurer, in form
satisfactory to the Indenture Trustee and the Note Insurer, the due and
punctual payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture on the part of the Issuer to be performed or observed, all as
provided herein, (C) expressly agrees by means of such supplemental
indenture that all right, title and interest so conveyed or transferred
shall be subject and subordinate to the rights of Holders of the Notes
and the Note Insurer, (D) unless otherwise provided in such supplemental
indenture, expressly agrees to indemnify, defend and hold harmless the
Issuer against and from any loss, liability or expense arising under or
related to this Indenture and the Notes and (E) expressly agrees by means
of such supplemental indenture that such Person (or, if a group of
Persons, one specified Person) shall make all filings with the Commission
(and any other appropriate Person) required by the Exchange Act in
connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and shall
have delivered copies thereof to the Indenture Trustee and the Note
Insurer) to the effect that such transaction will not have any material
adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien and security
interest created by this Indenture shall have been taken;
(vi) the Issuer shall have delivered to the Indenture Trustee and
the Note Insurer an Officer's Certificate and an Opinion of Counsel each
stating that such conveyance or transfer and such supplemental indenture
comply with this Article III and that all conditions precedent herein
provided for relating to such transaction have been complied with
(including any filing required by the Exchange Act); and
(vii) the Note Insurer has given its prior written consent.
Section 3.14. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.13(a), the Person formed by or surviving such consolidation or
merger (if other than the Issuer) shall succeed to, and be substituted for,
and may exercise every right and power of, the Issuer under this Indenture
with the same effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.13(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed by or performed on the
part of the Issuer with respect to the Notes immediately upon the delivery of
written notice to the Indenture Trustee and the Note Insurer stating that the
Issuer is to be so released.
Section 3.15. Treatment of Notes as Debt for Tax Purposes. The Issuer
shall, and shall cause the Administrator to, treat the Notes as indebtedness
for all purposes.
Section 3.16. 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
Servicer or the Depositor of its obligations under the Sale and Servicing
Agreement and each default on the part of the Seller of its obligations under
the Home Loan Sale Agreement.
Section 3.17. 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.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes (except as to
(i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections
3.03, 3.04, 3.05, 3.08 3.10, 3.12 and 3.16 hereof, (v) the rights, obligations
and immunities of the Indenture Trustee hereunder (including the rights of the
Indenture Trustee under Section 6.07 hereof and the obligations of the
Indenture Trustee under Section 4.02 hereof) and (vi) the rights of
Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them), and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when either (I) the Sale and Servicing Agreement has
been terminated pursuant to Section 8.01 thereof or (II) all of the following
have occurred:
(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 2.04 hereof and
(ii) Notes for the payment of which money has theretofore been
deposited in trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.03 hereof) shall have been delivered to the
Indenture Trustee for cancellation; or
(ii) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(A) shall have become due and payable, or
(B) will become due and payable within one year at the
Maturity Date (or, if one or more Classes of Notes have
different Maturity Dates, the latest Maturity Date), or
(C) are to be called for redemption within one year under
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,
(D) and the Issuer, in the case of clause (A), (B) or (C)
above, has irrevocably deposited or caused irrevocably to be
deposited with the Indenture Trustee cash or direct obligations
of or obligations guaranteed by the United States of America
(which will mature prior to the date such amounts are payable),
in trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes (including
Deferred Amounts to the extent required to be paid hereunder)
not theretofore delivered to the Indenture Trustee for
cancellation when due to the applicable Maturity Date of such
Class of Notes or the Redemption Date (if Notes shall have been
called for redemption pursuant to Section 10.01 hereof), as the
case may be; and
(b) the latest of (i) 18 months after payment in full of all
outstanding obligations under the Notes, (ii) the payment in full of all
unpaid fees and expenses of the Trust and all sums owing to the Note Insurer
under the Insurance Agreement and (iii) the date on which the Issuer has paid
or caused to be paid all other sums payable hereunder by the Issuer; and
(c) the Issuer shall have delivered to the Indenture Trustee and the
Note Insurer an Officer's Certificate, an Opinion of Counsel and (if required
by the TIA or the Indenture Trustee) an Independent Certificate from a firm of
certified public accountants, each meeting the applicable requirements of
Section 11.01(a) hereof and, subject to Section 11.02 hereof, each stating
that all conditions precedent herein provided for, relating to the
satisfaction and discharge of this Indenture with respect to the Notes, have
been complied with.
Section 4.02. Application of Trust Money. All moneys deposited with
the Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held
in trust and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment, either directly or through any Paying Agent,
as the Indenture Trustee may determine, to the Note Insurer and the Holders of
the particular Notes for the payment or redemption of which such moneys have
been deposited with the Indenture Trustee, of all sums due and to become due
thereon for principal and/or interest; but such moneys need not be segregated
from other funds except to the extent required herein or in the Sale and
Servicing Agreement or required by law.
Section 4.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the
Notes, all moneys then held by any Paying Agent other than the Indenture
Trustee under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuer, be paid to the Indenture Trustee to be held
and applied according to Section 3.03 hereof and thereupon such Paying Agent
shall be released from all further liability with respect to such moneys.
ARTICLE V
REMEDIES
Section 5.01. Events of Default. (a) "Event of Default," wherever
used herein, means 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):
(i) subject to Section 5.01(b) and notwithstanding that there
may be insufficient sums in the Note Distribution Account for
payment thereof on the related Distribution Date, default in the
payment of any interest on any Note when the same becomes due and
payable, and continuance of such default for a period of five (5)
days; or
(ii) subject to Section 5.01(b) and notwithstanding that there
may be insufficient sums in the Note Distribution Account for
payment thereof on the related Distribution Date, default in the
payment of any installment of principal when the same becomes due
and payable, and continuance of such default for a period of five
(5) days, or of the entire Principal Amount (including any Deferred
Amount to the extent required to be paid hereunder) of any Note on
the applicable Maturity Date; or
(iii) the existence of an unpaid Deferred Amount in respect of
any Highest Priority Class Notes; or
(iv) default in the observance or performance of any covenant
or agreement of the Issuer made in this Indenture (other than a
covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or any
representation or warranty of the Issuer made in this Indenture, the
Insurance Agreement, the Sale and Servicing Agreement or in any
certificate or other writing delivered pursuant hereto or in
connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such misrepresentation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by registered
or certified mail, to the Issuer by the Indenture Trustee or the
Note Insurer, or to the Issuer and the Indenture Trustee by the
Holders of at least 25% of the Voting Interests of the Outstanding
Notes, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and
stating that such notice is a notice of Default hereunder; or
(v) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any
substantial part of the Collateral in an involuntary case under any
applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for any substantial part of the
Collateral, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain unstayed and
in effect for a period of 60 consecutive days; or
(vi) the commencement by the Issuer of a voluntary case under
any applicable federal or state bankruptcy, insolvency or other
similar law now or hereafter in effect, or the consent by the Issuer
to the entry of an order for relief in an involuntary case under any
such law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any
substantial part of the Collateral, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure
by the Issuer generally to pay its debts as such debts become due,
or the taking of any action by the Issuer in furtherance of any of
the foregoing.
