EXHIBIT 4.2
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INDENTURE
BETWEEN
[___________________] LOAN TRUST 200 - ,
AS ISSUER,
AND
[_______________________],
AS INDENTURE TRUSTEE
Dated as of _________, 200__
Relating to
[__________________] TRUST 200 -
MORTGAGE BACKED NOTES, SERIES 200 -
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS....................................................................................2
Section 1.01. General Definitions.................................................................2
ARTICLE II THE NOTES....................................................................................25
Section 2.01. Forms Generally....................................................................25
Section 2.02. Forms of Certificate of Authentication.............................................25
Section 2.03. General Provisions With Respect to Principal and Interest Payment..................26
Section 2.04. Denominations......................................................................26
Section 2.05. Execution, Authentication, Delivery and Dating.....................................27
Section 2.06. Registration, Registration of Transfer and Exchange................................27
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes.........................................28
Section 2.08. Payments of Principal and Interest.................................................29
Section 2.09. Persons Deemed Owner...............................................................31
Section 2.10. Cancellation.......................................................................31
Section 2.11. Authentication and Delivery of Notes...............................................31
Section 2.12. Book-Entry Note....................................................................33
Section 2.13. Termination of Book Entry System...................................................33
ARTICLE III COVENANTS...................................................................................34
Section 3.01. Payment of Notes...................................................................34
Section 3.02. Maintenance of Office or Agency....................................................34
Section 3.03. Money for Note Payments to Be Held In Trust........................................34
Section 3.04. Existence of Issuer................................................................36
Section 3.05. Protection of Trust Estate.........................................................37
Section 3.06. Annual Opinions as to Collateral...................................................37
Section 3.07. Performance of Obligations; Servicing Agreement....................................38
Section 3.08. Investment Company Act.............................................................38
Section 3.09. Negative Covenants.................................................................38
Section 3.10. Annual Statement as to Compliance..................................................39
Section 3.11. Restricted Payments................................................................40
Section 3.12. Treatment of Notes as Debt for Tax Purposes........................................40
Section 3.13. Notice of Events of Default........................................................40
Section 3.14. Further Instruments and Acts.......................................................40
ARTICLE IV SATISFACTION AND DISCHARGE...................................................................40
Section 4.01. Satisfaction and Discharge of Indenture............................................40
Section 4.02. Application of Trust Money.........................................................42
ARTICLE V DEFAULTS AND REMEDIES.........................................................................42
Section 5.01. Event of Default...................................................................42
Section 5.02. Acceleration of Maturity; Rescission and Annulment.................................43
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Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..........44
Section 5.04. Remedies...........................................................................44
Section 5.05. Indenture Trustee May File Proofs of Claim.........................................45
Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes...................46
Section 5.07. Application of Money Collected.....................................................46
Section 5.08. Limitation on Suits................................................................47
Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest..............48
Section 5.10. Restoration of Rights and Remedies.................................................48
Section 5.11. Rights and Remedies Cumulative.....................................................48
Section 5.12. Delay or Omission Not Waiver.......................................................48
Section 5.13. Control by Noteholders.............................................................49
Section 5.14. Waiver of Past Defaults............................................................49
Section 5.15. Undertaking for Costs..............................................................49
Section 5.16. Waiver of Stay or Extension Laws...................................................50
Section 5.17. Sale of Trust Estate...............................................................50
Section 5.18. Action on Notes....................................................................51
Section 5.19. No Recourse to Other Trust Estates or Other Assets of the Issuer...................52
Section 5.20. Application of the Trust Indenture Act.............................................52
ARTICLE VI THE INDENTURE TRUSTEE........................................................................52
Section 6.01. Duties of Indenture Trustee........................................................52
Section 6.02. Notice of Default..................................................................53
Section 6.03. Rights of Indenture Trustee........................................................54
Section 6.04. Not Responsible for Recitals or Issuance of Notes..................................54
Section 6.05. May Hold Notes.....................................................................54
Section 6.06. Money Held in Trust................................................................54
Section 6.07. Eligibility, Disqualification......................................................55
Section 6.08. Indenture Trustee's Capital and Surplus............................................55
Section 6.09. Resignation and Removal; Appointment of Successor..................................55
Section 6.10. Acceptance of Appointment by Successor.............................................56
Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee...57
Section 6.12. Preferential Collection of Claims Against Issuer...................................57
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees..............................57
Section 6.14. Authenticating Agents..............................................................59
Section 6.15. Review of Mortgage Files...........................................................60
Section 6.16. Indenture Trustee Fees and Expenses................................................62
Section 6.17. Tax Reporting......................................................................62
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS..............................................................62
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders.............62
Section 7.02. Preservation of Information; Communications to Noteholders.........................62
Section 7.03. Reports by Indenture Trustee.......................................................63
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Section 7.04. Reports by Issuer..................................................................63
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES.................................63
Section 8.01. Collection of Moneys...............................................................63
Section 8.02. Note Account; Distributions........................................................64
Section 8.03. Claims Upon the Insurance Policy; Insurance Policy Payments Account................66
Section 8.04. General Provisions Regarding the Note Accounts and Mortgage Loans..................68
Section 8.05. Releases of Defective Mortgage Loans...............................................69
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information.........69
Section 8.07. Trust Estate Mortgage Files........................................................70
Section 8.08. Amendment to Servicing Agreement...................................................70
Section 8.09. Delivery of the Mortgage Files Pursuant to Servicing Agreement.....................70
Section 8.10. Servicer as Agent..................................................................71
Section 8.11. Termination of Servicer............................................................71
Section 8.12. Opinion of Counsel.................................................................71
Section 8.13. Appointment of Custodians..........................................................71
Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders.......................72
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer.....................72
Section 8.16. [Reserved.]........................................................................73
ARTICLE IX SUPPLEMENTAL INDENTURES......................................................................73
Section 9.01. Supplemental Indentures Without Consent of Noteholders.............................73
Section 9.02. Supplemental Indentures With Consent of Noteholders................................74
Section 9.03. Execution of Supplemental Indentures...............................................75
Section 9.04. Effect of Supplemental Indentures..................................................75
Section 9.05. Conformity With Trust Indenture Act................................................75
Section 9.06. Reference in Notes to Supplemental Indentures......................................76
Section 9.07. Amendments to Governing Documents..................................................76
ARTICLE X REDEMPTION OF NOTES...........................................................................76
Section 10.01. Redemption........................................................................76
Section 10.02. Form of Redemption Notice.........................................................77
Section 10.03. Notes Payable on Optional Redemption..............................................78
ARTICLE XI MISCELLANEOUS................................................................................78
Section 11.01. Compliance Certificates and Opinions..............................................78
Section 11.02. Form of Documents Delivered to Indenture Trustee..................................79
Section 11.03. Acts of Noteholders...............................................................79
Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and Issuer..................80
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.............................81
Section 11.06. Rules by Indenture Trustee........................................................82
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Section 11.07. Conflict With Trust Indenture Act.................................................82
Section 11.08. Effect of Headings and Table of Contents..........................................82
Section 11.09. Successors and Assigns............................................................82
Section 11.10. Separability......................................................................82
Section 11.11. Benefits of Indenture.............................................................82
Section 11.12. Legal Holidays....................................................................82
Section 11.13. Governing Law.....................................................................83
Section 11.14. Counterparts......................................................................83
Section 11.15. Recording of Indenture............................................................83
Section 11.16. Issuer Obligation.................................................................83
Section 11.17. No Petition.......................................................................83
Section 11.18. Inspection........................................................................84
Section 11.19. Usury.............................................................................84
Section 11.20. Third Party Beneficiary...........................................................84
SCHEDULES AND EXHIBITS
Schedule l........Mortgage Loan Schedule
Exhibit A.........Form of Note
Exhibit B.........Insurance Policy
Exhibit C.........Form of Notice of Claim
Exhibit D.........PMI Mortgage Loans
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CROSS-REFERENCE TABLE
Cross-reference sheet showing the location in the Indenture of the
provisions inserted pursuant to Sections 310 through 318(a) inclusive of the
Trust Indenture Act of 1939.1
Trust Indenture Act of 1939 Indenture Section
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Section 310
(a) (1)........................................... 6.07
(a) (2)........................................... 6.07, 6.08
(a) (3)........................................... 6.13
(a) (4)........................................... Not Applicable
(a) (5)........................................... 6.07
(b)............................................... 6.07, 6.09
(c)............................................... Not Applicable
Section 311
(a)............................................... 6.12
(b)............................................... 6.12
(c)............................................... Not Applicable
Section 312
(a)............................................... 7.01(a), 7.02(a)
(b)............................................... 7.02(b)
(c)............................................... 7.02(c)
Section 313
(a)............................................... 7.03(a)
(b)............................................... 7.03(a)
(c)............................................... 11.05
(d)............................................... 7.03(b)
Section 314
(a)(1)............................................ 7.04
(a)(2)............................................ 7.04
(a)(3)............................................ 7.04
(a)(4)............................................ 7.04
(b)(1)............................................ 2.11(c), 11.01
(b)(2)............................................ 3.06
(c)(1)............................................ 2.11(d), 4.01,
8.02(d), 11.01
(c)(2)............................................
2.11(c), 4.01, 8.02(d), 11.01
(c)(3)............................................ 8.02(d)
(d)(1)............................................ 11.01(a)
(d)(2)............................................ 11.01(a)
(d)(3)............................................ 11.01(a)
(e)............................................... 11.0 1(b)
Section 315
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* This Cross-Reference Table is not part of the Indenture.
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(a)...............................................6.01(b), 6.01(c)(1)
(b)............................................... 6.02, 11.05
(c)............................................... 6.01(a)
(d)(1)............................................ 6.01(b), 6.01(c)
(d)(2)............................................ 6.01(c)(2)
(d)(3)............................................ 6.01(c)(3)
(e)............................................... 5.15
Section 316
(a)............................................... 5.20
(b)............................................... 5.09
(c)............................................... 5.20
Section 317
(a)(1)............................................ 5.03
(a)(2)............................................ 5.05
(b)............................................... 3.01
Section 318
(a)............................................... 11.07
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THIS INDENTURE, dated as of (as amended or supplemented from time to time
as permitted hereby, this "Indenture"), is between TRUST 200 - , a Delaware
statutory trust (together with its permitted successors and assigns, the
"Issuer") and , as indenture trustee (together with its permitted successors in
the trusts hereunder, the "Indenture Trustee").
Preliminary Statement
The Issuer has duly authorized the execution and delivery of this Indenture
to provide for its Mortgage Backed Notes, Series 200 - (the "Notes"), issuable
as provided in this Indenture. All covenants and agreements made by the Issuer
herein are for the benefit and security of the Holders of the Notes and the Note
Insurer. The Issuer is entering into this Indenture, and the Indenture Trustee
is accepting the trusts created hereby, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
Granting Clause
The Issuer hereby Grants to the Indenture Trustee, for the exclusive
benefit of the Holders of the Notes and the Note Insurer, all of the Issuer's
right, title and interest in and to (a) the Mortgage Loans listed in Schedule I
to this Indenture (including property that secures a Mortgage Loan that becomes
an REO Property), including the related Mortgage Files delivered or to be
delivered to the Custodian, on behalf of the Indenture Trustee, pursuant to the
Mortgage Loan Sale Agreement, all payments of principal received, collected or
otherwise recovered after the Cut-off Date for each Mortgage Loan, all payments
of interest accruing on each Mortgage Loan after the Cut-off Date therefor
whenever received and all other proceeds received in respect of such Mortgage
Loans, and any Qualified Replacement Mortgage Loan, (b) the Servicing Agreement,
(c) the Mortgage Loan Sale Agreement, (d) the Mortgage Loan Contribution
Agreement, (e) the Management Agreement, (f) the Other Insurance Policies, (g)
all cash, instruments or other property held or required to be deposited in the
Collection Account and the Note Account, including all investments made with
funds in such accounts (but not including any income on funds deposited in, or
investments made with funds deposited in, the Collection Account and the Note
Account, which income shall belong to and be for the account of the Servicer),
and (h) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid assets, including, without limitation, all
insurance proceeds and condemnation awards. Such Grants are made, however, in
trust, to secure the Notes equally and ratably without prejudice, priority or
distinction between any Note and any other Note by reason of difference in time
of issuance or otherwise, and for the benefit of the Note Insurer to secure (x)
the payment of all amounts due on the Notes in accordance with their terms, (y)
the payment of all other sums payable under this Indenture and (z) compliance
with the provisions of this Indenture, all as provided in this Indenture. All
terms used in the foregoing granting clauses that are defined in Section 1.01
are used with the meanings given in said Section.
The Indenture Trustee acknowledges such Grant, accepts the trusts hereunder
in accordance with the provisions of this Indenture and agrees to perform the
duties herein required
to the end that the interests of the Holders of the Notes may be adequately and
effectively protected. The Indenture Trustee agrees that it will hold the
Insurance Policy and the PMI Policy in trust and that it will hold any proceeds
of any claim upon the Insurance Policy and PMI Policy, solely for the use and
benefit of the Noteholders in accordance with the terms hereof and the Insurance
Policy and the PMI Policy, respectively.
ARTICLE I
DEFINITIONS
Section 1.01. .General Definitions.
Except as otherwise specified or as the context may otherwise require, the
following terms have the respective meanings set forth below for all purposes of
this Indenture, and the definitions of such terms are applicable to the singular
as well as to the plural forms of such terms and to the masculine as well as to
the feminine genders of such terms. Whenever reference is made herein to an
Event of Default or a Default known to the Indenture Trustee or of which the
Indenture Trustee has notice or knowledge, such reference shall be construed to
refer only to an Event of Default or Default of which the Indenture Trustee is
deemed to have notice or knowledge pursuant to Section 6.01(d). All other terms
used herein that are defined in the Trust Indenture Act (as hereinafter
defined), either directly or by reference therein, have the meanings assigned to
them therein.
"Accountant": A Person engaged in the practice of accounting who (except
when this Indenture provides that an Accountant must be Independent) may be
employed by or affiliated with the Issuer or an Affiliate of the Issuer.
"Act": With respect to any Noteholder, as defined in Section 11.03.
"Administrative Fee Amount": For the Notes and any Payment Date, the sum of
the Monthly Servicing Fee and the Indenture Trustee's Fee, each relating to such
Payment Date.
"Affiliate": With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract, relation to individuals or otherwise, and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Agent": Any Note Registrar, Paying Agent, Authenticating Agent or
Custodian.
"Aggregate Principal Balance": With respect to the Mortgage Loan Pool and
any Payment Date, the aggregate of the Principal Balances of the Mortgage Loans
as of the related Determination Date (or other specified date).
"Assignments": The original instrument of assignment of a Mortgage,
including any interim assignments, from the originator or any other holder of
any Mortgage Loan to the Indenture Trustee (that in each case may, to the extent
permitted by the laws of the state in which
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the related Mortgaged Property is located, be a blanket instrument of assignment
covering other Mortgages and Mortgage Notes as well and that may also be an
instrument of assignment running directly from the mortgagee of record under the
related Mortgage to the Indenture Trustee).
"Authenticating Agent": The Person, if any, appointed as Authenticating
Agent by the Issuer pursuant to Section 6.14, until any successor Authenticating
Agent for the Notes is named, and thereafter "Authenticating Agent" shall mean
such successor. The Authenticating Agent shall be the Indenture Trustee. Any
Authenticating Agent other than the Indenture Trustee shall sign an instrument
under which it agrees to be bound by all of the terms of this Indenture
applicable to the Authenticating Agent.
"Authorized Officer": With respect to (i) the Indenture Trustee, any
Responsible Officer, (ii) the Owner Trustee, the president, any vice president,
any assistant vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, any trust officer, any financial services
officer or any other officer of the Owner Trustee customarily performing
functions similar to those performed by the above officers and (iii) any other
Person, the Chairman, Chief Operating Officer, President or any Vice President
of such Person.
"Available Funds": With respect to any Payment Date, the sum of the amounts
described in clauses (a) through (g) below, less (i) the Administrative Fee
Amount in respect of such Payment Date, (ii) Monthly Advances and Servicing
Advances previously made that are reimbursable to the Servicer (other than those
included in liquidation expenses for any Liquidated Mortgage Loan and reimbursed
from the related Liquidation Proceeds and from Insurance Proceeds) with respect
to the related Collection Period to the extent permitted by the Servicing
Agreement and (iii) the aggregate amounts (A) deposited into the Collection
Account or the Note Account that may not be withdrawn therefrom pursuant to a
final and nonappealable order of a United States bankruptcy court of competent
jurisdiction imposing a stay pursuant to Section 362 of the Bankruptcy Code and
that would otherwise have been included in Available Funds on such Payment Date
and (B) received by the Indenture Trustee that are recoverable and sought to be
recovered from the Issuer as a voidable preference by a trustee in bankruptcy
pursuant to the Bankruptcy Code in accordance with a final nonappealable order
of a court of competent jurisdiction:
(a) all scheduled payments of interest received with respect to the
Mortgage Loans and due during the related Due Period and all other interest
payments on or in respect of such Mortgage Loans received by or on behalf
of the Servicer during the related Collection Period (including Payments
Ahead that are allocable to interest for the related Due Period), net of
amounts representing interest accrued on such Mortgage Loans in respect of
any period prior to the Cut-off Dates, plus any Compensating Interest
payments made by the Servicer in respect of the related Mortgage Loans and
any net income from related REO Properties for such Collection Period;
(b) all scheduled payments of principal received with respect to the
Mortgage Loans and due during the related Due Period and all other
principal payments (including Principal Prepayments and Prepayment
Premiums) received or deemed to be received
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during the related Collection Period (including Payments Ahead that are
allocable as principal for the related Due Period) in respect of such
Mortgage Loans;
(c) the aggregate of any Trust Insurance Proceeds collected by the
Servicer during the related Collection Period;
(d) the aggregate of any Net Liquidation Proceeds collected by the
Servicer during the related Collection Period;
(e) the aggregate of the Purchase Prices received in respect of any
Mortgage Loans that are required or permitted to be repurchased, released,
removed or substituted by the Seller during or in respect of the related
Collection Period, to the extent such amounts are received by the Indenture
Trustee on or before the related Deposit Date;
(f) the amount of any Monthly Advances made by the Servicer for such
Payment Date; and
(g) the aggregate of amounts deposited in the Note Account during such
Collection Period in connection with redemption of the Notes pursuant to
Article X.
"Bankruptcy Code": The Bankruptcy Reform Act of 1978 (Title 11 of the
United States Code), as amended.
"Basic Documents": This Indenture, the Trust Agreement, the Servicing
Agreement, the Mortgage Loan Sale Agreement, the Mortgage Loan Contribution
Agreement, the Management Agreement, the Insurance Agreement and the
Indemnification Agreement.
"Beneficial Owner": With respect to a Book-Entry Note, the Person who is
the beneficial owner of such Note as reflected on the books of the Clearing
Agency for the Notes or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
"Best Efforts": Efforts determined to be in good faith and reasonably
diligent by the Person performing such efforts, specifically the Issuer or the
Servicer, as the case may be, in its reasonable discretion. Such efforts do not
require the Issuer or the Servicer, as the case may be, to enter into any
litigation, arbitration or other legal or quasi-legal proceeding, nor do they
require the Issuer or the Servicer, as the case may be, to advance or expend
fees or sums of money in addition to those specifically set forth in this
Indenture and the Servicing Agreement.
"Book-Entry Notes": Any Notes registered in the name of the Clearing Agency
or its nominee, ownership of which is reflected on the books of the Clearing
Agency or on the books of a person maintaining an account with such Clearing
Agency (directly or as an indirect participant in accordance with the rules of
such Clearing Agency).
"Book-Entry Termination": The time at which the book-entry registration of
the Book-Entry Notes shall terminate, as specified in Section 2.13.
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"Business Day": Any day other than (i) a Saturday or Sunday or (ii) a day
that is either a legal holiday or a day on which the Note Insurer is closed or
on which banking institutions in the State of New York, the State of North
Carolina, the state in which the Corporate Trust Office is located or the State
of Delaware are authorized or obligated by law, regulation or executive order to
be closed.
"Certificate": As defined in the Trust Agreement.
"Certificate Distribution Account": As defined in the Trust Agreement.
"Certificateholders": As defined in the Trust Agreement.
"Clearing Agency": An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities and Exchange Act of 1934, as amended,
and the regulations of the Commission thereunder and shall initially be The
Depository Trust Company of New York, the nominee for which is Cede & Co.
"Clearing Agency Participants": The entities for whom the Clearing Agency
will maintain book-entry records of ownership and transfer of Book-Entry Notes,
which may include securities brokers and dealers, banks and trust companies and
clearing corporations and certain other organizations.
"Closing Date": _______________, the date of initial issuance of the Notes.
"Code": The Internal Revenue Code of 1986, as amended, and as may be
further amended from time to time, as successor statutes thereto, and applicable
U.S. Department of Treasury regulations issued pursuant thereto in temporary or
final form and proposed regulations thereunder to the extent that, by reason of
their proposed effective date, such proposed regulations would apply.
"Collateral": The items Granted to the Indenture Trustee under the Granting
Clause of this Indenture.
"Collection Account": The segregated trust account established by the
Servicer and maintained pursuant to Section 2.02(b) of the Servicing Agreement.
"Collection Period": As to any Payment Date, the period beginning on the
first day of the calendar month immediately preceding the month in which such
Payment Date occurs (except that, in the case of the first Payment Date, the
related Collection Period will commence on the Cut-off Date for each Mortgage
Loan) and ending on the last day of such calendar month.
"Combined Loan-to-Value Ratio": As defined in the Mortgage Loan Sale
Agreement.
"Commission": The Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, or if at any
time such Commission is not existing and performing the duties now assigned to
it under the Trust Indenture Act, then the body performing such duties at such
time under the Trust Indenture Act or similar legislation replacing the Trust
Indenture Act.
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"Compensating Interest": As defined in the Servicing Agreement.
"Corporate Trust Office": The principal office of the Indenture Trustee at
which at any particular time its corporate trust business with respect to this
Indenture shall be principally administered, which office at the date of the
execution of this Indenture is located at ____________, Attention:
__________________ Trust 200 - , Series 200 - , with a copy to the Indenture
Trustee at _______________, Attention: _______________ Loan Trust 200 .
"Cumulative Loss Percentage": As defined in the Servicing Agreement.
"Current Note Balance": With respect to any Note as of any date of
determination, the original principal amount of such Note, reduced by all prior
payments (including Insured Payments), if any, made with respect to principal of
such Note.
"Custodial Agreement": The Custody Agreement, dated as of
_________________, among the Servicer, the Custodian and the Indenture Trustee.
"Custodian": A Person who is at any time appointed by the Indenture Trustee
pursuant to Section 8.13 as a document custodian for the Mortgage Files, which
Person shall not be the Issuer or an Affiliate of the Issuer. The Custodian
shall initially be .
"Cut-off Date": ___________________.
"Default": Any occurrence that is, or with notice or the lapse of time or
both would become, an Event of Default.
"Defective Mortgage Loan": Any Mortgage Loan that is required to be
repurchased or substituted by the Seller pursuant to the Mortgage Loan Sale
Agreement.
"Deficiency Amount": With respect to the Notes and any Payment Date, (A)
the excess, if any, of (i) the Note Interest (net of any Relief Act Interest
Shortfalls and Prepayment Interest Shortfalls) for such Payment Date over (ii)
funds on deposit in the Note Account available to be distributed therefor on
such Payment Date and (B) the Guaranteed Principal Amount.
"Definitive Notes": Notes other than Book-Entry Notes.
"Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by a
Qualified Replacement Mortgage Loan.
"Delinquency Amount": As of any Payment Date, the product of the Rolling
Delinquency Percentage for such Payment Date and the Mortgage Loans as of the
average Aggregate Principal Balance of the Mortgage Loans as of the immediately
preceding three Determination Dates.