(b) The Issuer promptly shall deliver to the Indenture Trustee and
the Note Insurer, within five days after the occurrence thereof, written
notice in the form of an Officer's Certificate of any event which with the
giving of notice and the lapse of time would become an Event of Default under
clauses (iv) and (v) above, the status of such event and what action the
Issuer is taking or proposes to take with respect thereto.
Section 5.02. Acceleration of Maturity; Rescission and Annulment. If
an Event of Default should occur and be continuing, then and in every such
case the Indenture Trustee may, and at the direction or upon the prior written
consent of the Note Insurer or the Majority Highest Priority Class Noteholders
with the written consent of the Note Insurer 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
the unpaid principal amount of such Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately
due and payable.
At any time after such declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the moneys due has
been obtained by the Indenture Trustee as hereinafter in this Article V
provided, the Note Insurer or the Majority Highest Priority Class Noteholders
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/or interest on all Highest
Priority Class Notes and all other amounts that would then be due
hereunder or upon such Highest Priority Class 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 plus all amounts due to the Note Insurer under the Basic
Documents and the reasonable compensation, expenses, disbursements
and advances of each of the Indenture Trustee and the Note Insurer
and its agents and counsel; and
(b) all Events of Default, other than the nonpayment of the principal
of the Notes that has become due solely by such acceleration, have been cured
or waived as provided in Section 5.12 hereof.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
The Holders of Notes of a Non-Priority Class shall have no right to
exercise any remedies of Noteholders under this Article V, except to the
extent otherwise expressly provided herein.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in the
payment of any interest on any Note when the same becomes due and payable, and
such default continues for a period of five days, or (ii) default is made in
the payment of any installment of principal when the same becomes due and
payable, and continuance of such default for a period of five (5) days, or of
the Principal Amount of any Note at the applicable Maturity Date, the Issuer
shall, upon demand of the Indenture Trustee made at the direction of the Note
Insurer, pay to the Indenture Trustee, for the benefit of the Holders of the
Notes and the Note Insurer, the whole amount then due and payable on such
Notes for principal and/or interest, with interest upon the overdue principal
and, to the extent payment at such rate of interest shall be legally
enforceable, upon overdue installments of interest at the rate borne by the
Notes and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee
and the Note Insurer and their respective agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an
express trust, shall at the direction of the Note Insurer, and if a Note
Insurer Default has occurred and is continuing, the Indenture Trustee may, and
shall at the direction of the Majority Highest Priority Class Noteholders,
institute a Proceeding for the collection of the sums so due and unpaid, and
may prosecute such Proceeding to judgment or final decree, and may enforce the
same against the Issuer or other obligor upon such Notes and collect in the
manner provided by law out of the property of the Issuer or other obligor upon
such Notes, wherever situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee shall, at the direction of the Note Insurer, and if a Note Insurer
Default has occurred and is continuing, the Indenture Trustee may, in its
discretion, and shall, at the direction of the Majority Highest Priority Class
Noteholders, as more particularly provided in Section 5.04, proceed to protect
and enforce its rights and the rights of the Note Insurer and the Noteholders
by such appropriate Proceedings as the Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or
by law.
(d) In case there shall be pending, relative to the Issuer or any
other obligor upon the Notes or any Person having or claiming an ownership
interest in the Collateral, Proceedings under Title 11 of the United States
Code or any other applicable federal or state bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective
of whether the Indenture Trustee shall have made any demand pursuant to the
provisions of this Section, shall be entitled and empowered, upon the
direction of the Note Insurer, by intervention in such Proceedings or
otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and/or interest owing and unpaid in respect of the Notes
and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee
(including any claim for reasonable compensation to the Indenture
Trustee, each predecessor Indenture Trustee and Note Insurer, and
their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all
advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence or bad faith),
the Note Insurer and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee,
a standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all
amounts received with respect to the claims of the Noteholders, the
Note Insurer and the Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the
Indenture Trustee, the Note Insurer or the Holders of Notes allowed
in any judicial proceedings relative to the Issuer, its creditors
and its property;
(v) and any trustee, receiver, liquidator, custodian or other
similar official in any such Proceeding is hereby authorized by each
of such Noteholders and the Note Insurer to make payments to the
Indenture Trustee and, in the event that the Indenture Trustee shall
consent to the making of payments directly to such Noteholders and
the Note Insurer, to pay to the Indenture Trustee such amounts as
shall be sufficient to cover reasonable compensation to the
Indenture Trustee, each predecessor Indenture Trustee and their
respective agents, attorneys and counsel, and all other expenses and
liabilities incurred and all advances made by the Indenture Trustee
and each predecessor Indenture Trustee except as a result of
negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder or the Note Insurer any plan of reorganization,
arrangement, adjustment or composition affecting 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 in any such proceeding
except, as aforesaid, to vote for the election of a trustee in bankruptcy or
similar Person.
(f) All rights of action and of asserting claims under this
Indenture, or under any of the Notes, may be enforced by the Indenture Trustee
without the possession of any of the Notes or the production thereof in any
trial or other Proceedings relative thereto, and any such action or
Proceedings instituted by the Indenture Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Indenture
Trustee, each predecessor Indenture Trustee and their respective agents,
attorneys and counsel, shall be for the ratable benefit of the Holders of the
Notes and the Note Insurer.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
Section 5.04. Remedies; Priorities.
(a) If an Event of Default shall have occurred, the Indenture Trustee
shall, at the direction of the Note Insurer, and if a Note Insurer Default has
occurred and is continuing, the Indenture Trustee may, do one or more of the
following (subject to Section 5.05 hereof):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from the Issuer and any other obligor upon such Notes moneys
adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the
Collateral;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee, the Note Insurer or
the Noteholders; and
(iv) sell the Collateral or any portion thereof or rights or
interest therein in a commercially reasonable manner, at one or more
public or private sales called and conducted in any manner permitted
by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Collateral following an Event of Default, unless (A) the Holders
of 100% of the Voting Interests of the Outstanding Notes consent thereto, (B)
the proceeds of such sale or liquidation distributable to the Noteholders are
sufficient to discharge in full all amounts then due and unpaid upon such
Notes for principal (including any Deferred Amounts) and/or interest or (C)
the Indenture Trustee determines that the Collateral will not continue to
provide sufficient funds for the payment of principal of (including any
Deferred Amounts) and interest on the Notes as they would have become due if
the Notes had not been declared due and payable, and the Indenture Trustee
obtains the consent of Holders of 66-2/3% of the Voting Interests of the
Highest Priority Class Notes. In determining such sufficiency or insufficiency
with respect to clauses (B) and (C) of this subsection, the Indenture Trustee
may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the
Collateral for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant
to this Article V, it shall pay out the money or property in the following
order:
first: to the Indenture Trustee for any costs or expenses
incurred by it in connection with the enforcement of the remedies
provided for in this Article V, and, if GMAC is no longer the
Servicer, for the Indenture Trustee Fee then due and to the Owner
Trustee and the Custodian for the Owner Trustee Fee and any
compensation to the Custodian then due;
second: to the Note Insurer for the Premium Amount then due and
unpaid;
third: to the Servicer for the Servicing Fee then due and
unpaid;
fourth: to the Noteholders for amounts due and unpaid on the
Notes for interest, pro rata according to the amounts due and
payable on the Notes for interest;
fifth: to the applicable Noteholders for amounts due and unpaid
on the Notes for principal, pro rata among the Holders of each such
Class of Notes, according to the amounts due and payable and in the
order and priorities set forth in Section 6.05(b)(i) of the Sale and
Servicing Agreement;
sixth: to the Note Insurer for any amounts then due and payable
under the Insurance Agreement;
seventh: pro rata, to the Servicer and the Depositor, any
outstanding amounts payable or reimbursable thereto under the Sale
and Servicing Agreement; and
eighth: to the Owner Trustee, for any amounts to be distributed
to the holders of the Residual Interest Certificates pursuant to the
Trust Agreement.