"Delinquency Percentage": For any Payment Date, the rolling three month
average of the fraction, expressed as a percentage, (i) the numerator of which
is the aggregate of the Principal Balances as of the related Determination Date
of all Mortgage Loans that were 90 or more days contractually delinquent, in
foreclosure, REO Property or for which the related
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Mortgagor was in a bankruptcy proceeding and the related Mortgage Loan was 90 or
more days contractually delinquent or paying a reduced Monthly Payment as a
result of a bankruptcy workout as of end of the related Collection Period and
the denominator of which is the Aggregate Principal Balance of all Mortgage
Loans as of the related Determination Date.
"Deposit Date": The date each month on which funds on deposit in the
Collection Account are remitted by the Servicer to the Indenture Trustee for
deposit into the Note Account, which date shall be with respect to any Payment
Date, the 18th day of the month in which such Payment Date occurs, or the next
succeeding Business Day, if such 18th day is not a Business Day.
"Depositor": Wachovia Asset Securitization Issuance, LLC.
"Determination Date": As to any Payment Date, the last day of the Due
Period relating to such Payment Date.
"Due Period": With respect to any Payment Date, the period commencing on
the second day of the calendar month immediately preceding the calendar month in
which such Payment Date occurs (or, with respect to the first Payment Date,
commencing the day following the Cut-off Date for each Mortgage Loan) and ending
on the first day of the calendar month in which such Payment Date occurs.
"Eligible Account": Either (A) a segregated account or accounts
maintained with an institution the deposits of which are insured by the Bank
Insurance Fund or the Savings Association Insurance Fund of the FDIC, the
unsecured and uncollateralized debt obligations of which shall be rated " " or
better by [Rating Agency] and " " or better by [Rating Agency] and in the
highest short term rating category by [Rating Agencies], and that is either (i)
a federal savings and loan association duly organized, validly existing and in
good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) which is approved in writing by the
Note Insurer or (B) a trust account maintained with the trust department of a
federal or state chartered depository institution or trust company, having
capital and surplus of not less than $50,000,000, acting in its fiduciary
capacity, the unsecured and uncollateralized debt obligations of which shall be
rated " " or better by [Rating Agency]. Any Eligible Accounts maintained with
the Indenture Trustee shall conform to the preceding clause (B).
"Event of Default": As defined in Section 5.01.
"Excess Cash": With respect to any Payment Date, will be equal to Available
Funds for such Payment Date, reduced by the sum of (i) the amount payable to the
PMI Insurer as premium for such Payment Date under the PMI Policy, (ii) the Note
Insurer Premium owing to the Note Insurer in respect of the Notes for such
Payment Date, (iii) the Note Interest for such Payment Date, (iv) the Monthly
Principal for such Payment Date and (v) the amount owing to the Note Insurer
under the Insurance Agreement for reimbursement for prior draws made on the
Insurance
-7-
Policy in respect of the Notes and any other amounts owing to the Note Insurer
under the Insurance Agreement (including any unpaid Note Insurer Premiums in
respect of the Notes).
"Excess Cash Payment". As defined in clause fourth of Section 8.02(c).
"FDIC": The Federal Deposit Insurance Corporation and its successors in
interest.
"Final Certification": A certification as to the completeness of each
Mortgage File prepared by the Custodian on behalf of the Indenture Trustee, and
provided by the Indenture Trustee on or before the first anniversary of the
Closing Date pursuant to Section 6.15(b).
"Final Maturity Date": The Payment Date in November 2030.
"Fiscal Agent": As defined in the Insurance Policy.
"Full Prepayment": With respect to any Mortgage Loan, when any one of the
following occurs: (i) payment is made by the Mortgagor to the Servicer of 100%
of the outstanding principal balance of such Mortgage Loan, together with all
accrued and unpaid interest thereon at the Mortgage Interest Rate on such
Mortgage Loan, (ii) payment is made to the Indenture Trustee of the Purchase
Price of such Mortgage Loan in connection with the purchase of such Mortgage
Loan by the Seller or the Servicer or (iii) payment is made to the Servicer of
all Insurance Proceeds and Liquidation Proceeds, and other payments, if any,
that have been determined by the Servicer in accordance with the provisions of
the Servicing Agreement to be finally recoverable, in the Servicer's reasonable
judgment, in respect of such Mortgage Loan.
"Grant": To assign, transfer, mortgage, pledge, create and grant a security
interest in, deposit, set-over and confirm. A Grant of a Mortgage Loan and
related Mortgage Files, a Permitted Investment, the Servicing Agreement, the
Mortgage Loan Sale Agreement, the Mortgage Loan Contribution Agreement, or any
other instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including, without limitation,
the immediate and continuing right to claim for, collect, receive and give
receipts for principal and interest payments thereunder, insurance proceeds,
Purchase Prices and all other moneys payable thereunder and all proceeds
thereof, to give and receive notices and other communications, to make waivers
or other agreements, to exercise all rights and options, to bring Proceedings in
the name of the Granting party or otherwise, and generally to do and receive
anything that the Granting party is or may be entitled to do or receive
thereunder or with respect thereto.
"Guaranteed Principal Amount": (a) With respect to any Payment Date (other
than Payment Date specified in (b)), the Overcollateralization Deficit, if any,
for such Payment Date and (b) on the earlier to occur of the Payment Date in
December, 2030 (after giving effect to all distributions of principal on the
Notes) or the Redemption Date (after giving effect to all distribution of
principal on the Notes), an amount equal to the Note Balance.
"Highest Lawful Rate": As defined in Section 11.19.
"Indemnification Agreement": As defined in the Insurance Agreement.
-8-
"Indenture": This instrument as originally executed and, if from time to
time supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, as so supplemented or
amended. All references in this instrument to designated "Articles", "Sections",
"Subsections" and other subdivisions are to the designated Articles, Sections,
Subsections and other subdivisions of this instrument as originally executed.
The words "herein", "hereof", "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section,
Subsection or other subdivision.
"Indenture Trustee": , and any Person resulting from or surviving any
consolidation or merger to which it may be a party until a successor Person
shall have become the Indenture Trustee pursuant to the applicable provisions of
this Indenture, and thereafter "Indenture Trustee" shall mean such successor
Person.
"Indenture Trustee's Fee": With respect to the Notes, the Indenture
Trustee's monthly fee, equal to 1/12th of % of the Aggregate Principal Balance
of the Mortgage Loans as of the first day of the applicable Due Period.
"Independent": When used with respect to any specified Person, means such a
Person who (i) is in fact independent of the Issuer and any other obligor upon
the Notes, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer or in any such other obligor or in an
Affiliate of the Issuer or such other obligor, and (iii) is not connected with
the Issuer or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Indenture Trustee, such Person shall be
appointed by an Issuer Order and such opinion or certificate shall state that
the signer has read this definition and that the signer is Independent within
the meaning hereof.
"Individual Note": A Note of an original principal amount of $ (provided,
however, one Note may be less than that amount); a Note of an original principal
amount in excess of $ shall be deemed to be a number of Individual Notes equal
to the quotient obtained by dividing such original principal amount by $ .
"Initial Certification": A certification as to the completeness of each
Mortgage File prepared by the Custodian on behalf of the Indenture Trustee and
provided by the Custodian on the Closing Date pursuant to Section 6.15(a).
"Initial Redemption Date": The first Payment Date on which the aggregate
Note Balance is less than 10% of the Original Note Balance.
"Insurance Agreement": The Insurance and Indemnity Agreement, dated as of
_____________, among the Note Insurer, the Issuer, the Seller and the Depositor.
"Insurance Policy": The note guaranty insurance policy No. ______, dated
______________, issued by the Note Insurer to the Indenture Trustee for the
benefit of the Noteholders, pursuant to which the Note Insurer guarantees
payment of Insured Payments. A specimen of the Insurance Policy is attached
hereto as Exhibit B.
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"Insurance Policy Payments Account": The account established pursuant to
Section 8.03 hereof.
"Insured Payments": As to the Notes and any Payment Date, the amount
required to be paid by the Note Insurer under the Insurance Policy.
"Insurance Proceeds": As defined in the Servicing Agreement.
"Interest Period": With respect to a Payment Date, the calendar month
immediately preceding the month in which such Payment Date occurs. "Issuer":
Loan Trust 200 - , a Delaware statutory trust.
"Issuer Order" and "Issuer Request": A written order or request of the
Issuer signed on behalf of the Issuer by an Authorized Officer of the Owner
Trustee or, in the case of such order or request required by Section 2.11, by an
Authorized Officer of the holder of the Certificate and delivered to the
Indenture Trustee or the Authenticating Agent, as applicable.
"Letter Agreement": The Letter of Representations to The Depository Trust
Company from the Indenture Trustee and the Issuer dated .
"Liquidated Mortgage Loan": As defined in the Servicing Agreement.
"Liquidation Date": With respect to any Mortgage Loan, the date of the
final receipt of all Liquidation Proceeds, Insurance Proceeds or other payments
with respect to such Mortgage Loan.
"Liquidation Proceeds": As defined in the Servicing Agreement.
"Loan-to-Value Ratio": As defined in the Mortgage Loan Sale Agreement.
"Management Agreement": That certain agreement, dated as of , between the
Issuer and the Indenture Trustee pursuant to which the Indenture Trustee, as
manager, will perform certain obligations of the Issuer hereunder.
"Maturity": With respect to any Note, the date on which the entire unpaid
principal amount of such Note becomes due and payable as therein or herein
provided, whether at the Final Maturity Date or by declaration of acceleration,
call for redemption or otherwise.
"Monthly Advance": As defined the Servicing Agreement.
"Monthly Payment": With respect to any Mortgage Note, the amount of each
monthly payment payable under such Mortgage Note by the Mortgagor in accordance
with its terms, including, one month's accrued interest on the related Principal
Balance at the then applicable Mortgage Interest Rate, but net of any portion of
such monthly payment that represents late payment charges, extension fees or
collections allocable to payments to be made by Mortgagors for payment of
insurance premiums or similar items.
-10-
"Monthly Principal": For the Notes and any Payment Date, an amount equal to
(a) the aggregate of (i) all scheduled payments of principal received (or
advanced or to be advanced on the related Deposit Date) with respect to the
Mortgage Loans and due during the related Due Period and all other amounts
collected, received or otherwise recovered in respect of principal on such
Mortgage Loans (including Principal Prepayments, but not including Payments
Ahead that are not allocable to principal for the related Due Period) during or
in respect of the related Collection Period, (ii) the aggregate of the amounts
allocable to principal deposited in the Note Account on the related Deposit Date
by the Issuer, the Depositor, the Servicer or the Note Insurer in connection
with a repurchase, release, removal or substitution of any Mortgage Loans
pursuant to this Indenture, and (iii) in connection with the redemption of the
Notes, that portion of the Redemption Price in respect of principal, reduced by
(b) the amount of any Overcollateralization Surplus and Payment Date.
"Monthly Servicing Fee": As defined in the Servicing Agreement.
["Moody's": Moody's Investors Service, Inc. and its successors in
interest.]
"Mortgage": The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple in real property securing a Mortgage Loan.
"Mortgage File": As defined in the Mortgage Loan Sale Agreement.
"Mortgage Interest Rate": With respect to each Mortgage Loan, the rate per
annum set forth in the related Mortgage Note at which interest accrues on such
Mortgage Loan, in each case after giving effect to any modification of a
Mortgage Loan for any period in connection with a bankruptcy or similar
proceeding involving the related Mortgagor or a modification, waiver or
amendment of such Mortgage Loan granted or agreed to by the Servicer in
accordance with the Servicing Agreement.
"Mortgage Loan": Each of the mortgage loans Granted to the Indenture
Trustee under this Indenture as security for the Notes and that from time to
time comprise part of the Trust Estate, including any property that secures a
Mortgage that becomes REO Property. The Mortgage Loans are listed on the
Mortgage Loan Schedule annexed hereto as Schedule I.
"Mortgage Loan Contribution Agreement": That certain agreement, dated as of
, between the Depositor and the Issuer pursuant to which the Mortgage Loans will
be acquired from the Depositor by the Issuer for inclusion in the Trust Estate.
"Mortgage Loan Pool": The pool of Mortgage Loans Granted to the Indenture
Trustee under this Indenture as security for the Notes.
"Mortgage Loan Sale Agreement": That certain agreement, dated as of ,
between the Seller and the Depositor pursuant to which the Mortgage Loans will
be acquired from the Seller by the Depositor.
"Mortgage Loan Schedule": As of any date, the schedule of mortgage loans
included in the Trust Estate, Schedule I hereto identifies the Mortgage Loans
being Granted to the Indenture Trustee on the Closing Date. The Mortgage Loan
Schedule shall be amended by the Servicer as
-11-
appropriate from time to time to reflect the deletion and substitution of
Mortgage Loans in accordance with the terms of the Basic Documents. The Mortgage
Loan Schedule shall identify each Mortgage Loan by the Servicer's loan number
and address (including the state) of the related Mortgaged Property and shall
set forth as to each Mortgage Loan the initial Loan-to-Value Ratio or Combined
Loan-to-Value Ratio, the Principal Balance as of the Cut-off Date, the Mortgage
Interest Rate, the currently Monthly Payment amount and the stated maturity date
of the related Mortgage Note. The Issuer shall cause the initial Mortgage Loan
Schedule to be delivered by the Seller to the Indenture Trustee in both physical
and computer-readable form.
"Mortgage Note": The note or other instrument evidencing the indebtedness
of a Mortgagor under the related Mortgage Loan.
"Mortgaged Property": The underlying property securing a Mortgage Note.
"Mortgagor": The obligor under a Mortgage Note.
"Net Liquidation Proceeds": As defined in the Servicing Agreement.
"Nonrecoverable Advance": As defined in the Servicing Agreement.
"Note Account": The segregated trust account, which shall be an Eligible
Account, established and maintained pursuant to Section 8.02 and entitled
"__________________, as Indenture Trustee for ____________ Loan Trust 200 -
________Loan Backed Notes, Series 200 - Note Account," on behalf of the
Noteholders and the Note Insurer.
"Note Balance": With respect to the Notes, the aggregate of the Current
Note Balances of all Notes Outstanding at the time of determination.
"Noteholder" or "Holder": The Person in whose name a Note is registered in
the Note Register, except that, solely for the purpose of taking any action
under Section 5.02 or giving of any consent pursuant to this Indenture, any Note
registered in the name of the Issuer, the Seller, the Servicer or the Depositor
or any Persons actually known by a Responsible Officer of the Indenture Trustee
to be an Affiliate of the Issuer, the Seller, the Servicer or the Depositor
shall be deemed not to be Outstanding and the percentage interest evidenced
thereby shall not be taken into account in determining whether Holders of the
requisite percentage interests necessary to take any such action or effect any
such consent have acted or consented unless the Issuer, the Seller, the
Servicer, the Depositor or any such Person is an owner of record of all of the
Notes.
"Note Insurer": _______________, a _____________stock insurance company,
and successors thereto.
"Note Insurer Premium Letter": The commitment letter dated , from the Note
Insurer to the Seller regarding the issuance of a financial guaranty insurance
policy.
"Note Insurer Default": The existence and continuance of any of the
following:
(a) the Note Insurer fails to make a payment required under the
Insurance Policy in accordance with its terms;
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(b) the Note Insurer (A) files any petition or commences any case or
proceeding under any provision or chapter of the Bankruptcy Code or any
other similar federal or state law relating to insolvency, bankruptcy,
rehabilitation, liquidation or reorganization, (B) makes a general
assignment for the benefit of its creditors, or (C) has an order for relief
entered against it under the Bankruptcy Code or any other similar federal
or state law relating to insolvency, bankruptcy, rehabilitation,
liquidation or reorganization which is final and nonappealable; or
(c) a court of competent jurisdiction, the New York Department of
Insurance or other competent regulatory authority enters a final and
nonappealable order, judgment or decree (A) appointing a custodian,
trustee, agent or receiver for the Note Insurer or for all or any material
portion of its property or (B) authorizing the taking of possession by a
custodian, trustee, agent or receiver of the Note Insurer (or the taking of
possession of all or any material portion of the property of the Note
Insurer).
Notwithstanding anything to the contrary contained herein, upon the
existence and continuance of a Note Insurer Default, the consent by the Note
Insurer shall not be required to any action or inaction hereunder and the Note
Insurer shall not have any rights with respect thereto; provided, however, that
such rights shall be immediately reinstated following cure of such Note Insurer
Default.
"Note Insurer Premium": The premium due to the Note Insurer under the Note
Insurer Premium Letter on the Closing Date and on each Payment Date thereafter,
which amount as to each Payment Date shall be equal to the product of the Note
Insurer Premium Rate and the related Note Balance immediately prior to such
Payment Date.
"Note Insurer Premium Rate": The premium percentage specified in the Note
Insurer Premium Letter.
"Note Interest": As to the Notes and any Payment Date, the amount of
interest payable to Holders of such Notes on such Payment Date, which amount
shall be equal to interest at 1/12th of the Note Interest Rate on the Note
Balance as of the preceding Payment Date (after giving effect to the payment, if
any, in reduction of principal made on such Notes on such preceding Payment
Date). All calculations of interest on the Notes will be computed on the basis
of twelve thirty-day months and a year of 360 days.
"Note Interest Rate": With respect to each Interest Period prior to the
Initial Redemption Date, % per annum, and for each Interest Period thereafter, %
per annum.
"Note Register": As defined in Section 2.06.
"Note Registrar": As defined in Section 2.06.
"Notes": The ________ Loan Trust 200 - Mortgage Backed Notes, Series 200 -
, issued pursuant to this Indenture.
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"Notice of Claim": The notice required to be furnished by the Indenture
Trustee to the Note Insurer in the event an Insured Payment is required to be
paid under the Insurance Policy with respect to any Payment Date, in the form
set forth as Exhibit C hereto.
"Officers' Certificate": A certificate signed by the Chairman of the Board,
the Vice Chairman of the Board, the President, Chief Operating Officer or a Vice
President of the Seller, the Depositor, the Servicer or, in the case of the
Issuer, an Authorized Officer of the Owner Trustee, as the case may be, and
delivered to the Indenture Trustee, Note Insurer or each Rating Agency, as the
case may be.
"Opinion of Counsel": A written opinion of counsel reasonably acceptable to
the Indenture Trustee and, in the case of opinions delivered to the Note
Insurer, reasonably acceptable to it. Any expense related to obtaining an
Opinion of Counsel for an action requested by a party shall be borne by the
party required to obtain such opinion or seeking to effect the action that
requires the delivery of such Opinion of Counsel, except in such instances where
such opinion is at the request of the Indenture Trustee, in which case such
expense shall be an expense of the Servicer.
"Original Note Balance": The aggregate principal balance of the Notes at
the issue date thereof, equal to $____________.
"Other Insurance Policies": All insurance policies insuring any Mortgage
Loan or Mortgaged Property, to the extent the Issuer or the Indenture Trustee
has any interest therein, including the PMI Policy.
"Outstanding": As of the date of determination, all Notes theretofore
authenticated and delivered under this Indenture except:
(i) Definitive Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof for whose payment or redemption money
in the necessary amount has been theretofore deposited with the Indenture
Trustee or any Paying Agent (other than the Issuer) in trust for the
Holders of such Notes; provided, however, that if such Notes are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor, satisfactory to the Indenture Trustee, has
been made;
(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 (as defined by the Uniform Commercial Code of
the applicable jurisdiction); and
(iv) Notes alleged to have been destroyed, lost or stolen that have
been paid as provided for in Section 2.07;
provided, however, that in determining whether the Holders of the requisite
percentage of the Note Balance of the Outstanding Notes have given any request,
demand, authorization, direction,
-14-
notice, consent or waiver hereunder, Notes owned by the Issuer, any other
obligor upon the Notes or any Affiliate of the Issuer, the Seller, the Servicer
or the Depositor or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Indenture Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Notes that the Indenture Trustee knows to be so
owned shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee's right so to act with respect
to such Notes and that the pledgee is not the Issuer, any other obligor upon the
Notes or any Affiliate of the Issuer, the Seller, the Servicer or the Depositor
or such other obligor; provided, further, however, that Notes that have been
paid with the proceeds of the Insurance Policy shall be deemed to be Outstanding
for the purposes of this Indenture, such payment to be evidenced by written
notice from the Note Insurer to the Indenture Trustee, and the Note Insurer
shall be deemed to the Holder thereof to the extent of any payments thereon made
by the Note Insurer.
"Overcollateralization Amount": As to any Payment Date, the amount, if any,
by which (x) the Aggregate Principal Balance of the Mortgage Loans as of the end
of the related Due Period exceeds (y) the Note Balance for such Payment Date,
after taking into account Monthly Principal (disregarding any permitted
reduction thereof in such Monthly Principal due to an Overcollateralization
Surplus made on such Payment Date) to be applied in reduction of the Note
Balance on such Payment Date. If the Aggregate Principal Balance of the Mortgage
Loans is less than the Note Balance for such Payment Date, determined as
provided above, the Overcollateralization Amount and Payment Date shall be zero.
"Overcollateralization Deficiency Amount": With respect to any Payment Date
is the amount, if any, by which the Required Overcollateralization Amount
exceeds the Overcollateralization Amount.
"Overcollateralization Deficit": As to any Payment Date, the amount, if
any, by which the Note Balance on such Payment Date (after taking into account
any payments to be paid on such Payment Date in reduction of the Note Balance,
including Excess Cash payments) exceeds the Aggregate Principal Balance of the
Mortgage Loans as of the end of the related Due Period. If the Aggregate
Principal Balance of the Mortgage Loans as determined pursuant to the preceding
sentence is greater than the related Note Balance for such Payment Date
determined as provided above, the Overcollateralization Deficit for such Payment
Date shall be zero.
"Overcollateralization Surplus": As to any Payment Date, the amount, if
any, by which (x) the related Overcollateralization Amount on such Payment Date
exceeds (y) the related Required Overcollateralization Amount on such Payment
Date.
"Owner Trustee": _______________________, not in its individual capacity,
but solely as owner trustee under the Trust Agreement, and any successor owner
trustee thereunder.
"Owner Trustee Fee": The fee payable to the Owner Trustee pursuant to the
Trust Agreement.
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"Paying Agent": The Indenture Trustee or any other depository institution
or trust company that is authorized by the Issuer pursuant to Section 3.03 to
pay the principal of, or interest on, any Notes on behalf of the Issuer, which
agent, if not the Indenture Trustee, shall have signed an instrument agreeing to
be bound by the terms of this Indenture applicable to the Paying Agent.
"Payment Ahead": As defined in the Servicing Agreement.
"Payment Date": The day of each month or, if any such day is not a Business
Day, the Business Day immediately following such day, beginning .
"Payment Date Statement": The statement prepared pursuant to Section
2.08(d) with respect to collection on or in respect of the Mortgage Loans and
other assets of the Trust Estate and payments on or in respect of the Notes,
based upon the information contained in the Servicer Remittance Report prepared
pursuant to the Servicing Agreement and setting forth the following information
with respect to each Payment Date (to the extent the Servicer has made such
information (other than the information described in clause (ii), (iii), (iv),
(v) and (xv) below) available to the Indenture Trustee):
(i) the amount of such payment to Noteholders allocable to (x) Monthly
Principal (separately setting forth Principal Prepayments) and (y) any
principal payments made pursuant to Section 8.02(c)(vi) hereof;
(ii) the amount of such payment to Noteholders allocable to Note
Interest;
(iii) the Note Balance, after giving effect to the payment of Monthly
Principal and any principal payment made pursuant to Section 8.02(c)(vi)
hereof applied to reduce such Note Balance on such Payment Date;
(iv) the Aggregate Principal Balance of the Mortgage Loans as of the
end of the related Due Period;
(v) the amount of Monthly Advances made with respect to such Payment
Date and the aggregate amount of unreimbursed Monthly Advances and
Servicing Advances, if any;
(vi) the number and aggregate of the Principal Balances of Mortgage
Loans (including the Principal Balances of all Mortgage Loans in
foreclosure) contractually delinquent (i) one month, (ii) two months and
(iii) three or more months, as of the end of the related Collection Period;
(vii) the number and aggregate of the Principal Balances of the
Mortgage Loans in foreclosure or subject to other similar proceedings, and
the number and aggregate of the Principal Balance of Mortgage Loans and in
the aggregate, the Mortgagor of which is known by the Servicer to be in
bankruptcy as of the end of the related Collection Period and the book
value of any real estate acquired through foreclosure, grant of a deed in
lieu of foreclosure or other similar proceedings during the related
Collection Period;
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(viii) the aggregate of the Principal Balances of the Mortgage Loans
repurchased by the Seller or purchased by the Servicer, separately setting
forth the aggregate of the Principal Balances of Mortgage Loans and in the
aggregate delinquent for three consecutive monthly installments purchased
by the Servicer at its option pursuant to the Servicing Agreement;
(ix) the amount of any Insured Payments for such Payment Date;
(x) the aggregate amount of the Monthly Servicing Fee paid to or
retained by the Servicer for the related Collection Period;
(xi) the Overcollateralization Amount, the then applicable Required
Overcollateralization Amount, the Overcollateralization Surplus, if any,
and the Overcollateralization Deficit, if any, with respect to such Payment
Date;
(xii) the aggregate Principal Balance of the three largest outstanding
Mortgage Loans as of the related Determination Date;
(xiii) the aggregate amount of Realized Losses incurred during the
related Collection Period and the cumulative amount of Realized Losses
since the Cut-off Date;
(xiv) the amount of premium due to the PMI Insurer under the PMI
Policy;
(xv) the Delinquency Percentage and the Rolling Loss Percentage (as
defined in the Servicing Agreement) relating to such Payment Date; and
(xvi) the number of Mortgage Loan modifications made by the Servicer
during the Collection Period and the type of modification made with respect
to each such Mortgage Loan.