The Indenture Trustee may fix a record date and payment date for any
payment to be made to the Noteholders pursuant to this Section. At least 15
days before such record date, the Indenture Trustee shall mail to each
Noteholder, the Note Insurer and the Issuer a notice that states the record
date, the payment date and the amount to be paid.
Section 5.05. Optional Preservation of the Collateral. If the Notes
have been declared to be due and payable under Section 5.02 hereof following
an Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Collateral. It is the desire of the parties hereto
and the Noteholders that there be at all times sufficient funds for the
payment of principal of and interest on the Notes, and the Indenture Trustee
shall take such desire into account when determining whether or not to
maintain possession of the Collateral. In determining whether to maintain
possession of the Collateral, the Indenture Trustee may, but need not, obtain
and rely upon an opinion of an Independent investment banking or accounting
firm of national reputation as to the feasibility of such proposed action and
as to the sufficiency of the Collateral for such purpose.
Section 5.06. Limitation of Suits. No Holder of any Note shall have
any right to institute any Proceeding, judicial or otherwise, with respect to
this Indenture or for the appointment of a receiver or trustee, or for any
other remedy hereunder for so long as a Note Insurer Default has not occurred
or is not continuing, and shall not have any such right if a Note Insurer
Default has occurred and is continuing, unless:
(a) such Holder has previously given written notice to the Indenture
Trustee of a continuing Event of Default;
(b) the Majority Highest Priority Class Noteholders have made written
request to the Indenture Trustee to institute such Proceeding in respect of
such Event of Default in its own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
Proceeding;
(e) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the Majority
Highest Priority Class Noteholders; and
(f) the Note Insurer has given its prior written consent.
It is understood and intended that no one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by availing of,
any provision of this Indenture to affect, disturb or prejudice the rights of
any other Holders of Notes or to obtain or to seek to obtain priority or
preference over any other Holders or to enforce any right under this
Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of
Notes pursuant to this Section, each representing less than the Majority
Highest Priority Class Noteholders, the Indenture Trustee in its sole
discretion may determine what action, if any, shall be taken, notwithstanding
any other provisions of this Indenture.
Section 5.07. Unconditional Rights of Noteholders to Receive
Principal and Interest. Notwithstanding any other provisions in this
Indenture, the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any,
on, and Deferred Amounts, if any, on such Note on or after the applicable
Maturity Date thereof expressed in such Note or in this Indenture (or, in the
case of redemption, on or after the Redemption Date) and to institute suit for
the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture
Trustee, 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.
Section 5.09. 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 5.10. Delay or Omission Not a Waiver. No delay or omission of
the Indenture Trustee, the Note Insurer or any Holder of any Note to exercise
any right or remedy accruing upon any Default or Event of Default shall impair
any such right or remedy or constitute a waiver of any such Default or Event
of Default or an acquiescence therein. Every right and remedy given by this
Article V 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,
as the case may be, subject, in each case, however, to the right of the Note
Insurer to control any such right and remedy, except as provided in Section
11.20.
Section 5.11. Control by Noteholders. The Majority Highest Priority
Class Noteholders shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee
with respect to the Notes or exercising any trust or power conferred on the
Indenture Trustee; provided, however, that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) subject to the express terms of Section 5.04 hereof, any
direction to the Indenture Trustee to sell or liquidate the Collateral shall
be by Holders of Notes representing not less than 100% of the Voting Interests
of all Class of Notes Outstanding;
(c) if the conditions set forth in Section 5.05 hereof have been
satisfied and the Indenture Trustee elects to retain the Collateral pursuant
to such Section, then any direction to the Indenture Trustee by Holders of
Notes representing less than 100% of the Outstanding Amount of the Highest
Priority Class Notes to sell or liquidate the Collateral shall be of no force
and effect; and
(d) the Indenture Trustee may take any other action deemed proper by
the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of the Noteholders set forth in this
Section 5.11, subject to Section 6.01 hereof, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any Noteholders not consenting to
such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of
the acceleration of the maturity of the Notes as provided in Section 5.02
hereof the Note Insurer may, or with the prior written consent of the Note
Insurer, the Majority Highest Priority Class Noteholders may waive any past
Default or Event of Default and its consequences, except a Default (a) in the
payment of principal of or interest on any of the Notes or (b) in respect of a
covenant or provision hereof that cannot be modified or amended without the
consent of the Note Insurer or the Holder of each Note. In the case of any
such waiver, the Issuer, the Indenture Trustee, the Note Insurer and the
Holders of the Notes shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
Section 5.13. Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or
omitted by it as Indenture Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may
in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee or the Note Insurer, (b) any suit instituted by any
Noteholder, or group of Noteholders, in each case holding in the aggregate
more than 10% of the Voting Interests of the Outstanding Notes or (c) any suit
instituted by any Noteholder for the enforcement of the payment of principal
of or interest on any Note on or after the respective due dates expressed in
such Note and in this Indenture (or, in the case of redemption, on or after
the Redemption Date).
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it will not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee or the Note Insurer, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.15. Action on Notes. The Indenture Trustee's right to seek
and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee, the Note Insurer or the
Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee or the Note Insurer against the Issuer or by the levy of any execution
under such judgment upon any portion of the Collateral or upon any of the
assets of the Issuer. Any money or property collected by the Indenture Trustee
shall be applied in accordance with Section 5.04(b) hereof.
Section 5.16. Performance and Enforcement of Certain Obligations (a)
Promptly following a request from the Indenture Trustee or the Note Insurer to
do so and at the Administrator's expense, the Issuer shall take all such
lawful action as the Indenture Trustee may request to compel or secure the
performance and observance by the Depositor and the Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Sale and Servicing Agreement, or by the Seller of its obligations under or in
connection with the Home Loan Sale Agreement and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale and Servicing Agreement to the extent and in
the manner directed by the Indenture Trustee, or the Note Insurer including
the transmission of notices of default on the part of the Depositor, the
Seller or the Servicer thereunder and the institution of legal or
administrative actions or proceedings to compel or secure performance by the
Depositor, the Seller or the Servicer of each of their obligations under the
Sale and Servicing Agreement or the Home Loan Sale Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee may, with the prior written consent of the Note Insurer, and
shall at the direction of the Note Insurer or with the prior written consent
of the Note Insurer, and at the direction (which direction shall be in writing
or by telephone, confirmed in writing promptly thereafter) of the Majority
Highest Priority Class Noteholders shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Depositor or the
Servicer under or in connection with the Sale and Servicing Agreement, or
against the Seller under or in connection with the Home Loan Sale Agreement
including the right or power to take any action to compel or secure
performance or observance by the Depositor, the Seller or the Servicer, as the
case may be, of each of their obligations to the Issuer thereunder and to give
any consent, request, notice, direction, approval, extension, or waiver under
the Sale and Servicing Agreement or the Home Loan Sale Agreement, as the case
may be, and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and
no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; provided, however, that the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.11 hereof.