In the case of information furnished pursuant to subclauses (i) and (ii) above,
the amounts shall be expressed as a dollar amount per Individual Note.
"Percentage Interest": With respect to a Note, the undivided percentage
interest (carried to eight places rounded down) obtained by dividing the
original principal balance of such Note by the Original Note Balance and
multiplying the result by 100.
"Permitted Investments": One or more of the following obligations,
instruments and securities:
(a) direct general obligations of, or obligations fully guaranteed by,
the United States of America, the Federal Home Loan Mortgage Corporation,
Federal National Mortgage Corporation, the Federal Home Loan Banks or any
agency or instrumentality of the United States of America rated " " or
higher by [Rating Agency], the obligations of which are backed by the full
faith and credit of the United States of America;
(b) (i) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by, or federal funds sold by any depository
institution or trust
-17-
company (including the Indenture Trustee or its agent acting in their
respective commercial capacities) incorporated under the laws of the United
States of America or any state thereof and subject to supervision and
examination by federal and/or state authorities, so long as, at the time of
such investment or contractual commitment providing for such investment,
such depository institution or trust company or its ultimate parent has a
short-term uninsured debt rating in one of the two highest available rating
categories of [Rating Agency] and of [Rating Agency] and provided that each
such investment has an original maturity of no more than 365 days and (ii)
any other demand or time deposit or deposit which is fully insured by the
FDIC;
(c) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (a) above and entered into with
a depository institution or trust company (acting as a principal) rated " "
or higher by [Rating Agency] and rated " " or higher by [Rating Agency];
provided, however, that collateral transferred pursuant to such repurchase
obligation must be of the type described in clause (a) above and must (i)
be valued daily at current market price plus accrued interest, (ii)
pursuant to such valuation, be equal, at all times, to 105% of the cash
transferred by the Indenture Trustee in exchange for such collateral and
(iii) be delivered to the Indenture Trustee or, if the Indenture Trustee is
supplying the collateral, an agent for the Indenture Trustee, in such a
manner as to accomplish perfection of a security interest in the collateral
by possession of certified securities.
(d) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or
any state thereof which has a long-term unsecured debt rating in the
highest available rating category of each of the Rating Agencies at the
time of such investment;
(e) commercial paper having an original maturity of less than 365 days
and issued by an institution having a short-term unsecured debt rating in
the highest available rating category of each of the Rating Agencies at the
time of such investment;
(f) a guaranteed investment contract approved by each of the Rating
Agencies and the Note Insurer and issued by an insurance company or other
corporation having a long-term unsecured debt rating in the highest
available rating category of each of the Rating Agencies at the time of
such investment;
(g) money market funds having ratings in the two highest available
rating category of [Rating Agency] and one of the two highest available
rating categories of [Rating Agency] at the time of such investment which
invest only in other Permitted Investments (any such money market funds
which provide for demand withdrawals being conclusively deemed to satisfy
any maturity requirements for Permitted Investments set forth herein)
including money market funds of the Indenture Trustee and any such funds
that are managed by the Indenture Trustee or its affiliates or which
Indenture Trustee or any affiliate acts as advisor as long as such money
market funds satisfy the criteria of this subparagraph (g); and
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(h) any investment approved in writing by the Note Insurer and written
evidence that any such investment will not result in a downgrading or
withdrawal of the rating by each Rating Agency on the Notes.
The Indenture Trustee may purchase from or sell to itself or an affiliate,
as principal or agent, the Permitted Investments listed above. All Permitted
Investments in a trust account under the Indenture shall be made in the name of
the Indenture Trustee for the benefit of the Noteholders and the Note Insurer.
"Person": Any individual, corporation, limited liability company,
partnership, joint venture, association joint-stock company, trust (including
any beneficiary thereof), unincorporated organization or government or any
agency or political subdivision thereof.
"PMI Insurer": ____________________, a monoline private insurance company
organized and created under the laws of the State of _____________, or its
successors in interest.
"PMI Mortgage Loans": The list of Mortgage Loans insured by the PMI Insurer
attached hereto as Exhibit D.
"PMI Policy": The Primary Mortgage Insurance Policy (No._________) with
respect to the PMI Mortgage Loans and all endorsements thereto dated the Closing
Date, issued by the PMI Insurer.
"Predecessor Notes": With respect to any particular Note, every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purpose of this definition, any Note authenticated
and delivered under Section 2.07 in lieu of a lost, destroyed or stolen Note
shall be deemed to evidence the same debt as the lost, destroyed or stolen Note.
"Preference Claim": As defined in Section 8.03(g) of this Indenture.
"Prepayment Interest Shortfall": With respect to any Mortgage Loan as to
which a prepayment in whole or in part was received by the Servicer from the
related Mortgagor during a Collection Period, an amount equal to the difference
between (1) 30 days' interest at the Mortgage Interest Rate on the Principal
Balance of such Mortgage Loan (immediately prior to such prepayment) and (2) the
amount of interest actually collected by the Servicer on such Mortgage Loan
during the related Due Period.
"Prepayment Premium": With respect to any Collection Period, any prepayment
premium, penalty or charge payable by a Mortgagor in connection with any
Principal Prepayment on a Mortgage Loan pursuant to the terms of the related
Mortgage Note.
"Principal Balance": As to any Mortgage Loan and any Determination Date,
the actual outstanding principal amount thereof as of the close of business on
the Determination Date in the preceding month (or, in the case of the first
Payment Date, as of the Cut-off Date) less (i) all scheduled payments of
principal received or advanced (or to be advanced on the related Deposit Date)
with respect to the Mortgage Loan and due during the related Due Period and all
other amounts collected, received or otherwise recovered in respect of principal
on the Mortgage Loan
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(including Principal Prepayments, but not including Payments Ahead that are not
allocable to principal for the related Due Period) during or in respect of the
related Collection Period, Net Liquidation Proceeds and Trust Insurance Proceeds
allocable to principal recovered or collected in respect of such Mortgage Loan
during the related Collection Period, (ii) the portion of the Purchase Price
allocable to principal to be remitted by the Seller or the Servicer to the
Indenture Trustee on or prior to the related Deposit Date in connection with a
repurchase of such Mortgage Loan pursuant to the Mortgage Loan Sale Agreement,
the Servicing Agreement or Section 8.05 hereof, to the extent such amount is
actually remitted on or prior to such Deposit Date, and (iii) the amount to be
remitted by the Seller to the Indenture Trustee on the related Deposit Date in
connection with a substitution of a Qualified Replacement Mortgage Loan for such
Mortgage Loan pursuant to the Mortgage Loan Sale Agreement and Section 8.05
hereof, to the extent such amount is actually remitted on or prior to such
Deposit Date; provided, however, that Mortgage Loans that have become Liquidated
Mortgage Loans since the end of the preceding Determination Date (or, in the
case of the first Determination Date, since the Cut-off Date) will be deemed to
have a Principal Balance of zero on the current Determination Date.
"Principal Prepayment": As to any Mortgage Loan and Collection Period, any
payment by a Mortgagor or other recovery in respect of principal on a Mortgage
Loan (including Net Liquidation Proceeds and Trust Insurance Proceeds) that, in
the case of a payment by a Mortgagor, is received in advance of its scheduled
due date and is not a Payment Ahead.
"Proceeding": Any suit in equity, action at law or other judicial or
administrative proceeding.
"Purchase Price": With respect to any Defective Mortgage Loan, an amount
equal to (i) the sum of (A) the Principal Balance of such Defective Mortgage
Loan as of the beginning of the Due Period next preceding the Deposit Date on
which such repurchase or purchase is required to occur, (B) interest computed at
the applicable Mortgage Interest Rate on such Principal Balance from the date to
which interest was last paid by the Mortgagor to the last day of the Due Period
immediately preceding the Deposit Date on which such repurchase occurs and (C)
any previously unreimbursed Monthly Advances with respect to principal and
Servicing Advances made on or in respect of such Defective Mortgage Loan, less
(ii) any payments of principal and interest in respect of such Defective
Mortgage Loan made by or on behalf of the related Mortgagor during such Due
Period. With respect to any Qualified Replacement Mortgage Loan, the amount
remitted by the Seller to the Indenture Trustee on or prior to the Deposit Date
relating to a Payment Date in connection with a substitution of such Qualified
Replacement Mortgage Loan for a Mortgage Loan pursuant to the Mortgage Loan Sale
Agreement or Section 8.05 hereof.
"Qualified Replacement Mortgage Loan": A Mortgage Loan that is substituted
for a Deleted Mortgage Loan pursuant to Section 8.05 that must, at the end of
the Due Period preceding the date of such substitution, (i) have an outstanding
principal balance (when taken together with any other Qualified Replacement
Mortgage Loan being substituted for such Deleted Mortgage Loan), not in excess
of and not substantially less than the unpaid principal balance of the Deleted
Mortgage Loan at the end of the Due Period preceding the date of substitution,
(ii) be of the same type of Mortgage Interest Rate (i.e. fixed or adjustable)
and have the Mortgage Interest Rate not less than the Mortgage Interest Rate on
the Deleted Mortgage
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Loan, and, with respect to Mortgage Loans which have an adjustable Mortgage
Rate, have maximum rates, minimum rates, margin indices, gross margins, and caps
no more than 1% greater than or less than those of the Deleted Mortgage Loan,
(iii) have a remaining term to maturity not greater than (and not more than one
year less than) that of the Deleted Mortgage Loan, (iv) have a Loan-to-Value
Ratio or Combined Loan-to-Value Ratio equal to or lower than the Loan-to-Value
Ratio or Combined Loan-to-Value Ratio of the Deleted Mortgage Loan, (v) have the
same or better lien priority as the Deleted Mortgage Loan, (vi) comply as of the
date of substitution with each representation and warranty set forth in Section
4(b) and Exhibit B of the Mortgage Loan Sale Agreement, (vii) have the same or
better property type as the Deleted Mortgage Loan, (viii) have the same or
better occupancy status and (ix) be otherwise acceptable to the Note Insurer. In
the event that one or more mortgage loans are proposed to be substituted for one
or more Deleted Mortgage Loans, the foregoing tests may be met on a weighted
average basis or other aggregate basis acceptable to the Note Insurer, except
that the requirements of clauses (v), (vi), (vii) and (viii) hereof must be
satisfied as to each Qualified Replacement Mortgage Loan.
"Rating Agencies": [Rating Agency] and [Rating Agency] (each, a "Rating
Agency"). If any such agency or a successor is no longer in existence, "Rating
Agency" shall be such nationally recognized statistical credit rating agency, or
other comparable Person, designated by the Servicer, notice of which designation
shall be given to the Indenture Trustee.
"Realized Loss": As defined in the Servicing Agreement.
"Record Date": With respect to any Payment Date, the date on which the
Persons entitled to receive any payment of principal of or interest on any Notes
(or notice of a payment in full of principal) due and payable on such Payment
Date are determined; such date shall be the last Business Day preceding such
Payment Date or, with respect to Definitive Notes, the last Business Day of the
month preceding the month of such Payment Date. With respect to a vote of
Noteholders required or allowed hereunder, the Record Date shall be the later of
(i) 30 days prior to the first solicitation of consents or (ii) the date of the
most recent list of Noteholders furnished to the Indenture Trustee pursuant to
Section 7.01(a) prior to such solicitation.
"Redemption Date": With respect to the Notes, the Payment Date, if any, on
which the Notes are redeemed pursuant to Article X hereof which date may occur
on or after the Initial Redemption Date.
"Redemption Price": With respect to any Note to be redeemed in whole or in
part, an amount equal to 100% of the Current Note Balance of the Note to be so
redeemed, together with accrued and unpaid interest on such amount at the Note
Interest Rate.
"Relief Act": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
"Relief Act Interest Shortfall": With respect to any Payment Date, for any
Mortgage Loan to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended Due Period as a result of the
application of the Relief Act, the amount by which (i) interest collectible on
such Mortgage Loan during such Due Period is less than (ii) 30
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days' at the Mortgage Interest Rate on the Principal Balance of such Mortgage
Loan before giving effect to the application of the Relief Act.
"Remittable Funds": As defined in the Servicing Agreement.
"REO Property": As defined in the Servicing Agreement.
"Representative": .
"Required Overcollateralization Amount": Means with respect to the Notes:
(a) for any Payment Date on which the Step Down Trigger is not
occurring, the greater of: (i) % of the Aggregate Principal Balance of the
Mortgage Loans as of the Cut-off Date and (ii) either (A) if the Step Up
Rolling Delinquency Test is met on such Payment Date but neither the Step
Up Rolling Loss Test nor the Step Up Cumulative Loss Test is met on such
Payment Date, % of the Delinquency Amount for such Payment Date or (B) if
either the Step Up Rolling Loss Test or the Step Up Cumulative Loss Test is
met on such Payment Date, % of the Delinquency Amount for such Payment
Date.
(b) for any Payment Date on which the Step Down Trigger is occurring
the greatest of (i) the lesser of (A) % of the Aggregate Principal Balance
of the Mortgage Loans as of the Cut-off Date and (B) the Stepped Down
Required Overcollateralized Percentage of the Aggregate Principal Balance
of the Mortgage Loans as of the Determination Date relating to such Payment
Date, (ii) either (A) if the Step Up Rolling Delinquency Test is met as
such Payment Date but neither the Step Up Rolling Loss Test nor the Step Up
Cumulative Loss Test is met on such Payment Date, % of the Delinquency
Amount for such Payment Date or (B) if either the Step Up Rolling Loss Test
or the Step Up Cumulative Loss Test is met on such Payment Date, % of the
Delinquency Amount for such Payment Date, (iii) % of the Aggregate
Principal Balance of the Mortgage Loans as of the Cut-Off Date and (iv)
three times the Principal Balance of the largest Mortgage Loan then
outstanding.
(c) provided, however, for any Payment Date on which the Step Up
Claims Denial Test is met, the Required Overcollateralization Amount
determined pursuant to clause (a) or (b) above, as applicable, shall be
increased by an amount equal to the product of % and the Aggregate
Principal Balance of the Mortgage Loans as of the Cut-Off Date.
The Note Insurer may, in its sole discretion, at the request of the holders
of 50% or more of the ownership interests of the Issuer, modify clause (a), (b)
or (c) above.
"Required Payment Amount": With respect to the Notes and any Payment Date,
the Note Interest (net of any Relief Act Interest Shortfalls and Prepayment
Interest Shortfalls) for such Payment Date plus the amount of any
Overcollateralization Deficit for such Payment Date.
"Responsible Officer": With respect to the Indenture Trustee, the chairman
or vice-chairman of the board of directors, the chairman or vice-chairman of the
executive committee of
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the board of directors, the president, any vice president, any assistant vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any trust officer or assistant trust officer, the
controller, any assistant controller or any other officer of the Indenture
Trustee customarily performing functions similar to those performed by any of
the above designated officers and also, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Rolling Delinquency Percentage": As defined in the Servicing Agreement.
"Rolling Loss Percentage": As defined in the Servicing Agreement.
"Sale": The meaning specified in Section 5.17.
"Seller": ____________________.
"Servicer": With respect to any Mortgage Loan, ______________, a
corporation, as Servicer under the Servicing Agreement, and its permitted
successors and assigns thereunder, including any successor servicers appointed
pursuant to Section 6.02 of the Servicing Agreement.
"Servicer Remittance Report": As defined in the Servicing Agreement.
"Servicing Advance": As defined in the Servicing Agreement.
"Servicing Agreement": The Servicing Agreement, dated as of , among the
Issuer, the Servicer and the Indenture Trustee, as indenture trustee, providing,
among other things, for the servicing of the Mortgage Loans, as such agreement
may be amended or supplemented from time to time as permitted hereby and
thereby. Such term shall also include any servicing agreement entered into with
a successor servicer.
"Servicing Fee Rate": ___% per annum.
["S&P": Standard & Poor's Rating Services, a Division of The McGraw-Hill
Companies, Inc., and its successors in interest.]
"Step Down Cumulative Loss Test": The Step Down Cumulative Loss Test will
be met with respect to a Payment Date as follows: (i) for the through the
Payment Dates, if the Cumulative Loss Percentage for such Payment Date is % or
less; (ii) for the through the Payment Dates, if the Cumulative Loss Percentage
for such Payment Date is % or less; (iii) for the through the Payment Dates, if
the Cumulative Loss Percentage for such Payment Date is % or less; and (iv) for
any Payment Date after the Payment Date, if the Cumulative Loss Percentage for
such Payment Date is % or less.
"Step Down Rolling Delinquency Test": The Step Down Rolling Delinquency
Test will be met with respect to a Payment Date if the Rolling Delinquency
Percentage for such Payment Date is % or less.
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"Step Down Rolling Loss Test": The Step Down Rolling Loss Test will be met
with respect to a Payment Date if the Rolling Loss Percentage is less than %.
"Step Down Trigger": For any Payment Date after the Payment Date, the Step
Down Trigger will have occurred if each of the Step Down Cumulative Loss Test,
the Step Down Rolling Delinquency Test and the Step Down Rolling Loss Test is
met. In no event will the Step Down Trigger be deemed to have occurred for the
Payment Date or any preceding Payment Date.
"Stepped Down Required Overcollateralized Percentage": For any Payment Date
for which the Step Down Trigger has occurred, a percentage equal to the greater
of (x) % and (y) (i) the percentage equivalent of a fraction, the numerator of
which is the Overcolleralization Amount as of the immediately preceding Payment
Date and the denominator of which is the Aggregate Principal Balance of the
Mortgage Loans and REO Properties as of such Payment Date, minus (ii) the
percentage equivalent of a fraction, the numerator of which is the product of
(A) the percentage calculated under clause (i) above minus % multiplied by (B)
the number of consecutive Payment Dates through and including the Payment Date
for which the Stepped Down Required Overcollateralized Percentage is being
calculated, up to a maximum of six, for which the Step Down Trigger has
occurred, and the denominator of which is six.
"Step Up Claims Denial Test": The Step Up Claims Denial Test will be met if
either of the following events occurs (i) the PMI Insurer is downgraded below "
" by [Rating Agency] or [Rating Agency], or (ii) the cumulative claims denials
for any 12-months preceding a Payment Date exceed % of the Aggregate Principal
Balance of the Mortgage Loans covered by the PMI Policy at the beginning of such
12-month period.
"Step Up Cumulative Loss Test": The Step Up Cumulative Loss Test will be
met with respect to a Payment Date as follows: (i) for the through the Payment
Dates, if the Cumulative Loss Percentage for such Payment Date is more than %;
(ii) for the through the Payment Dates, if the Cumulative Loss Percentage for
such Payment Date is more than ____%; (iii) for the through the Payment Dates,
if the Cumulative Loss Percentage for such Payment Date is more than ____%; (iv)
for the through the Payment Dates, if the Cumulative Loss Percentage for such
Payment Date is more than %; and (v) for the Payment Date and any Payment Date
thereafter, if the Cumulative Loss Percentage for such Payment Date is more than
____%.
"Step Up Rolling Delinquency Test": The Step Up Rolling Delinquency Test
will be met with respect to a Payment Date if the Rolling Delinquency Percentage
for such Payment Date is more than %.
"Step Up Rolling Loss Test": The Step Up Rolling Loss Test will be met with
respect to a Payment Date, if the Rolling Loss Percentage is equal to or more
than %.
"Transition Expenses": As defined in the Servicing Agreement.
"Trust Agreement": That certain Deposit Trust Agreement, dated as of
___________ 200 , among the Depositor, the Owner Trustee, ________________ and
the Servicer.
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"Trust Estate": All money, instruments and other property subject or
intended to be subject to the lien of this Indenture for the benefit of the
Noteholders and the Note Insurer as of any particular time (including, without
limitation, all property and interests Granted to the Indenture Trustee,
including all proceeds thereof).
"Trust Indenture Act" or "TIA": The Trust Indenture Act of 1939, as it may
be amended from time to time.
"Trust Insurance Proceeds": As defined in the Servicing Agreement.
"Trust Paying Agent": The entity appointed to act as paying agent pursuant
to the Trust Agreement with respect to amounts on deposit from time to time in
the Certificate Distribution Account and distributions thereof to
Certificateholders. The initial Trust Paying Agent is .
"U.S. Bankruptcy Code" shall mean the United States Bankruptcy Code, 11
U.S.C. Sections 101, et seq., as amended or supplemented from time to time.
"Vice President": Any vice president, whether or not designated by a number
or a word or words added before or after the title "vice president".
ARTICLE II
THE NOTES
Section 2.01. Forms Generally.
The Notes shall be in substantially the form set forth on Exhibit A
attached hereto. Each Note may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange on which the Notes
may be listed, or as may, consistently herewith, be determined by the Issuer, as
evidenced by its execution thereof. Any portion of the text of any Note may be
set forth on the reverse thereof with an appropriate reference on the face of
the Note.
The Definitive Notes may be produced in any manner determined by the
Issuer, as evidenced by its execution thereof.
Section 2.02. Forms of Certificate of Authentication.
The form of the Authenticating Agent's certificate of authentication is as
follows:
This is one of the Notes referred to in the within-mentioned Indenture.
[Authentication Agent], as Authenticating Agent
By:
---------------------------------------------
Authorized Signatory
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Section 2.03. General Provisions With Respect to Principal and Interest
Payment.
The Notes shall be designated generally as the "Mortgage Backed Notes,
Series 200 - " of the Issuer.
The aggregate principal amount of Notes that may be authenticated and
delivered under this Indenture is limited to $_____ , except for the Notes
authenticated and delivered upon registration of transfer of, or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this
Indenture. The Notes shall consist of one class designated as Class _____,
having a Note Interest Rate and Final Maturity Date as follows:
Designation Original Note Balance Note Interest Rate Final Maturity Date
- ----------- --------------------- ------------------ -------------------
%
The Notes shall be issued in the form specified in Section 2.01.
Subject to the provisions of Section 3.01, Section 5.07, Section 5.09 and
Section 8.02(d), the principal of the Notes shall be payable in installments
ending no later than the Final Maturity Date unless the unpaid principal of such
Notes become due and payable at an earlier date by declaration of acceleration
or call for redemption or otherwise.
All payments made with respect to any Note shall be applied first to the
interest then due and payable on such Note and then to the principal thereof.
All computations of interest accrued on any Note shall be made on the basis of a
year of 360 days and twelve 30-day months.
Interest on the Notes shall accrue at the Note Interest Rate during each
Interest Period on the Current Note Balance of each Outstanding Note at the end
of such Interest Period. Interest accrued during an Interest Period shall be
payable on the next following Payment Date.
All payments of principal of and interest on any Note shall be made in the
manner specified in Section 2.
Notwithstanding any of the foregoing provisions with respect to payments of
principal of and interest on the Notes, if the Notes have become or been
declared due and payable following an Event of Default and such acceleration of
maturity and its consequences have not been rescinded and annulled, then
payments of principal of and interest on the Notes shall be made in accordance
with Section 5.07.