(d) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this
Section 6.01.
(e) The Indenture Trustee shall not be liable for interest on any
money received by it except as the Indenture Trustee may agree in writing with
the Issuer.
(f) Money held in trust by the Indenture Trustee shall be segregated
from other funds except to the extent permitted by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability
is not reasonably assured to it; provided, however, that the Indenture Trustee
shall not refuse or fail to perform any of its duties hereunder solely as a
result of nonpayment of its normal fees and expenses and provided, further,
that nothing in this Section 6.01(g) shall be construed to limit the exercise
by the Indenture Trustee of any right or remedy permitted under this Indenture
or otherwise in the event of the Issuer's failure to pay the Indenture
Trustee's fees and expenses pursuant to Section 6.07 hereof. In determining
that such repayment or indemnity is not reasonably assured to it, the
Indenture Trustee must consider not only the likelihood of repayment or
indemnity by or on behalf of the Issuer but also the likelihood of repayment
or indemnity from amounts payable to it from the Collateral pursuant to
Section 6.07 hereof.
(h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of
the TIA.
(i) The Indenture Trustee shall not be required to take notice or be
deemed to have notice or knowledge of any Event of Default (other than an
Event of Default pursuant to Section 5.01(a)(i) or (ii) hereof) unless a
Responsible Officer of the Indenture Trustee shall have received written
notice thereof or otherwise shall have actual knowledge thereof. In the
absence of receipt of notice or such knowledge, the Indenture Trustee may
conclusively assume that there is no Event of Default.
(j) The Administrator, on behalf of the Indenture Trustee, shall, and
hereby agrees that it will, hold the Note Insurance Policy in trust, and will
hold any proceeds of any claim on the Note Insurance Policy in trust solely
for the use and benefit of the Noteholders.
Section 6.02. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document believed by it to
be genuine and to have been signed or presented by the proper person. The
Indenture Trustee need not investigate any fact or matter stated in any such
document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel from the appropriate
party. The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on an Officer's Certificate or Opinion
of Counsel from the appropriate party.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee. Notwithstanding anything to the
contrary herein, the Indenture Trustee shall remain liable for the performance
of any of its obligations hereunder or under the Basic Documents.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within
its rights or powers; provided, however, that such action or omission by the
Indenture Trustee does not constitute willful misconduct, negligence or bad
faith. Subject to the provisions of this Indenture, in no event shall the
appointment of any Custodian pursuant to a Custodial Agreement diminish the
obligations of the Indenture Trustee hereunder.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability with respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
Section 6.03. Individual Rights of Indenture Trustee. The Indenture
Trustee in its individual or any other capacity other than as Indenture
Trustee may become the owner or pledgee of Notes and may otherwise deal with
the Issuer or its Affiliates with the same rights it would have if it were not
Indenture Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying
agent may do the same with like rights. However, the Indenture Trustee must
comply with Sections 6.11 and 6.12 hereof.
Section 6.04. Indenture Trustee's Disclaimer. The Indenture Trustee
shall not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Notes, and shall not be accountable for the
Issuer's use of the proceeds from the Notes or responsible for any statement
of the Issuer in the Indenture or in any document issued in connection with
the sale of the Notes or in the Notes other than the Indenture Trustee's
certificate of authentication.
Section 6.05. Notices of Default. If a Default occurs and is
continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall mail to the Note Insurer notice of the
Default after it occurs and each Noteholder notice of the Default within 90
days after it occurs. Except in the case of a Default in payment of principal
of or interest on any Note (including payments pursuant to the mandatory
redemption provisions of such Note), the Indenture Trustee may withhold the
notice if and so long as a committee of its Responsible Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
Section 6.06. Reports by Indenture Trustee to Holders. The Indenture
Trustee shall deliver to each Noteholder such information as may be required
to enable such Holder to prepare its federal and state income tax returns.
Section 6.07. Compensation and Indemnity. As compensation for its
services hereunder, the Indenture Trustee shall be entitled to receive, on
each Distribution Date, investment income from the Note Distribution Account
and the Certificate Distribution Account as specified in Section 6.01 of the
Sale and Servicing Agreement (which compensation shall not be limited by any
law on compensation of a trustee of an express trust). The Seller agrees to
indemnify the Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the
administration of this trust and the performance of its duties hereunder or
any of the other Basic Documents. The Indenture Trustee shall notify the
Issuer, the Note Insurer and the Seller promptly of any claim for which it may
seek indemnity. Failure by the Indenture Trustee so to notify the Issuer and
the Seller shall not relieve the Issuer or the Seller of its obligations
hereunder. The Issuer shall or shall cause the Seller to defend any such
claim, and the Indenture Trustee may have separate counsel reasonably
acceptable to the Seller and the Issuer shall or shall cause the Seller to pay
the reasonable fees and expenses of such counsel. Neither the Issuer nor the
Seller need reimburse any expense or indemnify against any loss, liability or
expense incurred by the Indenture Trustee through the Indenture Trustee's own
willful misconduct, negligence or bad faith.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses in connection with the occurrence of a
Default specified in Section 5.01(a)(v) or (vi) hereof with respect to the
Issuer, the expenses are intended to constitute expenses of administration
under Title 11 of the United States Code or any other applicable federal or
state bankruptcy, insolvency or similar law.
Section 6.08. Replacement of Indenture Trustee. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture
Trustee may resign at any time by so notifying the Issuer and the Note
Insurer. The Note Insurer or the Holders of a Majority of the Voting Interests
of the Outstanding Notes with the consent of the Note Insurer may remove the
Indenture Trustee by so notifying the Indenture Trustee and may appoint a
successor Indenture Trustee acceptable to the Note Insurer. The Issuer shall
remove the Indenture Trustee upon the prior written consent of the Note
Insurer if:
(a) the Indenture Trustee fails to comply with Section 6.11 hereof;
(b) the Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Indenture
Trustee or its property;
(d) the Indenture Trustee otherwise becomes incapable of acting; or
(e) the Indenture Trustee breaches any representation or warranty or
covenant made by it under any Basic Document.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Note Insurer may and if it fails to the Issuer shall promptly appoint a
successor Indenture Trustee acceptable to the Note Insurer that satisfies the
eligibility requirements of Section 6.11.