Section 2.04. Denominations.
The Notes shall be issuable only as registered Notes in the minimum
denomination of $_______ and integral multiples of $_______ in excess thereof,
with the exception of one Note which may be issued in a lesser amount.
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Section 2.05. Execution, Authentication, Delivery and Dating.
The Notes shall be executed on behalf of the Issuer by an Authorized
Officer of the Owner Trustee. The signature of such Authorized Officer of the
Owner Trustee on the Notes may be manual or by facsimile.
Notes bearing the manual or facsimile signature of an individual who was at
any time an Authorized Officer of the Owner Trustee shall bind the Issuer,
notwithstanding that such individual has ceased to be an Authorized Officer of
the Owner Trustee prior to the authentication and delivery of such Notes or was
not an Authorized Officer of the Owner Trustee at the date of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture, the Issuer may deliver Notes executed on behalf of the Issuer to the
Authenticating Agent for authentication; and the Authenticating Agent shall
authenticate and deliver such Notes as in this Indenture provided and not
otherwise.
Each Note authenticated on the Closing Date shall be dated the Closing
Date. All other Notes that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Note a certificate
of authentication substantially in the form provided for herein executed by the
Authenticating Agent by the manual signature of one of its authorized officers
or employees, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
Section 2.06. Registration, Registration of Transfer and Exchange.
The Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee is hereby initially appointed "Note Registrar" for
the purpose of registering Notes and transfers of Notes as herein provided. The
Indenture Trustee shall remain the Note Registrar throughout the term hereof.
Upon any resignation of the Indenture Trustee, the Issuer shall promptly appoint
a successor, with the approval of the Note Insurer, or, in the absence of such
appointment, the Issuer shall assume the duties of Note Registrar.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, the Owner
Trustee on behalf of the Issuer, shall execute, and the Authenticating Agent
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Notes of any authorized denominations and of a like
aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes of any
authorized denominations, and of a like aggregate initial principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange,
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the Owner Trustee shall execute, and the Authenticating Agent shall authenticate
and deliver, the Notes that the Noteholder making the exchange is entitled to
receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Note Registrar duly executed by the Holder
thereof or its attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer and the Note Registrar may require payment of
a sum sufficient to cover any tax or other governmental charge as may be imposed
in connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.07 not involving any transfer or any exchange
made by the Note Insurer.
The Note Registrar shall not register the transfer of a Note unless the
Note Registrar has received a representation letter from the transferee to the
effect that either (i) the transferee is not, and is not acquiring the Note on
behalf of or with the assets of, an employee benefit plan or other retirement
plan or arrangement that is subject to Title I of the Employee Retirement Income
Security Act or 1974, as amended, or Section 4975 of the Code or (ii) the
acquisition and holding of the Note by the transferee qualifies for exemptive
relief under a Department of Labor Prohibited Transaction Class Exemption. Each
Beneficial Owner of a Book-Entry Note shall be deemed to make one of the
foregoing representations.
Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes.
If (1) any mutilated Note is surrendered to the Note Registrar or the Note
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (2) there is delivered to the Note Registrar such
security or indemnity as may be required by the Note Registrar to save each of
the Issuer, the Note Insurer and the Note Registrar harmless, then, in the
absence of notice to the Issuer or the Note Registrar that such Note has been
acquired by a bona fide purchaser, the Owner Trustee on behalf of the Issuer
shall execute and upon its request the Note Registrar shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a new Note or Notes of the same tenor and aggregate initial
principal amount bearing a number not contemporaneously outstanding. If, after
the delivery of such new Note, a bona fide purchaser of the original Note in
lieu of which such new Note was issued presents for payment such original Note,
the Issuer and the Note Registrar shall be entitled to recover such new Note
from the person to whom it was delivered or any person taking therefrom, except
a bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expenses
incurred by the Issuer or the Note Registrar in connection therewith. If any
such mutilated, destroyed, lost or stolen Note shall have become or shall be
about to become due and payable, or shall have become subject to redemption in
full, instead of issuing a new Note, the Issuer may pay such Note without
surrender thereof, except that any mutilated Note shall be surrendered.
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Upon the issuance of any new Note under this Section, the Issuer or the
Note Registrar may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
reasonable expenses (including the fees and expenses of the Indenture Trustee or
the Note Registrar) connected therewith.
Every new Note issued pursuant to this Section in lieu of any
destroyed, lost or stolen Note shall constitute an original additional
contractual obligation of the Issuer, whether or not the destroyed, lost or
stolen Note shall be at any time enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately with any and all
other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
Section 2.08. Payments of Principal and Interest.
(a) Payments on Notes issued as Book-Entry Notes will be made by or on
behalf of the Indenture Trustee to the Clearing Agency or its nominee. Any
installment of interest or principal payable on any Definitive Notes that is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered at the close of business on the Record Date for
such Payment Date by either (i) check mailed to such Person's address as it
appears in the Note Register on such Record Date, or (ii) by wire transfer of
immediately available funds to the account of a Noteholder, if such Noteholder
(A) is the registered holder of Definitive Notes having an initial principal
amount of at least $1,000,000 and (B) has provided the Indenture Trustee with
wiring instructions in writing by five Business Days prior to the related Record
Date or has provided the Indenture Trustee with such instructions for any
previous Payment Date, except for the final installment of principal payable
with respect to such Note (or the Redemption Price for any Note called for
redemption, if such redemption will result in payment of the then entire unpaid
principal amount of such Note), which shall be payable as provided in subsection
(b) below of this Section 2.08. A fee may be charged by the Indenture Trustee to
a Noteholder of Definitive Notes for any payment made by wire transfer. Any
installment of interest or principal not punctually paid or duly provided for
shall be payable as soon as funds are available to the Indenture Trustee for
payment thereof, or if Section 5.07 applies, pursuant to Section 5.07.
(b) All reductions in the principal amount of a Note (or one or more
Predecessor Notes) effected by payments of installments of principal made on any
Payment Date shall be binding upon all Holders of such Note and of any Note
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Note. The final
installment of principal of each Note (including the Redemption Price of any
Note called for optional redemption, if such optional redemption will result in
payment of the entire unpaid principal amount of such Note) shall be payable
only upon presentation and surrender thereof on or after the Payment Date
therefor at the Indenture Trustee's presenting office located within the United
States of America pursuant to Section 3.02.
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Whenever the Indenture Trustee expects that the entire remaining
unpaid principal amount of any Note will become due and payable on the next
Payment Date other than pursuant to a redemption pursuant to Article X, it
shall, no later than two days prior to such Payment Date, telecopy or hand
deliver to each Person in whose name a Note to be so retired is registered at
the close of business on such otherwise applicable Record Date a notice to the
effect that:
(i) the Indenture Trustee expects that funds sufficient to pay
such final installment will be available in the Note Account on such
Payment Date; and
(ii) if such funds are available, (A) such final installment will
be payable on such Payment Date, but only upon presentation and
surrender of such Note at the office or agency of the Note Registrar
maintained for such purpose pursuant to Section 3.02 (the address of
which shall be set forth in such notice) and (B) no interest shall
accrue on such Note after such Payment Date.
A copy of such form of notice shall be sent to the Note Insurer by the
Indenture Trustee.
Notices in connection with redemptions of Notes shall be mailed to
Noteholders in accordance with Section 10.02.
(c) Subject to the foregoing provisions of this Section, each Note
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Note shall carry the rights to unpaid principal and
interest that were carried by such other Note. Any checks mailed pursuant to
subsection (a) of this Section 2.08 and returned undelivered shall be held in
accordance with Section 3.03.
(d) Each Payment Date Statement, prepared by the Indenture Trustee
based on the Servicer Remittance Report delivered to the Indenture Trustee
pursuant to the Servicing Agreement, shall be made available via the Indenture
Trustee's internet website and its fax-on-demand service to the Note Insurer,
the Rating Agencies, the Owner Trustee, the Underwriters (as defined in the
Insurance Agreement) and each Noteholder as the statement required pursuant to
Section 8.06. Noteholders that are unable to use the above distribution options
are entitled to have a paper copy mailed to them via first class mail by calling
the customer service desk at and indicating such. Neither the Indenture Trustee
nor the Paying Agent shall have any responsibility to recalculate, verify or
recompute information contained in any such tape, electronic data file or disk
or any such Servicer Remittance Report except to the extent necessary to satisfy
all obligations under this Section 2.08(d) and under Article III of the
Servicing Agreement.
Within 90 days after the end of each calendar year, the Indenture
Trustee will be required to furnish to each person who at any time during the
calendar year was a Noteholder, if requested in writing by such person, a
statement containing the information set forth in subclauses (i) and (ii) in the
definition of "Payment Date Statement," aggregated for such calendar year or the
applicable portion thereof during which such person was a Noteholder. Such
obligation will be deemed to have been satisfied to the extent that
substantially comparable information is provided pursuant to any requirements of
the Code as are from time to time in force.
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Section 2.09. Persons Deemed Owner.
Prior to due presentment for registration of transfer of any Note, the
Issuer, the Indenture Trustee, any Paying Agent and any other agent of the
Issuer, the Note Insurer or the Indenture Trustee may treat the Person in whose
name any Note is registered as the owner of such Note (a) on the applicable
Record Date for the purpose of receiving payments of the principal of and
interest on such Note and (b) on any other date for all other purposes
whatsoever, and neither the Issuer, the Indenture Trustee, any Paying Agent nor
any other agent of the Issuer, the Note Insurer or the Indenture Trustee shall
be affected by notice to the contrary.
Section 2.10. Cancellation.
All Notes surrendered for payment, registration of transfer, exchange
or redemption shall, if surrendered to any Person other than the Note Registrar,
be delivered to the Note Registrar and shall be promptly canceled by it. The
Issuer may at any time deliver to the Note Registrar for cancellation any Note
previously authenticated and delivered hereunder which the Issuer may have
acquired in any manner whatsoever, and all Notes so delivered shall be promptly
canceled by the Note Registrar. No Notes shall be authenticated in lieu of or in
exchange for any Notes canceled as provided in this Section, except as expressly
permitted by this Indenture. All canceled Notes held by the Note Registrar shall
be held by the Note Registrar in accordance with its standard retention policy,
unless the Issuer shall direct by an Issuer Order that they be destroyed or
returned to it.
Section 2.11. Authentication and Delivery of Notes.
The Notes shall be executed by an Authorized Officer of the Owner
Trustee on behalf of the Issuer and delivered to the Authenticating Agent for
authentication, and thereupon the same shall be authenticated and delivered by
the Authenticating Agent, upon Issuer Request and upon receipt by the
Authenticating Agent of all of the following:
(a) An Issuer Order authorizing the execution, authentication and
delivery of the Notes and specifying the Final Maturity Date, the principal
amount and the Note Interest Rate (or the manner in which such Note Interest
Rate is to be determined) of such Notes to be authenticated and delivered.
(b) An Issuer Order authorizing the execution and delivery of this
Indenture.
(c) One or more Opinions of Counsel addressed to the Authenticating
Agent and the Note Insurer or upon which the Authenticating Agent and the Note
Insurer is expressly permitted to rely, complying with the requirements of
Section 11.01, reasonably satisfactory in form and substance to the
Authenticating Agent and the Note Insurer.
In rendering the opinions set forth above, such counsel may rely upon
officer's certificates of the Issuer, the Owner Trustee, the Servicer and the
Indenture Trustee, without independent confirmation or verification with respect
to factual matters relevant to such opinions. In rendering the opinions set
forth above, such counsel need express no opinion as to (A) the existence of, or
the priority of the security interest created by the Indenture against, any
liens or other interests that arise by operation of law and that do not require
any filing or similar
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action in order to take priority over a perfected security interest or (B) the
priority of the security interest created by this Indenture with respect to any
claim or lien in favor of the United States or any agency or instrumentality
thereof (including federal tax liens and liens arising under Title IV of the
Employee Retirement Income Security Act of 1974).
The acceptability to the Note Insurer of the Opinion of Counsel
delivered to the Indenture Trustee and the Note Insurer at the Closing Date
shall be conclusively evidenced by the delivery on the Closing Date of the
Insurance Policy.
(d) Pursuant to the authorization of the Depositor, an Officers'
Certificate of the Issuer complying with the requirements of Section 11.01 and
stating that:
(i) the Issuer is not in Default under this Indenture and the
issuance of the Notes will not result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, the
Issuer's Certificate of Trust or any indenture, mortgage, deed of
trust or other agreement or instrument to which the Issuer is a party
or by which it is bound, or any order of any court or administrative
agency entered in any proceeding to which the Issuer is a party or by
which it may be bound or to which it may be subject, and that all
conditions precedent provided in this Indenture relating to the
authentication and delivery of the Notes have been complied with;
(ii) the Issuer is the owner of each Mortgage Loan, free and
clear of any lien, security interest or charge, has not assigned any
interest or participation in any such Mortgage Loan (or, if any such
interest or participation has been assigned, it has been released) and
has the right to Grant each such Mortgage Loan to the Indenture
Trustee;
(iii) the information set forth in the Mortgage Loan Schedule
attached as Schedule I to this Indenture is correct;
(iv) the Issuer has Granted to the Indenture Trustee all of its
right, title and interest in each Mortgage Loan;
(v) as of the Closing Date, no lien in favor of the United States
described in Section 6321 of the Code, or lien in favor of the Pension
Benefit Guaranty Corporation described in Section 4068(a) of the
Employee Retirement Income Security Act of 1974, as amended, has been
filed as described in subsections 6323(f) and 6323(g) of the Code upon
any property belonging to the Issuer; and
(vi) attached thereto is a true and correct copy of letters
signed by each Rating Agency confirming that the Notes have been rated
in the highest rating category of such Rating Agency.
(e) An executed counterpart of the Servicing Agreement.
(f) An executed counterpart of the Mortgage Loan Sale Agreement.
(g) An executed counterpart of the Mortgage Loan Contribution
Agreement.
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(h) An executed counterpart of the Trust Agreement.
Section 2.12. Book-Entry Note.
The Notes will be issued initially as one or more certificates in the
name of the Cede & Co., as nominee for the Clearing Agency maintaining
book-entry records with respect to ownership and transfer of such Notes, and
held by the Clearing Agency or, pursuant to the Clearing Agency's instructions
on behalf of the Clearing Agency, deposited with the Indenture Trustee, and
registration of the Notes may not be transferred by the Note Registrar except
upon Book-Entry Termination. In such case, the Note Registrar shall deal with
the Clearing Agency as representatives of the Beneficial Owners of such Notes
for purposes of exercising the rights of Noteholders hereunder. Each payment of
principal of and interest on a Book-Entry Note shall be paid to the Clearing
Agency, which shall credit the amount of such payments to the accounts of its
Clearing Agency Participants in accordance with its normal procedures. Each
Clearing Agency Participant shall be responsible for disbursing such payments to
the Beneficial Owners of the Book-Entry Notes that it represents and to each
indirect participating brokerage firm (a "brokerage firm" or "indirect
participating firm") for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Beneficial Owners of the Book-Entry
Notes that it represents. All such credits and disbursements are to be made by
the Clearing Agency and the Clearing Agency Participants in accordance with the
provisions of the Notes. None of the Indenture Trustee, the Note Registrar, if
any, the Issuer, or any Paying Agent or the Note Insurer shall have any
responsibility therefor except as otherwise provided by applicable law. Requests
and directions from, and votes of, such representatives shall not be deemed to
be inconsistent if they are made with respect to different Beneficial Owners.
Section 2.13. Termination of Book Entry System.
(a) The book-entry system through the Clearing Agency with respect to
the Book-Entry Notes may be terminated upon the happening of any of the
following:
(i) The Clearing Agency advises the Indenture Trustee that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities as nominee and depositary with respect to the Notes
and the Indenture Trustee is unable to locate a qualified successor
clearing agency satisfactory to the Issuer;
(ii) The Issuer, in its sole discretion, elects to terminate the
book-entry system by notice to the Clearing Agency and the Indenture
Trustee; or
(iii) After the occurrence of an Event of Default (at which time
the Indenture Trustee shall use all reasonable efforts to promptly
notify each Beneficial Owner through the Clearing Agency of such Event
of Default), the Beneficial Owners of no less than 51% of the Note
Balance of the Book-Entry Notes advise the Indenture Trustee in
writing, through the related Clearing Agency Participants and the
Clearing Agency, that the continuation of a book-entry system through
the Clearing Agency to the exclusion of any Definitive Notes being
issued to any person other than the Clearing Agency or its nominee is
no longer in the best interests of the Beneficial Owners.
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(b) Upon the occurrence of any event described in subsection (a)
above, the Indenture Trustee shall use all reasonable efforts to notify all
Beneficial Owners, through the Clearing Agency, of the occurrence of such event
and of the availability of Definitive Notes to Beneficial Owners requesting the
same, in an aggregate Current Note Balance representing the interest of each,
making such adjustments and allowances as it may find necessary or appropriate
as to accrued interest and previous calls for redemption. Definitive Notes shall
be issued only upon surrender to the Indenture Trustee of the global Note by the
Clearing Agency, accompanied by registration instructions for the Definitive
Notes. Neither the Issuer nor the Indenture Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon issuance of the Definitive
Notes, all references herein to obligations imposed upon or to be performed by
the Clearing Agency shall cease to be applicable and the provisions relating to
Definitive Notes shall be applicable.
ARTICLE III
COVENANTS
Section 3.01. Payment of Notes.
The Issuer will pay or cause to be duly and punctually paid the
principal of, and interest on, the Notes in accordance with the terms of the
Notes and this Indenture. The Notes shall be non-recourse obligations of the
Issuer and shall be limited in right of payment to amounts available from the
Trust Estate as provided in this Indenture and the Issuer shall not otherwise be
liable for payments on the Notes. No person shall be personally liable for any
amounts payable under the Notes. If any other provision of this Indenture
conflicts or is deemed to conflict with the provisions of this Section 3.01, the
provisions of this Section 3.01 shall control.
Section 3.02. Maintenance of Office or Agency.
The Issuer will cause the Note Registrar to maintain its corporate
trust office at a location where Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served.
The Issuer may also from time to time at its own expense designate one
or more other offices or agencies within the United States of America where the
Notes may be presented or surrendered for any or all such purposes and may from
time to time rescind such designations; provided, however, any designation of an
office or agency for payment of Notes shall be subject to Section 3.03. The
Issuer will give prompt written notice to the Indenture Trustee and the Note
Insurer of any such designation or rescission and of any change in the location
of any such other office or agency.
Section 3.03. Money for Note Payments to Be Held In Trust.
All payments of amounts due and payable with respect to any Notes that
are to be made from amounts withdrawn from the Note Account pursuant to Section
8.02(c) or Section 5.07 shall be made on behalf of the Issuer by the Paying
Agent, and no amounts so withdrawn from the Note Account for payments of Notes
shall be paid over to the Issuer under any circumstances except as provided in
this Section 3.03 or in Section 5.07 or Section 8.02.
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With respect to Definitive Notes, if the Issuer shall have a Paying
Agent that is not also the Note Registrar, such Note Registrar shall furnish, no
later than the fifth calendar day after each Record Date, a list, in such form
as such Paying Agent may reasonably require, of the names and addresses of the
Holders of Notes and of the number of Individual Notes held by each such Holder.
Whenever the Issuer shall have a Paying Agent other than the Indenture
Trustee, it will, on or before the Business Day next preceding each Payment Date
direct the Indenture Trustee to deposit with such Paying Agent an aggregate sum
sufficient to pay the amounts then becoming due (to the extent funds are then
available for such purpose in the Note Account), such sum to be held in trust
for the benefit of the Persons entitled thereto. Any moneys deposited with a
Paying Agent in excess of an amount sufficient to pay the amounts then becoming
due on the Notes with respect to which such deposit was made shall, upon Issuer
Order, be paid over by such Paying Agent to the Indenture Trustee for
application in accordance with Article VIII.
Subject to the prior consent of the Note Insurer, any Paying Agent
other than the Indenture Trustee may be appointed by Issuer Order and at the
expense of the Issuer. The Issuer shall not appoint any Paying Agent (other than
the Indenture Trustee) that is not, at the time of such appointment, a
depository institution or trust company whose obligations would be Permitted
Investments pursuant to clause (c) of the definition of the term Permitted
Investments. The Issuer will cause each Paying Agent other than the Indenture
Trustee to execute and deliver to the Indenture Trustee an instrument in which
such Paying Agent shall agree with the Indenture 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:
(1) allocate all sums received for payment to the Holders of
Notes on each Payment Date among such Holders in the proportion
specified in the applicable Payment Date Statement, in each case to
the extent permitted by applicable law;
(2) 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;
(3) if such Paying Agent is not the Indenture Trustee,
immediately resign as a Paying Agent and forthwith pay to the
Indenture Trustee all sums held by it in trust for the payment of the
Notes if at any time the Paying Agent ceases to meet the standards set
forth above required to be met by a Paying Agent at the time of its
appointment;
(4) if such Paying Agent is not the Indenture Trustee, give the
Indenture Trustee notice of any Default by the Issuer (or any other
obligor upon the Notes) in the making of any payment required to be
made with respect to any Notes for which it is acting as Paying Agent;
(5) if such Paying Agent is not the Indenture Trustee, at any
time during the continuance of any such Default, upon the written
request of the Indenture Trustee, forthwith pay to the Indenture
Trustee all sums so held in trust by such Paying Agent; and
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(6) comply with all requirements of the Code, and all regulations
thereunder, with respect to withholding from any payments made by it
on any Notes of any applicable withholding taxes imposed thereon and
with respect to any applicable reporting requirements in connection
therewith; provided, however, that with respect to withholding and
reporting requirements applicable to original issue discount (if any)
on any of the Notes, the Issuer has provided the calculations
pertaining thereto to the Indenture Trustee and the Paying Agent.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Issuer
Order direct any Paying Agent, if other than the Indenture Trustee, to pay to
the Indenture Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Indenture Trustee upon the same trusts as those upon which such
sums were held by such Paying Agent; and upon such payment by any Paying Agent
to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money.
Any money held by the Indenture Trustee or any Paying Agent in trust
for the payment of any amount due with respect to any Note and remaining
unclaimed for two and one-half years after such amount has become due and
payable to the Holder of such Note (or if earlier, three months before the date
on which such amount would escheat to a governmental entity under applicable
law) shall be discharged from such trust and paid to the Issuer; and the Holder
of such Note shall thereafter, as an unsecured general creditor, look only to
the Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Paying Agent
with respect to such trust money shall thereupon cease. The Indenture Trustee
may adopt and employ, at the expense of the Issuer, any reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Indenture
Trustee or any Agent, at the last address of record for each such Holder).
Section 3.04. Existence of Issuer.
(a) Subject to Sections 3.04(b) and (c) and Section 6.2(a)(ii) of the
Deposit Trust Agreement, the Issuer will keep in full effect its existence,
rights and franchises as a statutory trust under the laws of the State of
Delaware or under the laws of any other state or the United States of America,
and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Indenture, the Notes, the Servicing
Agreement, the Insurance Agreement and the Mortgage Loan Contribution Agreement.
(b) Subject to Section 3.09(vii), the prior written consent of the
Note Insurer, and written notice to the Rating Agencies, any entity into which
the Issuer may be merged or with which it may be consolidated, or any entity
resulting from any merger or consolidation to which the Issuer shall be a party,
shall be the successor Issuer 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, anything in any agreement relating to such merger or
consolidation, by which any such Issuer may seek to retain certain powers,
rights and privileges therefore obtaining for any period
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of time following such merger or consolidation to the contrary notwithstanding
(other than Section 3.09(vii)).
(c) Upon any consolidation or merger of or other succession to the
Issuer in accordance with this Section 3.04, the Person formed by or surviving
such consolidation or merger (if other than the Issuer) may exercise every right
and power of, and shall have all of the obligations of, the Issuer under this
Indenture with the same effect as if such Person had been named as the Issuer
herein.
Section 3.05. Protection of Trust Estate.
(a) The Issuer will from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action as may be necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien of this Indenture or carry out
more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Loans, the Servicing Agreement,
the Mortgage Loan Sale Agreement or the Mortgage Loan Contribution
Agreement; or
(v) preserve and defend title to the Trust Estate and the rights
of the Indenture Trustee, and of the Noteholders, in the Mortgage
Loans and the other property held as part of the Trust Estate against
the claims of all Persons and parties.
(b) The Indenture Trustee shall not remove any portion of the Trust
Estate that consists of money or is evidenced by an instrument, certificate or
other writing from the jurisdiction in which it was held, or to which it is
intended to be removed, as described in the Opinion of Counsel delivered at the
Closing Date pursuant to Section 2.1l(c), or cause or permit ownership or the
pledge of any portion of the Trust Estate that consists of book-entry securities
to be recorded on the books of a Person located in a different jurisdiction from
the jurisdiction in which such ownership or pledge was recorded at such time
unless the Indenture Trustee shall have first received an Opinion of Counsel to
the effect that the lien and security interest created by this Indenture with
respect to such property will continue to be maintained after giving effect to
such action or actions.
Section 3.06. Annual Opinions as to Collateral.
On or before December 31st in each calendar year, beginning in 200 ,
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
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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 December 31st of the
following calendar year.
Section 3.07. Performance of Obligations; Servicing Agreement.
(a) The Issuer shall punctually perform and observe all of its
obligations under this Indenture and the Servicing Agreement.
(b) The Issuer shall not take any action and will use its Best Efforts
not to permit any action to be taken by others that would release any Person
from any of such Person's covenants or obligations under any of the Mortgage
Files or under any instrument included in the Trust Estate, or that would result
in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents or instruments
contained in the Mortgage Files, except as expressly permitted in this
Indenture, the Servicing Agreement or such document included in the Mortgage
File or other instrument or unless such action will not adversely affect the
interests of the Holders of the Notes.
(c) If the Issuer shall have knowledge of the occurrence of a default
under the Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee, the Note Insurer and the Rating Agencies thereof, and shall specify in
such notice the action, if any, the Issuer is taking with respect to such
default.
(d) Upon any termination of the Servicer's rights and powers pursuant
to the Servicing Agreement, the Indenture Trustee shall promptly notify the
Rating Agencies. As soon as any successor Servicer is appointed, the Indenture
Trustee shall notify the Rating Agencies, specifying in such notice the name and
address of such successor Servicer.
Section 3.08. Investment Company Act.
The Issuer shall at all times conduct its operations so as not to be
subject to, or shall comply with, the requirements of the Investment Company Act
of 1940, as amended (or any successor statute), and the rules and regulations
thereunder.
Section 3.09. Negative Covenants.
The Issuer shall not:
(i) sell, transfer, exchange or otherwise dispose of any portion
of the Trust Estate except as expressly permitted by this Indenture or
the Servicing Agreement;
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(ii) claim any credit on, or make any deduction from, the
principal of, or interest on, any of the Notes by reason of the
payment of any taxes levied or assessed upon any portion of the Trust
Estate;
(iii) 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 the 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;
(iv) incur, issue, assume or otherwise become liable for a
indebtedness other than the Notes;
(v) incur, assume, guaranty or agree to indemnify any Person with
respect to any indebtedness of any Person, except for such
indebtedness as may be incurred by the Issuer in connection with the
issuance of the Notes pursuant to this Indenture;
(vi) dissolve or liquidate in whole or in part (until the Notes
are paid in full);
(vii) (1) permit the validity or effectiveness of this Indenture
or any Grant to be impaired, or permit the lien of this Indenture to
be impaired, amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any covenants or
obligations under this Indenture, except as may be expressly permitted
hereby, (2) permit any lien, charge, security interest, mortgage or
other encumbrance (other than the lien of this Indenture or any
Permitted Encumbrance) to be created on or extend to or otherwise
arise upon or burden the Trust Estate or any part thereof or any
interest therein or the proceeds thereof, or (3) permit the lien of
this Indenture not to constitute a valid perfected first priority
security interest in the Trust Estate; or
(viii) take any other action that should reasonably be expected
to, or fail to take any action if such failure should reasonably be
expected to, cause the Issuer to be taxable as (a) an association
pursuant to Section 7701 of the Code or (b) a taxable mortgage pool
pursuant to Section 7701(i) of the Code.
Section 3.10. Annual Statement as to Compliance.
On or before December 31, 200 , and each December 31 thereafter and
upon receipt of instruction pursuant to the terms of the Management Agreement,
the Issuer shall deliver to the Indenture Trustee, the Note Insurer, the Rating
Agencies and the Underwriters a written statement prepared by the manager
pursuant to the terms of the Management Agreement, signed by an Authorized
Officer of the Owner Trustee, stating that:
(1) a review of the fulfillment by the Issuer during such year of
its obligations under this Indenture has been made under such
Authorized Officer's supervision; and
(2) to the best of such Authorized Officer's knowledge, based on
such review, the Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
Default in the fulfillment of any such covenant or
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condition, specifying each such Default known to such Authorized
Officer and the nature and status thereof.
Section 3.11. Restricted Payments.
The Issuer shall not, directly or indirectly, (i) pay any dividend or
make any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to the Owner Trustee or any owner
of a beneficial interest in the Issuer or otherwise with respect to any
ownership or equity interest or security in or of the Issuer or to the Servicer,
(ii) redeem, purchase, retire or otherwise acquire for value any such ownership
or equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuer may make, or
cause to be made, distributions to the Servicer, the Indenture Trustee, the
Owner Trustee, the Note Insurer and the Certificateholders as contemplated by,
and to the extent funds are available for such purpose under this Indenture, the
Servicing Agreement or the Trust Agreement and the Issuer will not, directly or
indirectly, make or cause to be made payments to or distributions from either
Note Account except in accordance with this Indenture.
Section 3.12. Treatment of Notes as Debt for Tax Purposes.
The Issuer shall treat the Notes as indebtedness for all federal and
state tax purposes.
Section 3.13. Notice of Events of Default.
The Issuer shall give the Indenture Trustee, the Note Insurer, the
Rating Agencies and the Underwriters prompt written notice of each Event of
Default hereunder, each default on the part of the Servicer of its obligations
under the Servicing Agreement and each default on the part of the Seller of its
obligations under the Mortgage Loan Sale Agreement.
Section 3.14. Further Instruments and Acts.
Upon request of the Indenture Trustee or the Note Insurer, the Issuer
will execute and deliver such further instruments and do such further acts as
may be reasonably necessary or proper to carry out more effectively the purpose
of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture.
Whenever the following conditions shall have been satisfied:
(1) either
(A) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 2.07, and (ii)
Notes for whose payment money has
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theretofore been deposited in trust and thereafter repaid to the
Issuer, as provided in Section 3.03) have been delivered to the
Note Registrar for cancellation; or
(B) all Notes not theretofore delivered to the Note
Registrar for cancellation
(i) have become due and payable, or
(ii) will become due and payable at the Final Maturity
Date within one year, or
(iii) are to be called for redemption within one year
under irrevocable arrangements satisfactory to the Indenture
Trustee for the giving of notice of redemption by the
Indenture Trustee in the name, and at the expense, of the
Issuer or the Servicer,
and the Issuer or the Servicer, in the case of clauses (B)(i),
(B)(ii) or (B)(iii) above, has irrevocably deposited or caused to
be deposited with the Indenture Trustee, in trust for such
purpose, an amount sufficient to pay and discharge the entire
indebtedness on such Notes not theretofore delivered to the
Indenture Trustee for cancellation, for principal and interest to
the Final Maturity Date or to the applicable Redemption Date, as
the case may be, and in the case of Notes that were not paid at
the Final Maturity Date of their entire unpaid principal amount,
for all overdue principal and all interest payable on such Notes
to the next succeeding Payment Date therefor;
(2) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer (including, without limitation,
amounts due the Note Insurer hereunder); and
(3) the Issuer has delivered to the Indenture Trustee and the
Note Insurer an Officers' Certificate and an Opinion of Counsel
satisfactory in form and substance to the Indenture Trustee and the
Note Insurer each stating that all conditions precedent herein
providing for the satisfaction and discharge of this Indenture have
been complied with;
then, upon Issuer Request, this Indenture and the lien, rights and interests
created hereby and thereby shall cease to be of further effect, and the
Indenture Trustee and each co-trustee and separate trustee, if any, then acting
as such hereunder shall, at the expense of the Issuer (or of the Servicer in the
case of a redemption by the Servicer), execute and deliver all such instruments
as may be necessary to acknowledge the satisfaction and discharge of this
Indenture and shall pay, or assign or transfer and deliver, to the Issuer or
upon Issuer Order all cash, securities and other property held by it as part of
the Trust Estate remaining after satisfaction of the conditions set forth in
clauses (1) and (2) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Indenture Trustee and the Paying Agent to the Issuer and the
Holders of Notes under Section 3.03, the obligations of the Indenture Trustee to
the Holders of Notes under Section 4.02 and the provisions of Section 2.07 with
respect to lost, stolen, destroyed or mutilated Notes,
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registration of transfers of Notes and rights to receive payments of principal
of and interest on the Notes shall survive.
Section 4.02. Application of Trust Money.
All money deposited with the Indenture Trustee pursuant to Sections
3.03 and 4.01 shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly or
through any Paying Agent, as the Indenture Trustee may determine, to the Persons
entitled thereto, of the principal and interest for whose payment such money has
been deposited with the Indenture Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. Event of Default.
"Event of Default", wherever used herein, means, with respect to Notes
issued hereunder, any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) if the Issuer shall default in the payment on any Payment
Date of any Required Payment Amount or fail to pay the Notes in full
on or before the Final Maturity Date (and in the case of any such
default, such default or failure shall continue for a period of 5 days
unremedied);
(2) if the Issuer shall breach or default in the due observance
of any one or more of the covenants set forth in clauses (i) through
(viii) of Section 3.09;
(3) if the Issuer shall breach, or default in the due observance
or performance of, any other of its covenants in this Indenture, and
such Default shall continue for a period of 30 days after there shall
have been given, by registered or certified mail, to the Issuer and
the Note Insurer by the Indenture Trustee at the direction of the Note
Insurer, or to the Issuer and the Indenture Trustee by the Holders of
Notes representing at least 25% of the Note Balance of the Outstanding
Notes, with the prior written consent of the Note Insurer, a written
notice specifying such Default and requiring it to be remedied and
stating that such notice is a "Notice of Default" hereunder;
(4) if any representation or warranty of the Issuer made in this
Indenture or any certificate or other writing, delivered by the Issuer
pursuant hereto or in connection herewith shall prove to be incorrect
in any material respect as of the time when the same shall have been
made and, within 30 days after there shall have been given, by
registered or certified mail, written notice thereof to the Issuer and
the Note Insurer by the Indenture Trustee at the direction of the Note
Insurer, or to the Issuer and the Indenture Trustee by the Holders of
Notes representing at least 25% of the Note Balance of the Outstanding
Notes, with the prior written consent of the Note Insurer, the
circumstance or condition in
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respect of which such representation or warranty was incorrect shall
not have been eliminated or otherwise cured; provided, however, that
in the event that there exists a remedy with respect to any such
breach that consists of a purchase obligation, repurchase obligation
or right to substitute under the Basic Documents, then such purchase
obligation, repurchase obligation or right to substitute shall be the
sole remedy with respect to such breach and shall not constitute an
Event of Default hereunder;
(5) the entry of a decree or order for relief by a court having
jurisdiction in respect of the Issuer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other
present or future federal or state bankruptcy, insolvency or similar
law, or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or of
any substantial part of its property, or ordering the winding up or
liquidation of the affairs of the Issuer and the continuance of any
such decree or order unstayed and in effect for a period of 60
consecutive days;
(6) the commencement by the Issuer of a voluntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other
present or future federal or state bankruptcy, insolvency or similar
law, or the consent by the Issuer to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or of any
substantial part of its property or the making by the Issuer of an
assignment for the benefit of creditors or the failure by the Issuer
generally to pay its debts as such debts become due or the taking of
corporate action by the Issuer in furtherance of any of the foregoing;
or
(7) the occurrence of an "event of default" under the Insurance
Agreement.
The payment by the Note Insurer of any Insured Payment in an amount
sufficient to cover the related Required Payment Amount pursuant to the
Insurance Policy in respect of any Payment Date shall, at the option of the Note
Insurer, constitute an Event of Default with respect to the Notes.
Section 5.02. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default occurs and is continuing, then and in every
such case, but in each case only with the consent of the Note Insurer in the
absence of a Note Insurer Default, the Indenture Trustee may, and on request of
the Holders of Notes representing not less than 50% of the Note Balance of the
Outstanding Notes, shall, declare all the Notes to be immediately due and
payable by a notice in writing to the Issuer (and to the Indenture Trustee if
given by Noteholders), and upon any such declaration such Notes, in an amount
equal to the Note Balance of such Notes, together with accrued and unpaid
interest thereon to the date of such acceleration, shall become immediately due
and payable, all subject to the prior written consent of the Note Insurer in the
absence of a Note Insurer Default.
At any time after such a declaration of acceleration of maturity of
the Notes has been made and before a judgment or decree for payment of the money
due has been obtained by the Indenture Trustee as hereinafter in this Article
provided the Note Insurer or the Holders of Notes representing more than 50% of
the Note Balance of the Outstanding Notes, with the prior written
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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:
(1) the Issuer has paid or deposited with the Indenture Trustee a sum
sufficient to pay:
(A) all payments of principal of, and interest on, all Notes and
all other amounts that would then be due hereunder or upon such Notes
if the Event of Default giving rise to such acceleration had not
occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances
of the Indenture Trustee, its agents and counsel; and
(2) all Events of Default, other than the nonpayment of the principal
of Notes that have become due solely by such acceleration, have been cured
or waived as provided in Section 5.14.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee.
Subject to the provisions of Section 3.01 and the following sentence,
if an Event of Default occurs and is continuing, the Indenture Trustee shall (at
the direction of the Note Insurer) and may, with the prior written consent of
the Note Insurer, proceed to protect and enforce its rights and the rights of
the Noteholders and the Note Insurer by any Proceedings the Indenture Trustee
deems appropriate to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of
the exercise of any power granted herein, or enforce any other proper remedy.
Any proceedings brought by the Indenture Trustee on behalf of the Noteholders
and the Note Insurer or any Noteholder against the Issuer shall be limited to
the preservation, enforcement and foreclosure of the liens, assignments, rights
and security interests under the Indenture and no attachment, execution or other
unit or process shall be sought, issued or levied upon any assets, properties or
funds of the Issuer, other than the Trust Estate relative to the Notes in
respect of which such Event of Default has occurred. If there is a foreclosure
of any such liens, assignments, rights and security interests under this
Indenture, by private power of sale or otherwise, no judgment for any deficiency
upon the indebtedness represented by the Notes may be sought or obtained by the
Indenture Trustee or any Noteholder against the Issuer. The Indenture Trustee
shall be entitled to recover the costs and expenses expended by it pursuant to
this Article V including reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel.
Section 5.04. Remedies.
If an Event of Default shall have occurred and be continuing and the
Notes have been declared due and payable and such declaration and its
consequences have not been rescinded and annulled, the Indenture Trustee, at the
direction of the Note Insurer (subject to Section 5.17, to
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the extent applicable) shall, for the benefit of the Noteholders and the Note
Insurer, do one or more of the following:
(a) institute Proceedings for the collection of all amounts then
payable on the Notes, or under this Indenture, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer moneys
adjudged due, subject in all cases to the provisions of Sections 3.01 and 5.03;
(b) in accordance with Section 5.17, sell the Trust Estate or any
portion thereof or rights or interest therein, at one or more public or private
Sales called and conducted in any manner permitted by law; (c) institute
Proceedings from time to time for the complete or partial foreclosure of this
Indenture with respect to the Trust Estate;
(d) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and enforce the
rights and remedies of the Indenture Trustee or the Holders of the Notes and the
Note Insurer hereunder; and
(e) refrain from selling the Trust Estate and apply all Remittable
Funds pursuant to Section 5.07.
Section 5.05. Indenture Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or other judicial
Proceeding relative to the Issuer or any other obligor upon any of the Notes or
the property of the Issuer or of such other obligor or their creditors, the
Indenture Trustee (irrespective of whether the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Indenture Trustee shall have made any demand on the Issuer for the
payment of any overdue principal or interest) shall, with the prior written
consent of the Note Insurer, be entitled and empowered, by intervention in such
Proceeding or otherwise to:
(i) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Notes and file such other
papers or documents as may be necessary or advisable in order to have
the claims of the Indenture Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel) and of the Noteholders and
the Note Insurer allowed in such Proceeding, and
(ii) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any
receiver, assignee, trustee, liquidator, or sequestrator (or other
similar official) in any such Proceeding is hereby authorized by each
Noteholder and the Note Insurer to make such payments to the Indenture
Trustee and, in the event that the Indenture Trustee shall consent to
the making of such payments directly to the Noteholders and the Note
Insurer, to pay to the Indenture Trustee any amount due to it for the
reasonable compensation, expenses, disbursements and advances of the
Indenture Trustee, its agents and counsel.
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Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or accept or adopt on behalf of any
Noteholder or the Note Insurer any plan of reorganization, arrangement,
adjustment or composition affecting any of the Notes or the rights of any Holder
thereof, or the Note Insurer, or to authorize the Indenture Trustee to vote in
respect of the claim of any Noteholder or the Note Insurer in any such
Proceeding.
Section 5.06. Indenture Trustee May Enforce Claims Without Possession
of Notes.
All rights of action and claims under this Indenture or any of the
Notes may be prosecuted and enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any Proceeding
relating thereto, and any such Proceeding instituted by the Indenture Trustee,
at the direction of the Note Insurer, shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Notes and the Note Insurer in respect of
which such judgment has been recovered after payment of amounts required to be
paid pursuant to clause (i) Section 5.07.
Section 5.07. Application of Money Collected.
If the Notes have been declared due and payable following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, any money collected by the Indenture Trustee pursuant to this Article
or otherwise and any other monies that may then be held or thereafter received
by the Indenture Trustee as security shall be applied in the following order, at
the date or dates fixed by the Indenture Trustee and, in case of the payment of
the entire amount due on account of principal of, and interest on, the Notes,
upon presentation and surrender thereof:
(i) to the Servicer and Indenture Trustee, the unpaid Monthly
Servicing Fee and Indenture Trustee's Fee due under this Indenture;
(ii) to the Servicer any Monthly Advances and Servicing Advances
previously made that are reimbursable to the Servicer (other than
those included in liquidation expenses for any Liquidated Mortgage
Loan and reimbursed from the related Liquidation Proceeds and from
Insurance Proceeds) under the Servicing Agreement;
(iii) to the PMI Insurer, the amount owing to the PMI Insurer for
the premium payable in respect of the PMI Mortgage Loans;
(iv) to the Note Insurer, the Note Insurer Premium due under the
Insurance Agreement;
(v) to the Noteholders, the Note Interest due under this
Indenture;
(vi) to the Noteholders, the amount of Monthly Principal for the
Notes with respect to such date, in reduction of the Note Balance
until the Note Balance is reduced to zero;
(vii) to the Note Insurer, the amount owing to the Note Insurer
under the Insurance Agreement for reimbursement for prior draws made
on the Insurance Policy in
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respect of the Notes and any other amounts owing to the Note Insurer
under the Insurance Agreement (including any unpaid Note Insurer
Premium in respect of the Notes);
(viii) to the Noteholders, the Overcollateralization Deficiency
Amount, if any, due under this Indenture;
(ix) to the Indenture Trustee pursuant to the terms of the
Servicing Agreement, Transition Expenses in excess of $50,000, if any,
and other costs and expenses, if not paid by the Servicer pursuant to
the Servicing Agreement or the Custodial Agreement; and
(x) to the payment of the Note Balance of the Outstanding Notes,
up to the amount of their Current Note Balances, without preference or
priority of any kind;
Section 5.08. Limitation on Suits.
No Holder of a Note shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Indenture Trustee and the Note Insurer of a continuing Event of
Default;
(2) the Holders of Notes representing not less than 25% of the
Note Balance of the Outstanding Notes shall have made written request
to the Indenture Trustee to institute Proceedings in respect of such
Event of Default in its own name as Indenture Trustee hereunder;
(3) such Holder or Holders have offered to the Indenture Trustee
indemnity in full against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any
such Proceeding;
(5) no direction inconsistent with such written request has been
given to the Indenture Trustee during such 60-day period by the
Holders of Notes representing more than 50% of the Note Balance of the
Outstanding Notes; and
(6) the consent of the Note Insurer shall have been obtained; it
being understood and intended that no one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Indenture to affect, disturb or
prejudice the rights of any other Holders of Notes or to obtain or to
seek to obtain priority or preference over any other Holders or to
enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders of
Notes.
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In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than 50% of the Note Balances of the Outstanding Notes,
the Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken notwithstanding any other provision herein to the contrary.
Section 5.09. Unconditional Rights of Noteholders to Receive Principal
and Interest.
Subject to the provisions in this Indenture (including Sections 3.01
and 5.03) limiting the right to recover amounts due on a Note to recovery from
amounts in the Trust Estate, the Holder of any Note shall have the right, to the
extent permitted by applicable law, which right is absolute and unconditional,
to receive payment of each installment of interest on such Note on the
respective Payment Date for such installments of interest, to receive payment of
each installment of principal of such Note when due (or, in the case of any Note
called for redemption, on the date fixed for such redemption) and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder.
Section 5.10. Restoration of Rights and Remedies.
If the Indenture Trustee, the Note Insurer or any Noteholder has
instituted any Proceeding to enforce any right or remedy under this Indenture
and such Proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Indenture Trustee, the Note Insurer or to such
Noteholder, then and in every such case the Issuer, the Indenture Trustee, the
Note Insurer and the Noteholders shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee, the
Note Insurer and the Noteholders shall continue as though no such Proceeding had
been instituted.
Section 5.11. Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Indenture
Trustee, the Note Insurer or to the Noteholders is intended to be exclusive of
any other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.12. Delay or Omission Not Waiver.
No delay or omission of the Indenture Trustee, the Note Insurer or of
any Holder of any Note to exercise any right or remedy accruing upon any Event
of Default shall impair any such right or remedy or constitute a waiver of any
such Event of Default or an acquiescence therein. Every right and remedy given
by this Article or by law to the Indenture Trustee, the Note Insurer or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Note Insurer or by the Noteholders with
the prior consent of the Note Insurer, as the case may be.
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Section 5.13. Control by Noteholders.
The Holders of Notes representing more than 50% of the Note Balance of
the Outstanding Notes on the applicable Record Date shall, with the consent of
the Note Insurer, have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee or
exercising any trust or power conferred on the Indenture Trustee; provided that:
(1) such direction shall not be in conflict with any rule of law
or with this Indenture;
(2) any direction to the Indenture Trustee to undertake a Sale of
the Trust Estate shall be by the Holders of Notes representing the
percentage of the Note Balance of the Outstanding Notes specified in
Section 5.17(b)(1), unless Section 5.17(b)(2) is applicable; and
(3) the Indenture Trustee may take any other action deemed proper
by the Indenture Trustee that is not inconsistent with such direction;
provided, however, that, subject to Section 6.01, the Indenture
Trustee need not take any action that it determines might involve it
in liability or be unjustly prejudicial to the Noteholders not
consenting.
Section 5.14. Waiver of Past Defaults.
The Holders of Notes representing more than 50% of the Note Balance of
the Outstanding Notes on the applicable Record Date may on behalf of the Holders
of all the Notes, and with the consent of the Note Insurer, waive any past
Default hereunder and its consequences, except a Default:
(1) in the payment of principal or any installment of interest on
any Note; or
(2) in respect of a covenant or provision hereof that under
Section 9.02 cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 5.15. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Note by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Indenture Trustee for any action
taken, suffered or omitted by it as Indenture Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such suit, and that
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section shall not apply to any suit
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instituted by the Indenture Trustee, to any suit instituted by any Noteholder,
or group of Noteholders, holding in the aggregate Notes representing more than
10% of the Note Balance of the Outstanding Notes, or to any suit instituted by
any Noteholder for the enforcement of the payment of any Required Payment Amount
on any Note on or after the related Payment Date or for the enforcement of the
payment of principal of any Note on or after the Final Maturity Date (or, in the
case of any Note called for redemption, on or after the applicable Redemption
Date).