The resigning or removed Indenture Trustee shall cooperate with the
Servicer and any successor Indenture Trustee in effecting the termination of
the resigning or removed Indenture Trustee's responsibilities and rights
hereunder and shall promptly provide such successor Indenture Trustee all
documents and records reasonably requested by it to enable it to assume the
Indenture Trustee's functions hereunder. The successor Indenture Trustee shall
deliver a written acceptance of its appointment to the retiring Indenture
Trustee, the Note Insurer and to the Issuer. Thereupon the resignation or
removal of the retiring Indenture Trustee shall become effective, and the
successor Indenture Trustee shall have all the rights, powers and duties of
the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee
to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Note Insurer, the Issuer or the Holders of a majority
of the Voting Interests of Outstanding Notes may petition any court of
competent jurisdiction for the appointment of a successor Indenture Trustee
acceptable to the Note Insurer. If the Indenture Trustee fails to comply with
Section 6.11 hereof, any Noteholder with the prior written consent of the Note
Insurer may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee
acceptable to the Note Insurer. Notwithstanding the replacement of the
Indenture Trustee pursuant to this Section 6.08, the Issuer's and the
Administrator's obligations under Section 6.07 hereof shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09. Successor Indenture Trustee by Merger. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, however, that such corporation or banking association shall be
acceptable to the Note Insurer and otherwise be qualified and eligible under
Section 6.11 hereof. The Indenture Trustee shall provide the Note Insurer and
the Rating Agencies prior written notice of any such transaction.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the Indenture Trustee
may adopt the certificate of authentication of any predecessor trustee, and
deliver such Notes so authenticated; and in case at that time any of the Notes
shall not have been authenticated, any successor to the Indenture Trustee may
authenticate such Notes either in the name of any predecessor hereunder or in
the name of the successor to the Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the Indenture Trustee shall
have.
Section 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee. (a) Notwithstanding any other provisions of this Indenture,
at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Collateral may at the time be located,
the Indenture Trustee shall have the power, with the prior written consent of
the Note Insurer, and may execute and deliver all instruments to appoint one
or more Persons to act as a co-trustee or co- trustees, or separate trustee or
separate trustees, of all or any part of the Trust Estate, and to vest in such
Person or Persons, in such capacity and for the benefit of the Noteholders and
the Note Insurer such title to the Collateral, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee or the Note Insurer
may consider necessary or desirable. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 6.11 hereof and no notice to Noteholders of the
appointment of any co-trustee or separate trustee shall be required under
Section 6.08 hereof; provided that the Indenture Trustee shall deliver notice
of any such co-trustee or separate trustee to the Note Insurer.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee is not authorized to act
separately without the Indenture Trustee joining in such act),
except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed the Indenture Trustee
shall be incompetent or unqualified to perform such act or acts, in
which event such rights, powers, duties and obligations (including
the holding of title to the Collateral or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, jointly
with the Indenture Trustee, subject to all the provisions of this Indenture,
specifically including every provision of this Indenture relating to the
conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co- trustee shall die, become incapable of acting, resign or be removed, all
of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without
the appointment of a new or successor trustee.
Section 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee shall be acceptable to the Note Insurer and shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition and it or its parent shall have a
long-term debt rating of not less than "A" by S&P or shall otherwise be
acceptable to each Rating Agency. The Indenture Trustee shall comply with TIA
Section 310(b), including the optional provision permitted by the second
sentence of TIA Section 310(b)(9); provided, however, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee which has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
Section 6.13. Appointment of Agent. The Indenture Trustee hereby
appoints Bankers Trust Company as its agent (referred to in the Basic
Documents as the "Administrator") and, as necessary, its attorney in fact, for
the purpose of performing the duties of the Indenture Trustee under this
Agreement and the Custodial Agreement relating to compliance with tax
requirements and related reporting obligations, SEC reporting, distributions
and related reporting requirements, registration, execution and authentication
of Notes in its capacity as Note Registrar, establishment and maintenance of
accounts and the holding of the Trust Estate (other than the Mortgage Files),
and such other obligations as are set forth in the Agency Agreement, including
but not limited to those obligations set forth in Section 6.01 of this
Agreement.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS'
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses
of Noteholders. The Issuer will furnish or cause to be furnished to the
Indenture Trustee (a) not more than five days after each Record Date, a list,
in such form as the Indenture Trustee may reasonably require, of the names and
addresses of the Holders of Notes as of such Record Date, (b) at such other
times as the Indenture Trustee may request in writing, within 30 days after
receipt by the Issuer of any such request, a list of similar form and content
as of a date not more than 10 days prior to the time such list is furnished;
provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished. The Indenture
Trustee, or if the Indenture Trustee is no longer the Note Registrar, the
Issuer shall furnish to the Note Insurer in writing on an annual basis and at
such times as the Note Insurer shall request a copy of the list of
Noteholders.
Section 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as
provided in Section 7.01 hereof and the names and addresses of Holders of
Notes received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in such
Section 7.01 upon receipt of a new list so furnished.
The Indenture Trustee shall make such list available to the Note Insurer upon
request.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under
the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
Section 7.03. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee and 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 from time to time by rules and
regulations prescribe) that the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee, the Note Insurer and the
Commission in accordance with the rules and regulations prescribed
from time to time by the Commission such additional information,
documents and reports with respect to compliance by the Issuer with
the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in TIA
Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i)
and (ii) of this Section 7.03(a) and by rules and regulations
prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA
Section 313(a), within 60 days after each March 1, beginning with March 1,
2000, the Indenture Trustee shall mail to the Note Insurer and each Noteholder
as required by TIA Section 313(c) a brief report dated as of such date that
complies with TIA Section 313(a). The Indenture Trustee also shall comply with
TIA Section 313(b).
A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each securities
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any securities exchange.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money.
(a) General. Except as otherwise expressly provided herein, the
Indenture Trustee may demand payment or delivery of, and shall receive and
collect, directly and without intervention or assistance of any fiscal agent
or other intermediary, all money and other property payable to or receivable
by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee
shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default
occurs in the making of any payment or performance under any agreement or
instrument that is part of the Collateral, the Indenture Trustee may, and upon
written request of the Securities Insurer shall, take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V hereof.
(b) Claims Under Note Insurance Policy. The Notes will be insured by
the Note Insurance Policy pursuant to the terms set forth therein,
notwithstanding any provisions to the contrary contained in this Indenture or
the Sale and Servicing Agreement. All amounts received under the Note
Insurance Policy shall be used solely for the payment to Noteholders of
principal and interest on the Insured Notes.
Section 8.02. Trust Accounts; Distributions. (a) On or prior to the
Closing Date, the Issuer shall cause the Servicer to establish and maintain,
or the Indenture Trustee shall establish and maintain, in the name of the
Indenture Trustee for the benefit of the Noteholders and the Note Insurer, or
on behalf of the Owner Trustee for the benefit of the Securityholders, the
Trust Accounts, as provided in the Sale and Servicing Agreement. The Issuer
shall cause the Servicer to, and the Paying Agent shall, deposit amounts into
each of the Trust Accounts in accordance with the terms hereof and the Sale
and Servicing Agreement.
(b) On each Distribution Date, to the extent funds are available in
the Note Distribution Account, the Indenture Trustee shall either retain funds
in the Note Distribution Account for distribution on such date in accordance
with Section 6.05 of the Sale and Servicing Agreement or make the withdrawals
from the Note Distribution Account and deposits into the Certificate
Distribution Account for distribution on such Distribution Date as required
pursuant to Section 6.05 of the Sale and Servicing Agreement.
(c) On each Distribution Date and each Redemption Date, to the extent
of the interest of the Indenture Trustee in the Certificate Distribution
Account (as provided in Section 6.07 of the Sale and Servicing Agreement), the
Indenture Trustee hereby authorizes the Owner Trustee or the Paying Agent, as
applicable, to make the distributions from the Certificate Distribution
Account as required pursuant to Sections 6.05 of the Sale and Servicing
Agreement.