Section 5.16. Waiver of Stay or Extension Laws.
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension of law wherever
enacted, now or at any time hereafter in force, that may affect the covenants
in, or the performance of, this Indenture; and the Issuer (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.17. Sale of Trust Estate.
(a) The power to effect any sale (a "Sale") of any portion of the
Trust Estate pursuant to Section 5.04 shall not be exhausted by any one or more
Sales as to any portion of the Trust Estate remaining unsold, but shall continue
unimpaired until the entire Trust Estate shall have been sold or all amounts
payable on the Notes and under this Indenture with respect thereto shall have
been paid. The Indenture Trustee may from time to time postpone any public Sale
by public announcement made at the time and place of such Sale.
(b) To the extent permitted by law, the Indenture Trustee shall not
(unless directed by the Note Insurer) in any private Sale sell or otherwise
dispose of the Trust Estate, or any portion thereof, unless:
(1) the Holders of Notes representing not less than 50% of the
Note Balance of the Notes then Outstanding consent to or direct the
Indenture Trustee to make such Sale; or
(2) the proceeds of such Sale would be not less than the entire
amount that would be payable to the Holders of the Notes, in full
payment thereof in accordance with Section 5.07, on the Payment Date
next succeeding the date of such Sale.
The purchase by the Indenture Trustee of all or any portion of the
Trust Estate at a private Sale shall not be deemed a Sale or disposition thereof
for purposes of this Section 5.17(b). In the absence of a Note Insurer Default,
no sale hereunder shall be effective without the consent of the Note Insurer.
(c) Unless the Holders of all Outstanding Notes have otherwise
consented or directed the Indenture Trustee, at any public Sale of all or any
portion of the Trust Estate at which a minimum bid equal to or greater than the
amount described in paragraph (2) of subsection (b) of this Section 5.17 has not
been established by the Indenture Trustee and no Person bids an amount
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equal to or greater than such amount, the Indenture Trustee, acting in its
capacity as Indenture Trustee on behalf of the Noteholders, shall prevent such
sale and bid an amount (which shall include the Indenture Trustee's right, in
its capacity as Indenture Trustee, to credit bid) at least $1.00 more than the
highest other bid in order to preserve the Trust Estate on behalf of the
Noteholders.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(1) any Holder or Holders of Notes may bid for and purchase the
property offered for Sale, and upon compliance with the terms of sale
may hold, retain and possess and dispose of such property, without
further accountability, and may, in paying the purchase money
therefor, deliver any Outstanding Notes or claims for interest thereon
in lieu of cash up to the amount that shall, upon distribution of the
net proceeds of such Sale, be payable thereon, and such Notes, in case
the amounts so payable thereon shall be less than the amount due
thereon, shall be returned to the Holders thereof after being
appropriately stamped to show such partial payment;
(2) the Indenture Trustee may bid for and acquire the property
offered for Sale in connection with any public Sale thereof, and, in
lieu of paying cash therefor, may make settlement for the purchase
price by crediting the gross Sale price against the sum of (A) the
amount that would be payable to the Holders of the Notes as a result
of such Sale in accordance with Section 5.07 on the Payment Date next
succeeding the date of such Sale and (B) the expenses of the Sale and
of any Proceedings in connection therewith which are reimbursable to
it, without being required to produce the Notes in order to complete
any such Sale or in order for the net Sale price to be credited
against such Notes, and any property so acquired by the Indenture
Trustee shall be held and dealt with by it in accordance with the
provisions of this Indenture;
(3) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any
portion of the Trust Estate in connection with a Sale thereof,
(4) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney-in-fact of the Issuer to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale
thereof, and to take all action necessary to effect such Sale; and
(5) no purchaser or transferee at such a Sale shall be bound to
ascertain the Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of
any moneys.
Section 5.18. Action on Notes.
The Indenture Trustee's right to seek and recover judgment under this
Indenture shall not be affected by the seeking, obtaining or application of any
other relief under or with respect to this Indenture. Neither the lien of this
Indenture nor any rights or remedies of the Indenture Trustee, the Note Insurer
or the Holders of Notes shall be impaired by the recovery of any
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judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate.
Section 5.19. No Recourse to Other Trust Estates or Other Assets of
the Issuer.
The Trust Estate Granted to the Indenture Trustee as security for the
Notes serves as security only for the Notes. Holders of the Notes shall have no
recourse against the trust estate granted as security for any other series of
Notes issued by the Issuer, and no judgment against the Issuer for any amount
due with respect to the Notes may be enforced against either the trust estate
securing any other series or any other assets of the Issuer, nor may any
prejudgment lien or other attachment be sought against any such other trust
estate or any other assets of the Issuer.
Section 5.20. Application of the Trust Indenture Act.
Pursuant to Section 316(a) of the TIA, all provisions automatically
provided for in Section 316(a) are hereby expressly excluded.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing, the
Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Indenture Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and no implied
covenants or obligations shall be read into this Indenture against the
Indenture Trustee; and
(2) In the absence of bad faith on its part, the Indenture
Trustee may request and conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and
conforming to the requirements of this Indenture. The Indenture
Trustee shall, however, examine such certificates and opinions to
determine whether they conform on their face to the requirements of
this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of subsection (b) of
this Section 6.01;
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(2) 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
(3) The Indenture Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.13 or 5.17 or
exercising any trust or power conferred upon the Indenture Trustee
under this Indenture.
(d) Except with respect to duties of the Indenture Trustee prescribed
by the TIA, as to which this Section 6.01(d) shall not apply, for all purposes
under this Indenture, the Indenture Trustee shall not be deemed to have notice
or knowledge of any Event of Default described in Section 5.01(2), 5.01(5) or
5.01(6) or any Default described in Section 5.01(3) or 5.01(4) or of any event
described in Section 3.05 unless a Responsible Officer assigned to and working
in the Indenture Trustee's corporate trust department has actual knowledge
thereof or unless written notice of any event that is in fact such an Event of
Default or Default is received by the Indenture Trustee at the Corporate Trust
Office, and such notice references the Notes generally, the Issuer, the Trust
Estate or this Indenture.
(e) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it under the Servicing Agreement or otherwise.
(f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to the provisions of this Section.
(g) Notwithstanding any extinguishment of all right, title and
interest of the Issuer in and to the Trust Estate following an Event of Default
and a consequent declaration of acceleration of the Maturity of the Notes,
whether such extinguishment occurs through a Sale of the Trust Estate to another
Person, the acquisition of the Trust Estate by the Indenture Trustee or
otherwise, the rights, powers and duties of the Indenture Trustee with respect
to the Trust Estate (or the proceeds thereof) and the Noteholders and the Note
Insurer and the rights of Noteholders and the Note Insurer shall continue to be
governed by the terms of this Indenture.
(h) The Indenture Trustee or any Custodian appointed pursuant to
Section 8.13 shall at all times retain possession of the Mortgage Files in the
State of or the State of , except for those Mortgage Files or portions thereof
released to the Servicer or the Note Insurer pursuant to this Indenture or the
Servicing Agreement.
Section 6.02. Notice of Default.
Immediately after the occurrence of any Default known to the Indenture
Trustee, the Indenture Trustee shall transmit by mail to the Note Insurer and
the Underwriters notice of each such Default and, within 90 days after the
occurrence of any Default known to the Indenture Trustee, the Indenture Trustee
shall transmit by mail to all Holders of Notes notice of each such Default,
unless such Default shall have been cured or waived; provided, however, that in
no
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event shall the Indenture Trustee provide notice, or fail to provide notice of a
Default known to the Indenture Trustee in a manner contrary to the requirements
of the Trust Indenture Act. Concurrently with the mailing of any such notice to
the Holders of the Notes, the Indenture Trustee shall transmit by mail a copy of
such notice to the Rating Agencies.
Section 6.03. Rights of Indenture Trustee.
(a) Except as otherwise provided in Section 6.01, the Indenture
Trustee may rely on any document believed by it to be genuine and to have been
signed or presented by the proper Person. The Indenture Trustee need not
investigate any fact or matter stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on any such Officer's Certificate or Opinion of Counsel.
(c) With the consent of the Note Insurer, which consent shall not be
unreasonably withheld, the Indenture Trustee may act through agents and shall
not be responsible for the misconduct or negligence of any agent appointed with
due care.
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith that it believes to be authorized or within its
rights or powers.
Section 6.04. Not Responsible for Recitals or Issuance of Notes.
The recitals contained herein and in the Notes, except the
certificates of authentication on the Notes, shall be taken as the statements of
the Issuer, and the Indenture Trustee and the Authenticating Agent assume no
responsibility for their correctness. The Indenture Trustee makes no
representations with respect to the Trust Estate or as to the validity or
sufficiency of this Indenture or of the Notes. The Indenture Trustee shall not
be accountable for the use or application by the Issuer of the Notes or the
proceeds thereof or any money paid to the Issuer or upon Issuer Order pursuant
to the provisions hereof.
Section 6.05. May Hold Notes.
The Indenture Trustee, any Agent, or any other agent of the Issuer, in
its individual or any other capacity, may become the owner or pledgee of Notes
and, subject to Sections 6.07 and 6.13, may otherwise deal with the Issuer or
any Affiliate of the Issuer with the same rights it would have if it were not
Indenture Trustee, Agent or such other agent.
Section 6.06. Money Held in Trust.
Money held by the Indenture Trustee in trust hereunder need not be
segregated from other funds except to the extent required by this Indenture or
by law. The Indenture Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Issuer and
except to the extent of income or other gain on investments that are
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obligations of the Indenture Trustee, in its commercial capacity, and income or
other gain actually received by the Indenture Trustee on investments, which are
obligations of others.
Section 6.07. Eligibility, Disqualification.
Irrespective of whether this Indenture is qualified under the TIA,
this Indenture shall always have a Indenture Trustee who satisfies the
requirements of TIA Sections 310(a)(1) and 310(a)(5). The Indenture Trustee
shall always have a combined capital and surplus as stated in Section 6.08. The
Indenture Trustee shall be subject to TIA Section 310(b).
Section 6.08. Indenture Trustee's Capital and Surplus.
The Indenture Trustee shall at all times have a combined capital and
surplus of at least $50,000,000 or shall be a member of a bank holding company
system, the aggregate combined capital and surplus of which is at least
$100,000,000 and shall at all times be rated " " or better by [Rating Agency]
and " " or better by [Rating Agency]; provided, however, that the Indenture
Trustee's separate capital and surplus shall at all times be at least the amount
required by TIA Section 310(a)(2). If the Indenture Trustee publishes annual
reports of condition of the type described in TIA Section 310(a)(1), its
combined capital and surplus for purposes of this Section 6.08 shall be as set
forth in the latest such report. If at any time the Indenture Trustee shall
cease to be eligible in accordance with the provisions of this Section 6.08 and
TIA Section 310(a)(2), it shall resign immediately in the manner and with the
effect hereinafter specified in this Article.
Section 6.09. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Indenture Trustee and no
appointment of a successor Indenture Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the successor Indenture
Trustee under Section 6.10.
(b) The Indenture Trustee may resign at any time by giving written
notice thereof to the Issuer, the Note Insurer and each Rating Agency, in which
event the Issuer will, with the consent of the Note Insurer (and if the Issuer
fails to do so within 30 days, the Note Issuer may) appoint a successor
Indenture Trustee. If an instrument of acceptance by a successor Indenture
Trustee shall not have been delivered to the Indenture Trustee within 30 days
after the giving of such notice of resignation, the resigning Indenture Trustee
may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee.
(c) The Indenture Trustee may be removed at any time by the Note
Insurer or, with the consent of the Note Insurer, by Act of the Holders
representing at least 51% of the Note Balance of the Outstanding Notes, by
written notice delivered to the Indenture Trustee and to the Issuer.
(d) If at any time:
(1) the Indenture Trustee shall have a conflicting interest
prohibited by Section 6.07 and shall fail to resign or eliminate such
conflicting interest in accordance with Section 6.07 after written
request therefor by the Issuer or by any Noteholder; or
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(2) the Indenture Trustee shall cease to be eligible under
Section 6.08 or shall become incapable of acting or shall be adjudged
a bankrupt or insolvent, or a receiver of the Indenture Trustee or of
its property shall be appointed, or any public officer shall take
charge or control of the Indenture Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, (i) the Issuer by an Issuer Order, with the consent of
the Note Insurer, may remove the Indenture Trustee, and the Issuer shall join
with the Indenture Trustee in the execution, delivery and performance of all
instruments and agreements necessary or proper to appoint a successor Indenture
Trustee acceptable to the Note Insurer and to vest in such successor Indenture
Trustee any property, title, right or power deemed necessary or desirable,
subject to the other provisions of this Indenture; provided, however, if the
Issuer and the Note Insurer do not join in such appointment within fifteen (15)
days after the receipt by it of a request to do so, or in case an Event of
Default has occurred and is continuing, the Indenture Trustee may petition a
court of competent jurisdiction to make such appointment, or (ii) subject to
Section 5.15, and, in the case of a conflicting interest as described in clause
(1) above, unless the Indenture Trustee's duty to resign has been stayed as
provided in TIA Section 310(b), the Note Insurer or any Noteholder who has been
a bona fide Holder of a Note for at least six months may, on behalf of himself
and all others similarly situated, with the consent of the Note Insurer,
petition any court of competent jurisdiction for the removal of the Indenture
Trustee and the appointment of a successor Indenture Trustee.
(e) If the Indenture Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Indenture
Trustee for any cause, the Issuer (and if the Issuer fails to do so within 30
days, the Note Issuer may), by an Issuer Order shall promptly appoint a
successor Indenture Trustee acceptable to the Note Insurer. If within one year
after such resignation, removal or incapability or the occurrence of such
vacancy a successor Indenture Trustee shall be appointed by the Note Insurer or,
with the consent of the Note Insurer, by Act of the Holders of Notes
representing more than 50% of the Note Balance of the Outstanding Notes
delivered to the Issuer and the retiring Indenture Trustee, the successor
Indenture Trustee so appointed shall, forthwith upon its acceptance of such
appointment, become the successor Indenture Trustee and supersede the successor
Indenture Trustee appointed by the Issuer. If no successor Indenture Trustee
shall have been so appointed by the Issuer, the Note Insurer or Noteholders and
shall have accepted appointment in the manner hereinafter provided, any
Noteholder who has been a bona fide Holder of a Note for at least six months
may, on behalf of himself and all others similarly situated, with the consent of
the Note Insurer, petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
(f) The Issuer shall give notice of each resignation and each removal
of the Indenture Trustee and each appointment of a successor Indenture Trustee
to the Holders of Notes and the Note Insurer. Each notice shall include the name
of the successor Indenture Trustee and the address of its Corporate Trust
Office.
Section 6.10. Acceptance of Appointment by Successor.
Every successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer, the Note Insurer and the retiring
Indenture Trustee an instrument accepting
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such appointment, and thereupon the resignation or removal of the retiring
Indenture Trustee shall become effective and such successor Indenture Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Indenture Trustee.
Notwithstanding the foregoing, on request of the Issuer or the successor
Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its
charges, execute and deliver an instrument transferring to such successor
Indenture Trustee all the rights, powers and trusts of the retiring Indenture
Trustee, and shall duly assign, transfer and deliver to such successor Indenture
Trustee all property and money held by such retiring Indenture Trustee
hereunder. Upon request of any such successor Indenture Trustee, the Issuer
shall execute and deliver any and all instruments for more fully and certainly
vesting in and confirming to such successor Indenture Trustee all such rights,
powers and trusts.
No successor Indenture Trustee shall accept its appointment unless at
the time of such acceptance such successor Indenture Trustee shall be qualified
and eligible under this Article.
Section 6.11. Merger, Conversion, Consolidation or Succession to
Business of Indenture Trustee.
Any corporation into which the Indenture Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Indenture Trustee
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of the Indenture Trustee, shall be the successor of
the Indenture Trustee hereunder, provided such corporation shall be otherwise
qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto. In case
any Notes have been authenticated, but not delivered, by the Indenture Trustee
then in office, any successor by merger, conversion or consolidation to such
authenticating Indenture Trustee may adopt such authentication and deliver the
Notes so authenticated with the same effect as if such successor Indenture
Trustee had authenticated such Notes.
Section 6.12. Preferential Collection of Claims Against Issuer.
The Indenture Trustee (and any co-trustee or separate trustee) shall
be subject to TIA Section 311(a), excluding any creditor relationship listed in
TIA Section 31l(b), and an Indenture Trustee (and any co-trustee or separate
trustee) who has resigned or been removed shall be subject to TIA Section 311(a)
to the extent indicated.
Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees.
At any time or times, for the purpose of meeting the legal
requirements of the TIA or of any jurisdiction in which any of the Trust Estate
may at the time be located, the Indenture Trustee shall have power to appoint,
and, upon the written request of the Indenture Trustee, of the Note Insurer or
of the Holders of Notes representing more than 50% of the Note Balance of the
Outstanding Notes with respect to which a co-trustee or separate trustee is
being appointed with the consent of the Note Insurer, the Issuer shall for such
purpose jointly with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to appoint,
one or more Persons approved by the Indenture Trustee either to act as
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co-trustee, jointly with the Indenture Trustee, of all or any part of the Trust
Estate, or to act as separate trustee of any such property, in either case with
such powers as may be provided in the instrument of appointment, and to vest in
such Person or Persons in the capacity aforesaid, any property, title, right or
power deemed necessary or desirable, subject to the other provisions of this
Section. If the Issuer does not join in such appointment within 15 days after
the receipt by it of a request to do so, or in case an Event of Default has
occurred and is continuing, the Indenture Trustee alone shall have power to make
such appointment. All fees and expenses of any co-trustee or separate trustee
shall be payable by the Issuer.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(1) The Notes shall be authenticated and delivered and all
rights, powers, duties and obligations hereunder in respect of the
custody of securities, cash and other personal property held by, or
required to be deposited or pledged with, the Indenture Trustee
hereunder, shall be exercised, solely by the Indenture Trustee.
(2) The rights, powers, duties and obligations hereby conferred
or imposed upon the Indenture Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and
exercised or performed by the Indenture Trustee or by the Indenture
Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate
trustee, except to the extent that under any law of any jurisdiction
in which any particular act is to be performed, the Indenture Trustee
shall be incompetent or unqualified to perform such act, in which
event such rights, powers, duties and obligations shall be exercised
and performed by such co-trustee or separate trustee.
(3) The Indenture Trustee at any time, by an instrument in
writing, executed by it, with the concurrence of the Issuer evidenced
by an Issuer Order, may accept the resignation of or remove any
co-trustee or separate trustee appointed under this Section, and, in
case an Event of Default has occurred and is continuing, the Indenture
Trustee shall have power to accept the resignation of, or remove, any
such co-trustee or separate trustee without the concurrence of the
Issuer upon the written request of the Indenture Trustee, the Issuer
shall join with the Indenture Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to
effectuate such resignation or removal. A successor to any co-trustee
or separate trustee so resigned or removed may be appointed in the
manner provided in this Section.
(4) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Indenture
Trustee, or any other such trustee hereunder.
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(5) Any Act of Noteholders delivered to the Indenture Trustee
shall be deemed to have been delivered to each such co-trustee and
separate trustee.
Section 6.14. Authenticating Agents.
The Issuer shall appoint an Authenticating Agent with power to act on
its behalf and subject to its direction in the authentication and delivery of
the Notes designated for such authentication by the Issuer and containing
provisions therein for such authentication (or with respect to which the Issuer
has made other arrangements, satisfactory to the Indenture Trustee and such
Authenticating Agent, for notation on the Notes of the authority of an
Authenticating Agent appointed after the initial authentication and delivery of
such Notes) in connection with transfers and exchanges under Section 2.06, as
fully to all intents and purposes as though the Authenticating Agent had been
expressly authorized by that Section to authenticate and deliver Notes. For all
purposes of this Indenture (other than in connection with the authentication and
delivery of Notes pursuant to Sections 2.05 and 2.11 in connection with their
initial issuance), the authentication and delivery of Notes by the
Authenticating Agent pursuant to this Section shall be deemed to be the
authentication and delivery of Notes "by the Indenture Trustee." Such
Authenticating Agent shall at all times be a Person that both meets the
requirements of Section 6.07 for the Indenture Trustee hereunder and has an
office for presentation of Notes in the United States of America. The Indenture
Trustee shall initially be the Authenticating Agent and shall be the Note
Registrar as provided in Section 2.06. The office from which the Indenture
Trustee shall perform its duties as Note Registrar and Authenticating Agent
shall be the Corporate Trust Office. Any Authenticating Agent appointed pursuant
to the terms of this Section 6.14 or pursuant to the terms of any supplemental
indenture shall deliver to the Indenture Trustee as a condition precedent to the
effectiveness of such appointment an instrument accepting the trusts, duties and
responsibilities of Authenticating Agent and of Note Registrar or co-Note
Registrar and indemnifying the Indenture Trustee for and holding the Indenture
Trustee harmless against, any loss, liability or expense (including reasonable
attorneys' fees) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance, administration of the trust or
exercise of authority by such Authenticating Agent, Note Registrar or co-Note
Registrar.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section, without the execution or filing of any further act on the part of the
parties hereto or the Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Issuer. The Issuer may at any time terminate the
agency of any Authenticating Agent by giving written notice of termination to
such Authenticating Agent and the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Issuer
shall promptly appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Indenture Trustee, and shall mail notice of
such appointment to all Holders of Notes.
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The Indenture Trustee agrees, subject to Section 6.01(e), to pay to
any Authenticating Agent from time to time reasonable compensation for its
services and the Indenture Trustee shall be entitled to be reimbursed for such
payments pursuant to Section 6.04 of the Servicing Agreement. The provisions of
Sections 2.09, 6.04 and 6.05 shall be applicable to any Authenticating Agent.
Section 6.15. Review of Mortgage Files.
(a) Initial Certification. The Indenture Trustee shall, for the
benefit of the Noteholders and the Note Insurer, cause the Custodian to review
each Mortgage File prior to the Closing Date to ascertain that all documents
required to be included in the Mortgage File are included therein, and shall
cause the Custodian to deliver to the Seller, the Representative, the Depositor,
the Note Insurer, the Indenture Trustee and the Servicer on the Closing Date an
Initial Certification in the form attached as Exhibit E-1 to the Custodial
Agreement with respect to each Mortgage Loan to the effect that, except as
specifically noted on a schedule of exceptions thereto, (A) all documents
required to be contained in the Mortgage File are in its possession, (B) such
documents have been reviewed by it and appear regular on their face and relate
to such Mortgage Loan, and (C) based on its examination and only as to the
foregoing documents, the information set forth on the related Mortgage Loan
Schedule accurately reflects information set forth in the Mortgage File.
It is understood that before making the Initial Certification, the
Indenture Trustee shall cause the Custodian to examine the related Mortgage Loan
Documents to confirm that:
(1) each Mortgage Note and Mortgage bears an original signature
or signatures purporting to be that of the Person or Persons named as
the maker and mortgagor/trustor or, if photocopies are permitted, that
such copies bear a reproduction of such signature or signatures;
(2) except for the endorsement in blank, neither the Mortgage nor
any Assignment, on the face or the reverse side(s) thereof, contains
evidence of any unsatisfied claims, liens, security interests,
encumbrances or restrictions on transfer;
(3) the principal amount of the indebtedness secured by the
related Mortgage is identical to the original principal amount of the
related Mortgage Note;
(4) the Assignment of the related Mortgage from the Seller to the
Indenture Trustee is in the form required pursuant to clause (e) of
the definition of "Mortgage Loan Documents" in the Mortgage Loan Sale
Agreement, and bears an original signature of the Seller and any other
necessary party (or signatures purporting to be that of the Seller and
any such other party) or, if photocopies are permitted, that such
copies bear a reproduction of such signature or signatures;
(5) if intervening Assignments are included in the Mortgage File,
each such intervening Assignment bears an original signature of the
related mortgagee and/or the assignee (and any other necessary party)
(or signatures purporting to be that of each such party) or, if
photocopies are permitted, that such copies bear a reproduction of
such signature or signatures;
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(6) if either a title insurance policy, a preliminary title
report or a written commitment to issue a title insurance policy is
delivered, the address of the real property set forth in such policy,
report or written commitment is identical to the real property address
contained in the related Mortgage; and
(7) if any of a title insurance policy, certificate of title
insurance or a written commitment to issue a title insurance policy is
delivered, such policy, certificate or written commitment is for an
amount not less than the original principal amount of the related
Mortgage Note and such title insurance policy insures that the related
Mortgage creates a first or second lien, senior in priority to all
other deeds of trust, mortgages, deeds to secure debt, financing
statements and security agreements and to any mechanics' liens,
judgment liens or writs of attachment other than the related senior
lien, if applicable, (or if the title insurance policy or certificate
of title insurance has not been issued, the written commitment for
such insurance obligates the insurer to issue such policy for an
amount not less than the original principal amount of the related
Mortgage Note).
(b) Final Certification. On or before one year following the Closing
Date, the Indenture Trustee shall cause the Custodian to deliver to the Seller,
the Representative, the Depositor, the Note Insurer, the Indenture Trustee and
the Servicer a Final Certification in the form attached as Exhibit E-2 to the
Custodial Agreement evidencing the completeness of the Mortgage File for each
Mortgage Loan, except as specifically noted on a schedule of exceptions thereto.
(c) In giving each of the Initial Certification and the Final
Certification, neither the Indenture Trustee nor the Custodian shall be under
any duty or obligation (1) to inspect, review or examine any such documents,
instruments, securities or other papers to determine that they or the signatures
thereto are genuine, enforceable, or appropriate for the represented purpose or
that they have actually been recorded or that they are other than what they
purport to be on their face or (2) to determine whether any Mortgage File should
include a flood insurance policy, any rider, addenda, surety or guaranty
agreement, power of attorney, buy down agreement, assumption agreement,
modification agreement, written assurance or substitution agreement.
(d) Recordation Report. In the event that the Mortgage Loans are
required to be recorded in accordance with the provisions of the Mortgage Loan
Sale Agreement, no later than the fifth Business Day of each third month,
commencing in 200 , the Indenture Trustee shall cause the Custodian to deliver
to the Servicer and the Note Insurer a recordation report dated as of the first
day of such month, identifying those Mortgage Loans for which it has not yet
received (1) an original recorded Mortgage or a copy thereof certified to be
true and correct by the public recording office in possession of such Mortgage
or (2) an original recorded Assignment of the Mortgage to the Indenture Trustee
and any required intervening Assignments or a copy thereof certified to be a
true and correct copy by the public recording office in possession of such
Assignment.
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Section 6.16. Indenture Trustee Fees and Expenses.
The Indenture Trustee shall be entitled to receive the Indenture
Trustee Fee on each Payment Date as provided herein. The Indenture Trustee also
shall be entitled, pursuant to the provisions of Section 6.04 of the Servicing
Agreement, to (i) payment of or reimbursement for expenses, disbursements and
advances incurred or made by the Indenture Trustee in accordance with any of the
provisions of this Agreement (including, but not limited to, the reasonable
compensation and the expenses and disbursements of its counsel and of all
persons not regularly in its employ) as provided in the Servicing Agreement, and
(ii) indemnification against losses, liability and expenses, including
reasonable attorney's fees, incurred, arising out of or in connection with this
Agreement and the Notes as provided in the Servicing Agreement.
Section 6.17. Tax Reporting.
The Indenture Trustee shall provide on an annual basis, or as
otherwise required by the Owner Trustee, all information relating to payments on
the Notes as is reasonably required by the Owner Trustee pursuant to its
obligations under Section 2(b)(i) of the Management Agreement and Section
2.11(k) of the Deposit Trust Agreement.
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses
of Noteholders.
(a) The Issuer shall furnish or cause to be furnished to the Indenture
Trustee (i) semiannually, not less than 45 days nor more than 60 days after the
Payment Date occurring closest to six months after the Closing Date and each
Payment Date occurring at six-month intervals thereafter, all information in the
possession or control of the Issuer, in such form as the Indenture Trustee may
reasonably require, as to names and addresses of the Holders of Notes, and (ii)
at such other times, as the Indenture Trustee may request in writing, within 30
days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished.
(b) In addition to furnishing to the Indenture Trustee the Noteholder
lists, if any, required under subsection (a), the Issuer shall also furnish all
Noteholder lists, if any, required under Section 3.03 at the times required by
Section 3.03.
Section 7.02. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list, if any, furnished to the Indenture Trustee as
provided in Section 7.01 and the names and addresses of the Holders of Notes
received by the Indenture Trustee in its capacity as Note Registrar. The
Indenture Trustee may destroy any list furnished to it as provided in Section
7.01 upon receipt of a new list so furnished.
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(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 Indenture Trustee.
(a) Within 60 days after December 31 of each year (the "reporting
date"), commencing with the year after the issuance of the Notes, (i) the
Indenture Trustee shall, if required by TIA Section 313(a), mail to all Holders
a brief report dated as of such reporting date that complies with TIA Section
313(a); (ii) the Indenture Trustee shall, to the extent not set forth in the
Payment Date Statement pursuant to Section 2.08(d), also mail to Holders of
Notes and the Note Insurer with respect to which it has made advances, any
reports with respect to such advances that are required by TIA Section
313(b)(2); and, the Indenture Trustee shall also mail to Holders of Notes and
the Note Insurer any reports required by TIA Section 313(b)(1). For purposes of
the information required to be included in any such reports pursuant to TIA
Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2), the principal
amount of indenture securities outstanding on the date as of which such
information is provided shall be the Note Balance of the then Outstanding Notes
covered by the report.
(b) A copy of each report required under this Section 7.03 shall, at
the time of such transmission to Holders of Notes and the Note Insurer be filed
by the Indenture Trustee with the Commission and with each securities exchange
upon which the Notes are listed. The Issuer will notify the Indenture Trustee
when the Notes are listed on any securities exchange.
Section 7.04. Reports by Issuer.
The Issuer (a) shall deliver to the Indenture Trustee within 15 days
after the Issuer is required to file the same with the Commission copies of the
annual reports and of the information, documents and other reports (or copies of
such portions of any of the foregoing as the Commission may by rules and
regulations prescribe) that the Issuer is required to file with the Commission
pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as
amended, and (b) shall also comply with the other provisions of TIA Section
314(a).
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. Collection of Moneys.
Except as otherwise expressly provided herein, the Indenture Trustee
may demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Indenture Trustee
pursuant to this Indenture. The Indenture Trustee shall hold all such money and
property received by it as part of the Trust Estate and shall apply it as
provided in this Indenture.
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If the Indenture Trustee shall not have received the Remittable Funds
by close of business on any related Deposit Date, the Indenture Trustee shall,
unless the Issuer or the Servicer shall have made provisions satisfactory to the
Indenture Trustee for delivery to the Indenture Trustee of an amount equal to
such Remittable Funds, deliver a notice, with a copy to the Note Insurer, to the
Issuer and the Servicer of their failure to remit such Remittable Funds and that
such failure, if not remedied by the close of business on the Business Day after
the date upon which such notice is delivered to the Servicer, shall constitute
an event of default under the Servicing Agreement. If the Indenture Trustee
shall subsequently receive any such Remittable Funds by 2:00 p.m. Eastern Time
on such Business Day, such Event of Default shall not be deemed to have
occurred. Notwithstanding any other provision hereof, the Indenture Trustee
shall deliver to the Issuer or the Servicer, or their respective designee or
assignee, any Remittable Funds received with respect to a Mortgage Loan after
the related Deposit Date to the extent that the Issuer or the Servicer,
respectively, previously made payment or provision for payment with respect to
such Remittable Funds in accordance with this Section 8.01, and any such
Remittable Funds shall not be deemed part of the Trust Estate.
Except as otherwise expressly provided in this Indenture and the
Servicing Agreement, if, following delivery by the Indenture Trustee of the
notice described above, the Servicer shall fail to remit the Remittable Funds on
any Deposit Date, the Indenture Trustee shall deliver a second notice to the
Servicer, the Issuer and the Note Insurer by 2:00 p.m. Eastern Time on the third
Business Day prior to the related Payment Date indicating that an event of
default occurred and is continuing under the Servicing Agreement. Thereupon, the
Indenture Trustee shall take such actions as are required of the Indenture
Trustee under Article VI of the Servicing Agreement. In addition, if a default
occurs in any other performance required under the Servicing Agreement, the
Indenture Trustee may, and upon the request of the Note Insurer or, with the
consent of the Note Insurer, the Holders of Notes representing more than 50% of
the Note Balance of the Outstanding Notes shall, take such action as may be
appropriate to enforce 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 to proceed thereafter as provided in Article V.
Section 8.02. Note Account; Distributions.
(a) The Issuer hereby directs the Indenture Trustee to establish, at
the Corporate Trust Office, one or more separate trust accounts that shall
collectively be the "Note Account" on or before the Closing Date. The Indenture
Trustee shall promptly deposit in the Note Account (i) all Remittable Funds
received by it from the Servicer pursuant to the Servicing Agreement, (ii) any
other funds from any deposits to be made by the Servicer pursuant to the
Servicing Agreement, (iii) any amount required to be deposited in the Note
Account pursuant to Section 8.01, (iv) all amounts received pursuant to Section
8.03, and (v) all other amounts received for deposit in the Note Account,
including the payment of any Purchase Price for a Mortgage Loan received by the
Indenture Trustee. All amounts that are deposited from time to time in a Note
Account are subject to withdrawal by the Indenture Trustee for the purposes set
forth in subsections (c) and (d) of this Section 8.02. All funds withdrawn from
the Note Account pursuant to subsection (c) of this Section 8.02 for the purpose
of making payments to the Holders of Notes shall be applied in accordance with
Section 3.03.
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(b) So long as no Default or Event of Default shall have occurred and
be continuing, amounts held in the Note Accounts shall be invested in Permitted
Investments, which Permitted Investments shall mature no later than the Business
Day preceding the immediately following Payment Date.
All income or other gains, if any, from investment of moneys deposited
in the Note Accounts shall be for the benefit of the Servicer and on each
Payment Date, any such amounts may be released from the Note Accounts and paid
to the Servicer as part of its compensation for acting as Servicer. Any loss
resulting from such investment of moneys deposited in a Note Account shall be
reimbursed immediately as incurred to the Note Account by the Servicer. Subject
to Section 6.01 and the preceding sentence, neither the Indenture Trustee nor
the Servicer shall in any way be held liable by reason of any insufficiency in
the Note Accounts.
(c) On each Payment Date, the Indenture Trustee shall withdraw amounts
on deposit in the Note Account and pay on a pari passu basis the Indenture
Trustee Fee, Transition Expenses, if any not paid by the Servicer pursuant to
the Servicing Agreement (not to exceed $50,000 in the aggregate), any gains or
income from investments on the Note Account to the Servicer and, provided notice
is given to the Indenture Trustee no later than the 4th Business Day prior to
the Payment Date and to the extent such amounts have not been withdrawn pursuant
to Sections 2.02 and 4.01 of the Servicing Agreement, amounts required to pay
the Servicer any unpaid Servicing Fees then due and to reimburse the Servicer
for Monthly Advances and Servicing Advances previously made by, and not
previously reimbursed to or retained by, the Servicer, which are so reimbursable
to the Servicer pursuant to the Servicing Agreement (as reported in writing by
the Servicer to the Indenture Trustee). After payment of such amounts, unless
the Notes have been declared due and payable pursuant to Section 5.02 and moneys
collected by the Indenture Trustee are being applied in accordance with Section
5.07, Available Funds on deposit in the Note Account on any Payment Date or
Redemption Date shall be withdrawn from such Note Account, in the amounts
required, for application on such Payment Date as follows:
(i) first, to the PMI Insurer, the amount owing for such Payment
Date to the PMI Insurer for the premium payable in respect of the PMI
Mortgage Loans;
(ii) second, to the Note Insurer, the Note Insurer Premium for
such Payment Date in respect of the Notes;
(iii) third, to the Noteholders, the Note Interest with respect
to such Payment Date;
(iv) fourth, to the Noteholders, the amount of Monthly Principal
for the Notes with respect to such Payment Date, in reduction of the
Note Balance until the Note Balance is reduced to zero;
(v) fifth, to the Note Insurer, the amount owing to the Note
Insurer under the Insurance Agreement for reimbursement for prior
draws made on the Insurance Policy in respect of the Notes and any
other amounts owing to the Note Insurer under the Insurance Agreement
(including any unpaid Note Insurer Premium in respect of the Notes);
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(vi) sixth, to the Noteholders, the Overcollateralization
Deficiency Amount, if any, on such Payment Date (after giving effect
to application of Monthly Principal for such Payment Date), in
reduction of the Note Balance until the Note Balance is reduced to
zero; and
(vii) seventh, to the Indenture Trustee pursuant to the terms of
the Servicing Agreement, Transition Expenses in excess of $50,000, if
any, and other costs and expenses, if not paid by the Servicer
pursuant to the Servicing Agreement or the Custody Agreement.
(d) On or after each Payment Date, so long as the Indenture Trustee
shall have prepared a Payment Date Statement in respect of such Payment Date and
(1) shall have made, or, in accordance with Section 3.03, set aside from amounts
in the Note Account an amount sufficient to make, the payments required to be
made as set forth in Section 8.02(c) as indicated in such Payment Date
Statement, and (2) shall have set aside any amounts that have been deposited in
the Note Account prior to such time that represent amounts that are to be used
to make payments on the Notes on the next succeeding Payment Date, the cash
balance, if any, then remaining in such Note Account shall be withdrawn from
such Note Account by the Indenture Trustee and, so long as no Default or Event
of Default shall have occurred and be continuing, shall be released from the
lien of this Indenture and paid by the Indenture Trustee to the Issuer.
(e) Any payments made by the Indenture Trustee to the Issuer pursuant
to this Section 8.02 shall be remitted to the Certificate Distribution Account
established and maintained pursuant to the Trust Agreement.
(f) In the event the Indenture Trustee is required to establish a
Collection Account pursuant to the Servicing Agreement, the Indenture Trustee
shall establish and maintain such account in the manner required under the
Servicing Agreement. The Indenture Trustee shall reinvest amounts in the
Collection Account at the direction of the Servicer in Permitted Investments.
All income or other gains, if any, from investment of moneys deposited in the
Collection Account shall be for the benefit of the Servicer, and the Indenture
Trustee shall release any such amounts from the Collection Account to the
Servicer on each Deposit Date.
Section 8.03. Claims Upon the Insurance Policy; Insurance Policy
Payments Account.
(a) If, by the close of business on the third Business Day prior to a
Payment Date, the Indenture Trustee determines that a Deficiency Amount for any
Payment Date is greater than zero or that a claim may be made under the
Insurance Policy in respect to any amount paid to Noteholders which is
recoverable in bankruptcy as a preference, then the Indenture Trustee shall give
notice to the Note Insurer by telephone or telecopy of the amount of such
Deficiency Amount or preference. Such notice of such Deficiency Amount shall be
confirmed in writing in the form set forth as Exhibit A to the Endorsement of
the Insurance Policy, to the Note Insurer and the Fiscal Agent (as defined in
the Insurance Policy), if any, at or before 12:00 noon New York time on the
third Business Day prior to such Payment Date. Following Receipt (as defined in
the Insurance Policy) by the Note Insurer of such notice in such form, the Note
Insurer will pay any amount payable under the Insurance Policy on the later to
occur of (i) 12:00 noon New
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York time on the third Business Day following such receipt and (ii) 12:00 noon
New York time on the Payment Date to which such deficiency relates, as provided
in the Endorsement to the Insurance Policy.
(b) The Indenture Trustee shall establish a separate special purpose
trust account for the benefit of Holders of the Notes and the Note Insurer
referred to herein as the "Insurance Policy Payments Account" over which the
Indenture Trustee shall have exclusive control and sole right of withdrawal. The
Indenture Trustee shall deposit any amount paid under the Insurance Policy in
the Insurance Policy Payments Account and distribute such amount only for
purposes of payment to Holders of Notes of the Insured Payment for which a claim
was made, and such amount may not be applied to satisfy any costs, expenses or
liabilities of the Servicer, the Indenture Trustee or the Trust Estate. Amounts
paid under the Insurance Policy shall be transferred to the Note Account in
accordance with the next succeeding paragraph and disbursed by the Indenture
Trustee to Holders of Notes in accordance with Section 8.02(c). It shall not be
necessary for such payments to be made by checks or wire transfers separate from
the checks or wire transfers used to pay the Insured Payment with other funds
available to make such payment. However, the amount of any payment of principal
of or interest on the Notes to be paid from funds transferred from the Insurance
Policy Payments Account shall be noted as provided in paragraph (c) below in the
Note Register and in the statement to be furnished to Holders of the Notes
pursuant to Section 7.02. Funds held in the Insurance Policy Payments Account
shall not be invested. Proceeds of the Insurance Policy shall not be considered
payment by the Issuer with respect to such Notes, and the Note Insurer shall
become the owner of such unpaid amounts due from the Issuer in respect of such
Insured Payments as the deemed assignee and subrogee of such Noteholders and
shall be entitled to received the reimbursement in respect thereof. The
Indenture Trustee hereby agrees on behalf of each Noteholder for the benefit of
the Note Insurer that it recognizes that to the extent the Note Insurer makes
Insured Payments for the benefit of the Noteholders, the Note Insurer will be
entitled to receive the related reimbursement in accordance with the priority of
distributions referenced in Section 8.02(c) hereof.
(c) Each Noteholder, by its purchase of Notes, and the Indenture
Trustee hereby agree that, unless a Note Insurer Default exists and is
continuing, the Note Insurer shall have the right to direct all matters relating
to the Notes in any proceeding in a bankruptcy of the Issuer, including, without
limitation, any proceeding relating to a Preference Claim and the posting of any
surety or Note pending any such appeal.
(d) Unless a Note Insurer Default exists and is continuing, the
Indenture Trustee shall cooperate in all respects with any reasonable request by
the Note Insurer for action to preserve or enforce the Note Insurer's rights or
interests hereunder without limiting the rights or affecting the interests of
the Noteholders as otherwise set forth herein.
(e) The Indenture Trustee shall surrender the Insurance Policy to the
Note Insurer for cancellation upon the expiration of the term of the Insurance
Policy as provided in the Insurance Agreement.
On any Payment Date with respect to which a claim has been made under
the Insurance Policy, the amount of any funds received by the Indenture Trustee
as a result of any claim under the Insurance Policy, to the extent required to
make the Insured Payment on such Payment Date,
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shall be withdrawn from the Insurance Policy Payments Account and deposited in
the Distribution Account and applied by the Indenture Trustee, together with the
other funds to be withdrawn from the Note Account pursuant to Section 8.02(c)
directly to the payment in full of the Insured Payment due on the Notes. Funds
received by the Indenture Trustee as a result of any claim under the Insurance
Policy shall be deposited by the Indenture Trustee in the Insurance Policy
Payments Account and used solely for payment to the Holders of the Notes and may
not be applied to satisfy any costs, expenses or liabilities of the Servicer,
the Indenture Trustee, or the Trust Estate. Any funds remaining in the Insurance
Policy Payments Account on the first Business Day following a Payment Date shall
be remitted to the Note Insurer, pursuant to the instructions of the Note
Insurer, by the end of such Business Day.
(f) The Indenture Trustee shall keep a complete and accurate record of
the amount of interest and principal paid in respect of any Note from moneys
received under the Insurance Policy. The Note Insurer shall have the right to
inspect such records at reasonable times during normal business hours upon one
Business Day's prior notice to the Indenture Trustee.
(g) The Indenture Trustee shall promptly notify the Note Insurer and
Fiscal Agent of any proceeding or the institution of any action, of which a
Responsible Officer of the Indenture Trustee has actual knowledge seeking the
avoidance as a preferential transfer under applicable bankruptcy, insolvency,
receivership or similar law (a "Preference Claim") of any Insured Payment made
with respect to the Notes. Each Holder of the Notes, by its purchase of such
Certificates, the Servicer, and the Indenture Trustee hereby agree that the Note
Insurer (so long as no Note Insurer Default has occurred and is continuing) may
at any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim, including, without
limitation, (i) the direction of any appeal of any order relating to such
Preference Claim and (ii) the posting of any surety, supersedeas or performance
bond pending any such appeal. In addition and without limitation of the
foregoing, the Note Insurer shall be subrogated to the rights of the Servicer,
the Indenture Trustee, and each Holder of the Notes in the conduct of any such
Preference Claim, including, without limitation, all rights of any party to an
adversary proceeding action with respect to any court order issued in connection
with any such Preference Claim.
Section 8.04. General Provisions Regarding the Note Accounts and
Mortgage Loans.
(a) Each Note Account shall relate solely to the Notes and to the
Mortgage Loans, Permitted Investments and other property securing the Notes.
Funds and other property in the Note Account shall not be commingled with any
other moneys or property of the Issuer or any Affiliate thereof except as
otherwise expressly provided for herein. Notwithstanding the foregoing, the
Indenture Trustee may hold any funds or other property received or held by it as
part of the Note Account in collective accounts maintained by it in the normal
course of its business and containing funds or property held by it for other
Persons (which may include the Issuer or an Affiliate), provided that such
accounts are under the sole control of the Indenture Trustee and the Indenture
Trustee maintains adequate records indicating the ownership of all such funds or
property and the portions thereof held for credit to a Note Account.
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(b) If any amounts are needed for payment from the Note Account and
sufficient uninvested funds are not available therein to make such payment, the
Indenture Trustee shall cause to be sold or otherwise converted to cash a
sufficient amount of the investments in such Note Account.
(c) The Indenture Trustee shall, at all times while any Notes are
Outstanding, maintain in its possession, or in the possession of an agent whose
actions with respect to such items are under the sole control of the Indenture
Trustee, all certificates or other instruments, if any, evidencing any
investment of funds in the Note Account. The Indenture Trustee shall relinquish
possession of such items, or direct its agent to do so, only for purposes of
collecting the final payment receivable on such investment or certificate or, in
connection with the sale of any investment held in the Note Account, against
delivery of the amount receivable in connection with any sale.
(d) The Indenture Trustee shall not invest any part of the Trust
Estate in Permitted Investments that constitute uncertificated securities (as
defined in Section 8-102 of the Uniform Commercial Code, as enacted in the
relevant jurisdiction) or in any other book-entry securities unless it has
received an Opinion of Counsel reasonably satisfactory in form and substance to
the Indenture Trustee setting forth, with respect to each type of security for
which authority to invest is being sought, the procedures that must be followed
to maintain the lien and security interest created by this Indenture with
respect to the Trust Estate.
Section 8.05. Releases of Defective Mortgage Loans.
Upon notice or discovery that any of the representations or warranties
of the Seller set forth in Section 4(b) and Exhibit B of the Mortgage Loan Sale
Agreement was materially incorrect or otherwise misleading with respect to any
Mortgage Loan as of the time made, the Indenture Trustee shall direct the Seller
to either (i) within 60 days after the Seller receives actual knowledge of such
incorrectness, eliminate or otherwise cure the circumstance or condition in
respect of which such representation or warranty was incorrect as of the time
made, (ii) withdraw such Defective Mortgage Loan from the lien of this Indenture
following the expiration of such 60-day period by depositing to the Note Account
an amount equal to the Purchase Price for such Mortgage Loan or (iii) substitute
a Qualified Replacement Mortgage Loan for such Defective Mortgage Loan and
deposit any Purchase Price required to be paid in connection with such
substitution pursuant to Section 7 of the Mortgage Loan Sale Agreement, all as
provided in Section 7 of the Mortgage Loan Sale Agreement. Upon any purchase of
or substitution for a Defective Mortgage Loan by the Seller in accordance with
Section 7 of the Mortgage Sale Agreement, the Indenture Trustee shall deliver
the Mortgage File relating to such Defective Mortgage Loan to the Seller, and
the Issuer and the Indenture Trustee shall execute such instruments of transfer
as are necessary to convey title to such Defective Mortgage Loan to the Seller
from the lien of this Indenture.