(d) The Indenture Trustee shall make claims under the Note Insurance
Policy pursuant to Section 6.04 of the Sale and Servicing Agreement and in
accordance with the Note Insurance Policy. The Indenture Trustee shall deposit
any Insured Payment received from the Note Insurer in the Note Distribution
Account for payment to Insured Noteholders. With respect to claims under the
Note Insurance Policy for a Preference Amount, the Indenture Trustee shall
distribute such amount in accordance with the terms of the Note Insurance
Policy. All amounts received under the Note Insurance Policy shall be used
solely for the payment to Noteholders of principal and interest on the Insured
Notes.
Section 8.03. General Provisions Regarding Accounts. (a) So long as
no Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Trust Accounts shall be invested in accordance
with the provisions of the Sale and Servicing Agreement, and all income or
other gain from investments of moneys deposited in the Trust Accounts shall be
disbursed in accordance with the provisions of the Sale and Servicing
Agreement. The Issuer will not direct the Indenture Trustee to make any
investment of any funds or to sell any investment held in any of the Trust
Accounts unless the security interest Granted and perfected in such account
will continue to be perfected in such investment or the proceeds of such sale,
in either case without any further action by any Person.
(b) Subject to Section 6.01(c) hereof, the Indenture Trustee shall
not in any way be held liable by reason of any insufficiency in any of the
Trust Accounts resulting from any loss on any Eligible Investment included
therein except (i) for losses attributable to the Indenture Trustee's failure
to make payments on such Eligible Investments issued by the Indenture Trustee,
in its commercial capacity as principal obligor and not as trustee, in
accordance with their terms and (ii) as expressly provided herein or in the
Sale and Servicing Agreement.
Section 8.04. Servicer's Monthly Statements. On each Distribution
Date, the Indenture Trustee shall deliver the Servicer's Monthly Remittance
Report with respect to such Distribution Date to DTC, the Rating Agencies and
the Note Insurer.
Section 8.05. Release of Collateral. (a) Subject to the payment of
its fees and expenses pursuant to Section 6.07 hereof, the Indenture Trustee
may, and when required by the provisions of this Indenture or the Sale and
Servicing Agreement shall, execute instruments to release property from the
lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture or the Sale and Servicing Agreement. No party
relying upon an instrument executed by the Indenture Trustee as provided in
this Article VIII 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.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due to the Note Insurer, the Indenture Trustee and
the Servicer pursuant to this Indenture, the Sale and Servicing Agreement and
the Basic Documents have been paid, release any remaining portion of the
Collateral that secured the Notes from the lien of this Indenture and release
to the Issuer or any other Person entitled thereto any funds then on deposit
in the Trust Accounts. The Indenture Trustee shall release property from the
lien of this Indenture pursuant to this Subsection (b) only upon receipt by it
and the Note Insurer of an Issuer Request accompanied by an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA) Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) meeting the
applicable requirements of Section 11.01 hereof.
Section 8.06. Opinion of Counsel. The Indenture Trustee and the Note
Insurer shall receive at least seven days' prior notice when requested by the
Issuer to take any action pursuant to Section 8.05(a) hereof, accompanied by
copies of any instruments involved, and the Indenture Trustee and the Note
Insurer may also require, as a condition to such action, an Opinion of
Counsel, in form and substance satisfactory to the Indenture Trustee and the
Note Insurer, 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 and such action will not
materially and adversely impair the security for the Notes or the rights of
the Noteholders in contravention of the provisions of this Indenture;
provided, however, that such Opinion of Counsel shall not be required to
express an opinion as to the fair value of the Collateral. 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.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior
notice to the Rating Agencies and with the prior written consent of the Note
Insurer, the Issuer and the Indenture Trustee, when authorized by an Issuer
Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject
or required to be subjected to the lien of this Indenture, or to
subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer
herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of
the Holders of the Notes and the Note Insurer, or to surrender any
right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture that may be
inconsistent with any other provision herein or in any supplemental
indenture or to conform the provisions hereof to those of any
Offering Document, to obtain a rating for a Class of Securities from
a nationally recognized statistical rating organization, or to make
any other provisions with respect to matters or questions arising
under this Indenture or in any supplemental indenture; provided,
however, that such action shall not adversely affect the interests
of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the
Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration of
the trusts hereunder by more than one trustee, pursuant to the
requirements of Article VI hereof; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA.
provided, however, that no such supplemental indenture shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel stating
that entering into such supplemental indenture will not (A) result in a
"substantial modification" of the Notes under Treasury Regulation Section
1.1001.3 or adversely affect the status of the Notes as indebtedness for
federal income tax purposes or (B) cause the Trust to be subject to an entity
level tax.
The Indenture Trustee is hereby authorized to join in the execution
of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, with the prior written
consent of the Note Insurer, when authorized by an Issuer Order, may, also
without the consent of any of the Holders of the Notes but with prior consent
of the Rating Agencies, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to, or changing in any manner
or eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; provided,
however, that such action shall not, as evidenced by (i) an Opinion of Counsel
or (ii) satisfaction of the Rating Agency Condition, adversely affect in any
material respect the interests of any Noteholder.
Section 9.02. Supplemental Indentures with Consent of Noteholders.
The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior consent of the Rating Agencies, the Note Insurer
and with the consent of the Holders of not less than a majority of the Voting
Interests of the Outstanding Notes, by Act of such Holders delivered to the
Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding Note affected thereby
and the Note Insurer if affected thereby:
(a) change the date of payment of any installment of principal of or
interest on any Note, or reduce the Principal Amount (or Notional Amount)
thereof, the Interest Rate thereon or the Termination Price with respect
thereto, change the provisions of this Indenture relating to the application
of collections on, or the proceeds of the sale of, the Collateral to payment
of principal of or interest on the Notes, or change any place of payment
where, or the coin or currency in which, any Note or the interest thereon is
payable, or impair the right to institute suit for the enforcement of the
provisions of this Indenture requiring the application of funds available
therefor, as provided in Article V hereof, to the payment of any such amount
due on the Notes on or after the respective due dates thereof (or, in the case
of redemption, on or after the Redemption Date);
(b) reduce the percentage of the Voting Interests 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 certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this Indenture;
(c) modify or alter the provisions of the proviso to the definitions
of the term "Outstanding" or "Voting Interests";
(d) reduce the percentage of the Voting Interests of the Notes
required to direct the Indenture Trustee to direct the Issuer to sell or
liquidate the Collateral pursuant to Section 5.04 hereof;
(e) modify any provision of this Section except to increase any
percentage specified herein or to provide that certain additional provisions
of this Indenture or the Basic Documents cannot be modified or waived without
the consent of the Holder of each Outstanding Note affected thereby;
(f) modify any of the provisions of this Indenture in such manner as
to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Distribution Date (including the calculation
of any of the individual components of such calculation) or to affect the
rights of the Holders of Notes to the benefit of any provisions for the
mandatory redemption of the Notes contained herein; or
(g) permit the creation of any lien ranking prior to or on a parity
with the lien of this Indenture with respect to any part of the Collateral or,
except as otherwise permitted or contemplated herein, terminate the lien of
this Indenture on any property at any time subject hereto or deprive the
Holder of any Note of the security provided by the lien of this Indenture.
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.
In connection with requesting the consent of the Noteholders pursuant
to this Section 9.02, the Indenture Trustee shall mail to the Holders of the
Notes to which such amendment or supplemental indenture relates a notice
setting forth in general terms the substance of such supplemental indenture.
It shall not be necessary for any Act of Noteholders under this Section 9.02
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 9.03. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02 hereof, 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, liabilities or
immunities under this Indenture or otherwise. The Indenture Trustee shall
provide a fully executed copy of any supplemental indenture to this Indenture,
to the Note Insurer and each Rating Agency.
Section 9.04. Effect of Supplemental Indentures. Upon the execution
of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and shall be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities and
immunities under this Indenture of the Indenture Trustee, the Issuer and the
Holders of the Notes shall thereafter be determined, exercised and enforced
hereunder subject in all respects to such modifications and amendments, and
all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as
then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee
shall, bear a notation in form approved by the Indenture Trustee and the Note
Insurer as to any matter provided for in such supplemental indenture. If the
Issuer or the Indenture Trustee shall so determine, new Notes so modified as
to conform, in the opinion of the Indenture Trustee and the Issuer, to any
such supplemental indenture may be prepared and executed by the Issuer and
authenticated and delivered by the Indenture Trustee in exchange for
Outstanding Notes.
Section 9.07. Amendments to Trust Agreement. Subject to Section 11.01
of the Trust Agreement, the Indenture Trustee shall, upon Issuer Order,
consent to any proposed amendment to the Trust Agreement or an amendment to or
waiver of any provision of any other document relating to the Trust Agreement,
such consent to be given without the necessity of obtaining the consent of the
Holders of any Notes but with the consent of the Note Insurer upon
satisfaction of the requirements under Section 11.1 of the Trust Agreement.
Nothing in this Section 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.
The Majority Residual Interestholders may, at their option, effect an
early redemption of the Notes on any Distribution Date on or after the
Distribution Date on which the Total Loan Balance declines to 10% or less of
the Cut-off Date Pool Balance. The Majority Residual Interestholders shall
effect such early redemption in the manner specified in and subject to the
provisions of Section 8.01 of the Sale and Servicing Agreement. If the
Majority Residual Interestholders do not exercise such option within three
calendar months of the date in which it is first entitled to do so, the Note
Insurer shall have the option to effect such early redemption in the manner
specified in and subject to the provisions of Section 8.01 of the Sale and
Servicing Agreement.
The Indenture Trustee shall furnish the Rating Agencies and the Note
Insurer notice of any such redemption in accordance with Section 10.02 hereof.
Section 10.02. Form of Redemption Notice. Notice of redemption under
Section 10.01 hereof shall be given by the Indenture Trustee by first- class
mail, postage prepaid, or by facsimile mailed or transmitted not later than 10
days prior to the applicable Redemption Date to the Note Insurer and each
Holder of Notes, as of the close of business on the Record Date preceding the
applicable Redemption Date, at such Holder's address or facsimile number
appearing in the Note Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Termination Price; and
(c) the place where such Notes are to be surrendered for payment of
the Termination Price (which shall be the office or agency of the Issuer to be
maintained as provided in Section 3.02 hereof).
Notice of redemption of the Notes shall be given by the Indenture
Trustee in the name of the Issuer and at the expense of the Servicer. Failure
to give to any Holder of any Note notice of redemption, or any defect therein,
shall not impair or affect the validity of the redemption of any other Note.
Section 10.03. Notes Payable on Redemption Date; Provision for
Payment of Indenture Trustee and Note Insurer. The Notes to be redeemed shall,
following notice of redemption as required by Section 10.02 hereof (in the
case of redemption pursuant to Section 10.01) hereof, on the Redemption Date
become due and payable at the Termination Price and (unless the Issuer shall
default in the payment of the Termination Price) no interest shall accrue
thereon for any period after the date to which accrued interest is calculated
for purposes of calculating the Termination Price. The Issuer may not redeem
the Notes unless (i) all outstanding obligations under the Notes have been
paid in full and (ii) the Indenture Trustee has been paid all amounts to which
it is entitled hereunder and the Note Insurer has been paid all Reimbursement
Amounts to which it is entitled as of the applicable Redemption Date.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc. (a) Upon
any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture (except with respect to the
Servicer's servicing activity in the ordinary course of its business), the
Issuer shall furnish to the Indenture Trustee and the Note Insurer (i) an
Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with,
(ii) an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent, if any, have been complied with and (iii) (if
required by the TIA) an Independent Certificate from a firm of certified
public accountants meeting the applicable requirements of this Section, except
that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(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 or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as
to whether or not such covenant or condition has been complied with;
and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.01(a)
hereof or elsewhere in this Indenture, furnish to the Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited.
(c) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in subsection (b) above, the Issuer
shall also deliver to the Indenture Trustee and the Note Insurer an
Independent Certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the commencement of the
then-current fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to subsection (b) above and this subsection (c), is 10% or
more of the Outstanding Amount of the Notes, but such a certificate need not
be furnished with respect to any securities so deposited, if the fair value
thereof to the Issuer as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the Outstanding Amount of the
Notes.
(d) Whenever any property or securities are to be released from the
lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee
and the Note Insurer an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair value (within
90 days of such release) of the property or securities proposed to be released
and stating that in the opinion of such person the proposed release will not
impair the security under this Indenture in contravention of the provisions
hereof.
(e) Whenever the Issuer is required to furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of any
signer thereof as to the matters described in subsection (d) above, the Issuer
shall also furnish to the Indenture Trustee and the Note Insurer an
Independent Certificate as to the same matters if the fair value of the
property or securities and of all other property, other than securities
released from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required by
subsection (d) above and this subsection (e), equals 10% or more of the
Outstanding Amount of the Notes, but such certificate need not be furnished in
the case of any release of property or securities if the fair value thereof as
set forth in the related Officer's Certificate is less than $25,000 or less
than one percent of the then Outstanding Amount of the Notes.
Section 11.02. 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 an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or Opinion of Counsel may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Servicer, the Depositor, the Issuer or the
Administrator, stating that the information with respect to such factual
matters is in the possession of the Servicer, the Depositor, the Issuer or the
Administrator, unless such counsel knows, or in the exercise of reasonable
care should know, that the certificate or opinion or representations with
respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application
or at the effective date of such certificate or report (as the case may be),
of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application
granted or to the sufficiency of such certificate or report. The foregoing
shall not, however, be construed to affect the Indenture Trustee's right to
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI hereof.
Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided, such action shall become effective
when such instrument or instruments are delivered to the Indenture Trustee,
and, where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument
or instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this
Indenture and (subject to Section 6.01 hereof) 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 in any manner that the Indenture Trustee
deems sufficient.
(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 Holder of any Notes shall bind the Holder of
every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
Section 11.04. Notices, etc., to Indenture Trustee, Issuer, Rating
Agencies and Note Insurer. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture shall be in writing and if such request, demand,
authorization, direction, notice, consent, waiver or act of Noteholders is to
be made upon, given or furnished to or filed with:
(a) the Indenture Trustee by any Noteholder, the Note Insurer or by
the Issuer shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at its
Corporate Trust Office, or
(b) the Issuer by the Indenture Trustee, the Note Insurer or by any
Noteholder shall be sufficient for every purpose hereunder if in writing and
made, given, furnished or filed with the Issuer addressed to: ACE Securities
Corp. Home Loan Trust 1999-A, in care of Wilmington Trust Company, Rodney
Square North, 1100 North Market Street, Wilmington, Delaware 19890, Attention:
Emmet R. Harmon, or at any other address previously furnished in writing to
the Indenture Trustee by the Issuer or the Administrator. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee.
Notices required to be given to the Rating Agencies and the Note
Insurer by the Issuer, the Indenture Trustee or the Owner Trustee shall be in
writing, personally delivered or mailed by certified mail, return receipt
requested, to the applicable address specified in the Sale and Servicing
Agreement.
Section 11.05. Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner
herein provided shall conclusively be presumed to have duly been given.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default
or Event of Default.
Section 11.06. Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the
Trust Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on
any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
Section 11.07. Effect of Headings and Table of Contents. The Article
and Section headings herein and the Table of Contents are for convenience only
and shall not affect the construction hereof.
Section 11.08. Successors and Assigns. All covenants and agreements
in this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
Section 11.09. Separability. In case any provision in this Indenture
or in the Notes shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
Section 11.10. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder, and the Noteholders, and any
other party secured hereunder, and any other Person with an ownership interest
in any part of the Collateral, any benefit or any legal or equitable right,
remedy or claim under this Indenture. Each Noteholder and Note Owner, by
acceptance of a Note or, in the case of a Note Owner, a beneficial interest in
a Note, consents to and agrees to be bound by the terms and conditions of this
Indenture.
Section 11.11. Legal Holidays. In any case where the date on which
any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the date on which nominally due, and no
interest shall accrue for the period from and after any such nominal date.
Section 11.12. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND TO THE EXTENT PERMITTED
BY LAW WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
Section 11.13. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.14. Recording of Indenture. If this Indenture is subject
to recording in any appropriate public recording offices, such recording is to
be effected by the Issuer and at its expense of the Servicer accompanied by an
Opinion of Counsel (which may be counsel to the Indenture Trustee or any other
counsel reasonably acceptable to the Indenture Trustee and the Note Insurer)
to the effect that such recording is necessary either for the protection of
the Noteholders or any other Person secured hereunder or for the enforcement
of any right or remedy granted to the Indenture Trustee under this Indenture.
Section 11.15. Trust 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, except as expressly provided
for in Article VI hereof, under this Indenture or any certificate or other
writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may expressly have 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 Articles VI, VII
and VIII of the Trust Agreement.
Section 11.16. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder, by accepting a Note, hereby covenant and
agree that they will not at any time institute against the Depositor, the
Servicer or the Issuer, or join in any institution against the Depositor, the
Servicer 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
Section 11.17. Inspection. The Issuer agrees that, on reasonable
prior notice, it will permit any representative of the Indenture Trustee or
the Note Insurer, during the Issuer's normal business hours, to examine all
the books of account, records, reports and other papers of the Issuer, to make
copies and extracts therefrom, to cause such books to be audited by
Independent certified public accountants, and to discuss the Issuer's affairs,
finances and accounts with the Issuer's officers, employees, and Independent
certified public accountants, all at such reasonable times and as often as may
reasonably be requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information except to the
extent disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
Section 11.18. Grant of Noteholder Rights to Note Insurer. In
consideration for the guarantee of the Insured Notes by the Note Insurer
pursuant to the Note Insurance Policy, the Noteholders hereby grant to the
Note Insurer the right to act as the holder of 100% of the Outstanding Notes
for the purpose of exercising the rights of the Holders of the Notes
hereunder, including the voting rights of such Holders, but excluding those
rights to distributions under Section 8.02 hereof; provided that the preceding
grant of rights to the Note Insurer by the Noteholders shall be subject to
Section 11.20 hereof. The rights of the Note Insurer to direct certain actions
and consent to certain actions of the Noteholders hereunder will terminate at
such time as the Class Principal Amount of each Class of Insured Notes has
been reduced to zero and the Note Insurer has been reimbursed for all Insured
Payments and any other amounts owed under the Note Insurance Policy and the
Insurance Agreement and the Note Insurer has no further obligation under the
Note Insurance Policy.
Section 11.19. Third Party Beneficiary. The parties hereto
acknowledge that the Note Insurer is an express third party beneficiary hereof
entitled to enforce any rights reserved to it hereunder as if it were actually
a party hereto.
Section 11.20. Suspension and Termination of Note Insurer's Rights.
(a) During the continuation of a Note Insurer Default, rights granted or
reserved to the Note Insurer hereunder shall vest instead in the Noteholders;
provided that the Note Insurer shall be entitled to any distributions in
reimbursement of the Note Insurer Reimbursement Amount, and the Note Insurer
shall retain those rights under Section 9.02 hereof to consent to any
supplement to this Indenture.
(b) At such time at either (i) the Class Principal Amount of each
Class of Insured Notes has been reduced to zero or (ii) the Note Insurance
Policy has been terminated following a Note Insurer Default, and in case of
either (i) or (ii) the Note Insurer has been reimbursed for all Insured
Payments and any other amounts owed under the Note Insurance Policy and the
Insurance Agreement (and the Note Insurer no longer has any obligation under
the Note Insurance Policy, except for breach thereof by the Note Insurer),
then the rights and benefits granted or reserved to the Note Insurer hereunder
(including the rights to direct certain actions and receive certain notices)
shall terminate and the Noteholders shall be entitled to exercise of such
rights and to receive such benefits of the Note Insurer following such
termination to the extent that such rights and benefits are applicable to the
Noteholders.
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
this Indenture to be duly executed by their respective officers, thereunto
duly authorized and duly attested, all as of the day and year first above
written.
ACE SECURITIES CORP. HOME LOAN
TRUST 1999-A, as Issuer
By: WILMINGTON TRUST COMPANY,
not in its individual capacity but
solely as Owner Trustee
By:
-----------------------------
Name:
Title:
FIRST UNION NATIONAL BANK,
as Indenture Trustee
By:
-----------------------------
Name:
Title:
Accepted and Agreed to for
purposes of Section 6.07 only:
GERMAN AMERICAN CAPITAL CORPORATION,
as Seller
By:
-----------------------------
Name:
Title:
STATE OF DELAWARE )
)
COUNTY OF NEW CASTLE )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared ___________________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of the
said ___________, not in its individual capacity, but solely as Owner Trustee
on behalf of ACE SECURITIES CORP. HOME LOAN TRUST 1999-A, a Delaware business
trust, and that such person executed the same as the act of said business
trust for the purpose and consideration therein expressed, and in the
capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of __________,
1999.
Notary Public in and for the State of Delaware My commission expires:
STATE OF NORTH CAROLINA )
)
COUNTY OF )
BEFORE ME, the undersigned authority, a Notary Public in and for said
county and state, on this day personally appeared __________________________,
known to me to be the person and officer whose name is subscribed to the
foregoing instrument and acknowledged to me that the same was the act of
___________________, a ________________________, and that such person executed
the same as the act of said corporation for the purpose and consideration
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ___ day of
_________,1999.
Notary Public in and for the State of North Carolina (Seal)
My commission expires:
EXHIBIT A
FORM OF NOTES