Section 8.06. Reports by Indenture Trustee to Noteholders; Access to
Certain Information.
On each Payment Date, the Indenture Trustee shall make available the
written report required by Section 2.08(d) to Noteholders of record as of the
related Record Date (including the
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Clearing Agency, if any). via the Indenture Trustee's internet website and its
fax-on-demand service. The Indenture Trustee's internet website shall be
initially located at " ". Assistance in using the website or the fax-on-demand
service can be obtained by calling the Indenture Trustee's customer service desk
at . Noteholders that are unable to use the above distribution options are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such.
The Indenture Trustee shall make available at its Corporate Trust
Office, during normal business hours, for review by any Noteholder or any person
identified to the Indenture Trustee as a prospective Noteholder, originals or
copies of the following items: (a) the Indenture and any amendments thereto, (b)
all Payment Date Statements delivered to the Issuer since the Closing Date, (c)
any Officers' Certificates delivered to the Indenture Trustee since the Closing
Date as described in the Indenture and (d) any Accountants' reports delivered to
the Indenture Trustee since the Closing Date as required under the Servicing
Agreement. Copies of any and all of the foregoing items will be available from
the Indenture Trustee upon request; however, the Indenture Trustee will be
permitted to require payment of a sum sufficient to cover the reasonable costs
and expenses of providing such copies and shall not be required to provide such
copies without reasonable assurances that such sum will be paid.
Section 8.07. Trust Estate Mortgage Files.
(a) The Indenture Trustee shall release Mortgage Files or portions
thereof to the Servicer on the terms specified in the Servicing Agreement.
(b) The Indenture Trustee shall, at such time as there are no Notes
outstanding, release all of the Trust Estate to the Issuer (other than any cash
held for the payment of the Notes pursuant to Section 3.03 or 4.02).
Section 8.08. Amendment to Servicing Agreement.
The Indenture Trustee may, without the consent of any Holder, enter
into or consent to any amendment or supplement to the Servicing Agreement for
the purpose of increasing the obligations or duties of any party other than the
Indenture Trustee or the Holders of the Notes. The Indenture Trustee may, in its
discretion, decline to enter into or consent to any such supplement or
amendment: (i) unless the Indenture Trustee receives an Opinion of Counsel that
the position of the Holders would not be materially adversely affected or
written confirmation from the Rating Agencies that the then-current implied
ratings on the Notes (without taking into account the Insurance Policy) would
not be adversely affected by such supplement or amendment or (ii) if its own
rights, duties or immunities would be adversely affected.
Section 8.09. Delivery of the Mortgage Files Pursuant to Servicing
Agreement.
As is appropriate for the servicing or foreclosure of any Mortgage
Loan, the Indenture Trustee shall cause the Custodian to deliver to the Servicer
of such Mortgage the Mortgage Files for such Mortgage Loan upon receipt by the
Indenture Trustee and the Custodian on or prior to the date such release is to
be made of:
(a) such Officers' Certificates, if any, as are required by the
Servicing Agreement; and
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(b) a "Request for Release" in the form prescribed by the Servicing
Agreement, executed by the Servicer, providing that the Servicer will hold or
retain the Mortgage Files in trust for the benefit of the Indenture Trustee, the
Note Insurer and the Holders of Notes.
Section 8.10. Servicer as Agent.
In order to facilitate the servicing of the Mortgage Loans by the
Servicer of such Mortgage Loans, the Servicer of the Mortgage Loans has been
appointed by the Issuer to retain, in accordance with the provisions of the
Servicing Agreement and this Indenture, all Remittable Funds on such Mortgage
Loans prior to their deposit into the Note Account on or prior to the related
Deposit Date.
Section 8.11. Termination of Servicer.
In the event of an event of default specified in Section 6.01 of the
Servicing Agreement, the Indenture Trustee may, with the consent of the Note
Insurer, and shall, upon the direction of the Note Insurer (or as otherwise
provided in the Servicing Agreement), terminate the Servicer as provided in
Section 6.01 and Section 6.02 of the Servicing Agreement. If the Indenture
Trustee terminates the Servicer, the Indenture Trustee shall, pursuant to
Sections 6.01 and 6.02 of the Servicing Agreement, assume the duties of the
Servicer or appoint a successor servicer acceptable to the Issuer, the Note
Insurer and the Rating Agencies and meeting the requirements set forth in the
Servicing Agreement.
Section 8.12. Opinion of Counsel.
The Indenture Trustee shall be entitled to receive at least five
Business Days' notice of any action to be taken pursuant to Sections 8.07(a)
(other than in connection with releases of Mortgage Loans that were the subject
of a Full Prepayment of the type described in clause (i) of the definition of
the term "Full Prepayment") and 8.08, accompanied by copies of any instruments
involved, and the Indenture Trustee shall be entitled to receive an Opinion of
Counsel, in form and substance reasonably satisfactory to the Indenture Trustee,
stating the legal effect of any such action, outlining the steps required to
complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with. Counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
Section 8.13. Appointment of Custodians.
The Indenture Trustee may, at the written direction of the Issuer and
at no additional cost to the Issuer or to the Indenture Trustee, with the
consent of the Note Insurer, appoint one or more Custodians to hold all or a
portion of the Mortgage Files as agent for the Indenture Trustee. Each Custodian
shall (i) be a financial institution supervised and regulated by the Comptroller
of the Currency, the Board of Governors of the Federal Reserve System, the
Office of Thrift Supervision, or the Federal Deposit Insurance Corporation; (ii)
have combined capital and surplus of at least $10,000,000; (iii) be equipped
with secure, fireproof storage facilities, and have adequate controls on access
to assure the safety and security of the Mortgage Files; (iv) utilize in its
custodial function employees who are knowledgeable in the handling of
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mortgage documents and of the functions of a mortgage document custodian; and
(v) satisfy any other reasonable requirements that the Issuer may from time to
time deem necessary to protect the interests of Noteholders and the Note Insurer
in the Mortgage Files. Each Custodian shall be subject to the same obligations
and standard of care as would be imposed on the Indenture Trustee hereunder
assuming the Indenture Trustee retained the Mortgage Files directly. The
appointment of one or more Custodians shall not relieve the Indenture Trustee
from any of its obligations hereunder. If the Servicer is appointed as a
Custodian in accordance with this Section 8.14, it shall fulfill its servicing
and custodial duties and obligations through separate departments and, if it
maintains a trust department, shall fulfill its custodial duties and obligations
through such trust department.
Section 8.14. Rights of the Note Insurer to Exercise Rights of
Noteholders.
By accepting its Notes, each Noteholder agrees that unless a Note
Insurer Default exists, the Note Insurer shall have the right to exercise all
rights of the Noteholders under this Agreement without any further consent of
the Noteholders, including, without limitation:
(i) the right to require the Servicer to effect foreclosures upon
Mortgage Loans upon failure of the Servicer to do so;
(ii) the right to require the Seller to repurchase or substitute
for Defective Mortgage Loans pursuant to Section 8.05;
(iii) the right to direct the actions of the Indenture Trustee
during the continuance of an Event of Default; and
(iv) the right to vote on proposed amendments to this Indenture.
In addition, each Noteholder agrees that, unless a Note Insurer
Default exists, the rights specifically set forth above may be exercised by the
Noteholders only with the prior written consent of the Note Insurer.
Except as otherwise provided in Section 8.03 and notwithstanding any
provision in this Indenture to the contrary, so long as a Note Insurer Default
has occurred and is continuing, the Note Insurer shall have no rights to
exercise any voting rights of the Noteholders hereunder, nor shall the Indenture
Trustee be required to obtain the consent of, or act at the direction of, the
Note Insurer.
Section 8.15. Trust Estate and Accounts Held for Benefit of the Note
Insurer.
The Indenture Trustee shall hold the Trust Estate and the Mortgage
Files for the benefit of the Noteholders and the Note Insurer and all references
in this Agreement and in the Notes to the benefit of Holders of the Notes shall
be deemed to include the Note Insurer (provided there does not exist a Note
Insurer Default).
All notices, statements, reports, certificates or opinions required by
this Agreement to be sent to any other party hereto or to the Noteholders shall
also be sent to the Note Insurer.
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Section 8.16. [Reserved.]
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
With the consent of the Note Insurer and without the consent of the
Holders of any Notes, the Issuer and the Indenture Trustee, at any time and from
time to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(1) 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;
(2) to add to the conditions, limitations and restrictions on the
authorized amount, terms and purposes of the issuance, authentication
and delivery of any Notes, as herein set forth, additional conditions,
limitations and restrictions thereafter to be observed;
(3) to evidence the succession of another Person to the Issuer to
the extent permitted herein, and the assumption by any such successor
of the covenants of the Issuer herein and in the Notes contained;
(4) to add to the covenants of the Issuer, for the benefit of the
Holders of all Notes and the Note Insurer or to surrender any right or
power herein conferred upon the Issuer;
(5) to cure any ambiguity, to correct or supplement any provision
herein that may be defective or inconsistent with any other provision
herein, or to amend any other provisions with respect to matters or
questions arising under this Indenture, which shall not be
inconsistent with the provisions of this Indenture, provided that such
action shall not adversely affect in any material respect the
interests of the Holders of the Notes or the Holders of the
Certificates; and provided, further, that the amendment shall not be
deemed to adversely affect in any material respect the interests of
the Holders of the Notes and the Note Insurer if the Person requesting
the amendment obtains letters from the Rating Agencies that the
amendment would not result in the downgrading or withdrawal of the
implied ratings then assigned to the Notes (without taking into
account the Insurance Policy); or
(6) 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.
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Section 9.02. Supplemental Indentures With Consent of Noteholders.
With the consent of the Note Insurer and with the consent of Holders
of Notes representing not less than a majority of the Note Balance of all
Outstanding Notes by Act of said Holders delivered to the Issuer and the
Indenture Trustee, the Issuer and the Indenture Trustee may enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Notes under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Note
affected thereby:
(1) change any Payment Date or the Final Maturity Date of the
Notes or reduce the principal amount thereof, the Note Interest Rate
thereon or the Redemption Price with respect thereto, change the
earliest date on which any Note may be redeemed at the option of the
Issuer, change any place of payment where, or the coin or currency in
which, any Note or any interest thereon is payable, or impair the
right to institute suit for the enforcement of the payment of any
installment of interest due on any Note on or after the Final Maturity
Date thereof or for the enforcement of the payment of the entire
remaining unpaid principal amount of any Note on or after the Final
Maturity Date (or, in the case of redemption, on or after the
applicable Redemption Date);
(2) reduce the percentage of the Note Balance of the Outstanding
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with provisions of this
Indenture or Defaults hereunder and their consequences provided for in
this Indenture;
(3) modify any of the provisions of this Section, Section 5.13 or
Section 5.17(b), except to increase any percentage specified therein
or to provide that certain other provisions of this Indenture cannot
be modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;
(4) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(5) permit the creation of any lien other than the lien of this
Indenture with respect to any part of the Trust Estate (except for
Permitted Encumbrances) or terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Note
of the security afforded by the lien of this Indenture;
(6) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the Required Payment Amount for any
Payment Date (including the calculation of any of the individual
components of such Required Payment Amount) or to affect rights of the
Holders of the Notes to the benefits of any provisions for the
mandatory redemption of Notes contained herein; or
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(7) incur any indebtedness, other than the Notes, that would
cause the Issuer or the Trust Estate to be treated as a "taxable
mortgage pool" within the meaning of Code Section 7701(i).
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee
of any supplemental indenture pursuant to this Section, the Indenture Trustee
shall mail to the Holders of the Notes to which such supplemental indenture
relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 9.03. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Indenture Trustee shall be entitled to
receive, and (subject to Section 6.01) shall be fully protected in relying upon,
an Opinion of Counsel stating that the execution of such supplemental indenture
is authorized or permitted by this Indenture. The Indenture Trustee may, but
shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee's own rights, duties or immunities under this
Indenture or otherwise. The Issuer shall cause executed copies of any
Supplemental Indentures to be delivered to the Rating Agencies and the Note
Insurer.
Section 9.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes to which such supplemental indenture relates that have theretofore been
or thereafter are authenticated and delivered hereunder shall be bound thereby.
Section 9.05. Conformity With Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
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Section 9.06. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and if required by the
Indenture Trustee shall, bear a notation in form approved by the Indenture
Trustee as to any matter provided for in such supplemental indenture. If the
Issuer shall so determine, new Notes so modified as to conform, in the opinion
of Indenture Trustee and the Issuer, to any such supplemental indenture may be
prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
Section 9.07. Amendments to Governing Documents.
The Indenture Trustee shall, subject to Sections 9.01 and 9.02 hereof,
upon Issuer Request, consent to any proposed amendment to the Issuer's governing
documents, or an amendment to or waiver of any provision of any other document
relating to the Issuer's governing documents, such consent to be given without
the necessity of obtaining the consent of the Holders of any Notes upon receipt
by the Indenture Trustee of:
(i) an Officers' Certificate, to which such proposed amendment or
waiver shall be attached, stating that such attached copy is a true
copy of the proposed amendment or waiver and that all conditions
precedent to such consent specified in this Section 9.07 have been
satisfied; and
(ii) written confirmation from the Rating Agencies that the
implementation of the proposed amendment or waiver will not adversely
affect their implied ratings of the Notes (without taking into account
the Insurance Policy).
Notwithstanding the foregoing, the Indenture Trustee may decline to
consent to a proposed waiver or amendment that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that any
Person obtain the consent of the Indenture Trustee to any amendment or waiver or
any provision of any document where the making of such amendment or the giving
of such waiver without obtaining the consent of the Indenture Trustee is not
prohibited by this Indenture or by the terms of the document that is the subject
of the proposed amendment or waiver.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption.
(a) All the Notes may be redeemed in whole, but not in part, on or
after the Initial Redemption Date at the Redemption Price at the option of the
holders of a majority of the ownership interest of the Issuer (the "Residual
Majority"), or at the option of the Servicer if the Residual Majority shall not
have exercised its option to direct the Servicer to redeem the Notes on such
Redemption Date or, if such option is not exercised by the Servicer, at the
option of the
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Note Insurer; provided, however, that funds in an amount equal to the Redemption
Price, plus any amounts owed to the Note Insurer under the Insurance Agreement,
any unreimbursed Nonrecoverable Advances and any unreimbursed amounts due and
owing to the Indenture Trustee hereunder, must have been deposited with the
Indenture Trustee prior to the Indenture Trustee's giving notice of such
redemption pursuant to Section 10.02 or the Issuer shall have complied with the
requirements for satisfaction and discharge of the Notes specified in Section
4.01. Notice of the election to redeem the Notes shall be furnished to the
Indenture Trustee not later than thirty (30) days prior to the Payment Date
selected for such redemption, whereupon all such Notes shall be due and payable
on such Payment Date upon the furnishing of a notice pursuant to Section 10.02
to each Holder of such Notes and the Note Insurer. Any expenses associated with
the compliance of the provisions hereof in connection with a redemption of the
Notes shall be paid by the Note Insurer or the Servicer, depending upon which
party redeems the Notes. In no event shall the Note Insurer redeem the Notes
unless the proceeds received from the Note Insurer would be not less than the
greater of (x) the entire amount that would be payable to the Holders of the
Notes, in full payment thereof on the Payment Date next succeeding the date of
such Sale and (y) the fair market value of the Mortgage Loans as of the related
Payment Date. Upon the redemption of the Notes, Mortgage Loans in the Trust
Estate shall be released and delivered to the Issuer.
(b) Upon receipt of the notice from the Servicer or the Note Insurer
of its election to redeem the Notes pursuant to Section 10.01(a), the Indenture
Trustee shall prepare and deliver to the Issuer, the Servicer and the Note
Insurer, no later than the related Redemption Date, a Payment Date Statement
stating therein that it has determined that the conditions to redemption at the
option of the Servicer or Note Insurer have been satisfied and setting forth the
amount, if any, to be withdrawn from each Note Account and paid to the Servicer
as reimbursement for Nonrecoverable Advances and such other information as may
be required to accomplish such redemption.
Section 10.02. Form of Redemption Notice.
Notice of redemption shall be given by the Indenture Trustee in the
name of and at the expense of the Issuer by first class mail, postage prepaid,
mailed not less than ten days prior to the Redemption Date to each Holder of
Notes to be redeemed, such Holders being determined as of the Record Date for
such Payment Date, and to the Note Insurer.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price at which the Notes of such Series will
be redeemed,
(3) the fact of payment in full on such Notes, the place where
such Notes are to be surrendered for payment of the Redemption Price
(which shall be the office or agency of the Issuer to be maintained as
provided in Section 3.02), and that no interest shall accrue on such
Note for any period after the date fixed for redemption.
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Failure to give notice of redemption, or any defect therein, to any
Holder of any Note selected for redemption shall not impair or affect the
validity of the redemption of any other Note.
Section 10.03. Notes Payable on Optional Redemption.
Notice of redemption having been given as provided in Section 10.02,
the Notes to be redeemed shall, on the applicable Redemption Date, become due
and payable at the Redemption Price and (unless the Issuer shall default in the
payment of the Redemption Price) no interest shall accrue on such Redemption
Price for any period after such Redemption Date; provided, however, that if such
Redemption Price is not paid on the Redemption Date, the Note Balance shall,
until paid, bear interest from the Redemption Date at the Note Interest Rate.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions.
(a) Upon any application or request by the Issuer to the Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the Indenture Trustee and the Note Insurer an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion
of Counsel (with a copy to the Note Insurer), if requested by the Indenture
Trustee, stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
(b) Every certificate, opinion or letter with respect to compliance
with a condition or covenant provided for in this Indenture, including one
furnished pursuant to specific requirements of this Indenture relating to a
particular application or request (other than certificates provided pursuant to
TIA Section 314(a)(4)) shall include and shall be deemed to include (regardless
of whether specifically stated therein) the following:
(1) a statement that each individual signing such certificate,
opinion or letter has read such covenant or condition and the
definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate, opinion or letter are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
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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 the Issuer may be based, insofar as it
relates to legal matters, upon a certificate or opinion of, or representations
by, counsel, unless such officer knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based are erroneous. Any
Opinion of Counsel may be based on the written opinion of other counsel, in
which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel's opinion and shall include a statement to the effect that such counsel
believes that such counsel and the Indenture Trust may reasonably rely upon the
opinion of such other counsel.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Wherever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Section 6.01(b)(2).
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Indenture Trustee at the request or
direction of the Issuer, then, notwithstanding that the satisfaction of such
condition is a condition precedent to the Issuer's right to make such request or
direction, the Indenture Trustee shall be protected in acting in accordance with
such request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default as provided in Section 6.01(d).
Section 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 an agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered
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to the Indenture Trustee, and, where it is hereby expressly required, to the
Issuer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01) conclusive in
favor of the Indenture Trustee and the Issuer, if made in the manner provided in
this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not notation
of such action is made upon such Notes.
Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer
and Issuer.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with:
(1) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with and received by the Indenture
Trustee at its Corporate Trust Office and at _________________; or
(2) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder (except as provided in
Section 5.01(3) and (4)) if in writing and mailed, first-class postage
prepaid, to the Issuer addressed to it at Loan Trust 200 - ), in care
of _____________________, Attention: Corporate Trust Administration,
or at any other address previously furnished in writing to the
Indenture Trustee by the Issuer; or
(3) the Note Insurer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage prepaid, to _________________
addressed to it at __________________, Attention: Structured Finance
Group (_____________ Loan Trust 200 - , Mortgage Backed Notes, Series
200 - ), or at any other address previously furnished in writing to
the Indenture Trustee by the Note Insurer; or
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(4) the Depositor by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and
mailed, first-class, postage paid, to Wachovia Asset Securitization
Issuance, LLC, __________________, Charlotte, North Carolina 28202,
Attention: ________________, or at any other address previously
furnished in writing to the Indenture Trustee by the Depositor; or
(5) the Seller or the Servicer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage paid, to ______________,
Attention: General Counsel or at any other address previously
furnished in writing to the Indenture Trustee by the Seller or the
Servicer; or
(6) the Underwriters by any party or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed,
first-class, postage prepaid, to (a) _______________, Attn:
______________ and (b) Attn: _____________.
Notices required to be given to the Rating Agencies by the Issuer or
the Indenture Trustee shall be in writing, personally delivered or mailed
first-class postage pre-paid, to (i) in the case of [Rating Agency], at the
following address: _____________________, Attention: _______________________,
(ii) in the case of [Rating Agency], at the following address:
_______________________, Attention: _____________________; or as to each of the
foregoing, at such other address as shall be designed by written notice to the
other parties.
Section 11.05. Notices and Reports to Noteholders; Waiver of Notices.
Where this Indenture provides for notice to Noteholders of any event
or the mailing of any report to Noteholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to
whom such report is required to be mailed, at the address of such Noteholder as
it appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Noteholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Noteholder
shall affect the sufficiency of such notice or report with respect to other
Noteholders, and any notice or report that is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any
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manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Section 11.06. Rules by Indenture Trustee.
The Indenture Trustee may make reasonable rules for any meeting of
Noteholders.
Section 11.07. Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with another
provision hereof that is required to be included in this Indenture by any of the
provisions of the TIA, such required provision shall control.
Section 11.08. 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 11.09. Successors and Assigns.
All covenants and agreements in this Indenture by the Issuer shall
bind its successors and assigns, whether so expressed or not.
Section 11.10. Separability.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.11. Benefits of Indenture.
Nothing in this Indenture or in the Notes, expressed or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any separate trustee or Co-trustee appointed under Section 6.14, the
Note Insurer and the Noteholders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 11.12. Legal Holidays.
In any case where the date of any Payment Date, Redemption Date or any
other date on which principal of or interest on any Note is proposed to be paid
shall not be a Business Day, then (notwithstanding any other provision of the
Notes or this Indenture) payment need not be made on such date, but may be made
on the next succeeding Business Day with the same force and effect as if made on
the nominal date of any such Payment Date, Redemption Date or other date for the
payment of principal of or interest on any Note and no interest shall accrue for
the period from and after any such nominal date, provided such payment is made
in full on such next succeeding Business Day.
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Section 11.13. Governing Law.
IN VIEW OF THE FACT THAT NOTEHOLDERS ARE EXPECTED TO RESIDE IN MANY
STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY
THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAW OF A STATE HAVING A WELL-DEVELOPED BODY OF COMMERCIAL
AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS
INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED THEREIN.
Section 11.14. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 11.15. Recording of Indenture.
This Indenture is subject to recording in any appropriate public
recording offices, such recording to be effected by the Issuer and at its
expense in compliance with any Opinion of Counsel delivered pursuant to Section
2.11(c) or 3.06.
Section 11.16. Issuer Obligation.
No recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Indenture Trustee or the Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that the Indenture
Trustee and the Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity. For all purposes of this Indenture, in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of the
Trust Agreement.
Section 11.17. No Petition.
The Indenture Trustee, by entering into this Indenture, and each
Noteholder and Beneficial Owner, by accepting a Note, hereby covenant and agree
that they will not at any time institute against or the Issuer, or join in any
institution against or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other
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proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents. In addition, the Indenture Trustee will on behalf of the
holders of the Notes, (a) file a written objection to any motion or other
proceeding seeking the substantive consolidation of the Seller with, or the
Issuer, (b) file an appropriate memorandum of points and authorities or other
brief in support of such objection, or (c) endeavor to establish at the hearing
on such objection that the substantive consolidation of such entity would be
materially prejudicial to the Noteholders.
This Section 11.17 will survive for one year and one day following the
termination of this Indenture.
Section 11.18. Inspection.
The Issuer agrees that, on reasonable prior notice, it will permit any
representative of the Indenture Trustee and the Note Insurer, during the
Issuer's normal business hours, to examine all of books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent Accountants selected by the
Indenture Trustee or the Note Insurer, as the case may be, and to discuss its
affairs, finances and accounts with its officers, employees and Independent
Accountants (and by this provision the Issuer hereby authorizes its Accountants
to discuss with such representatives such affairs, finances and accounts), all
at such reasonable times and as often as may be reasonably requested. Any
expense incident to the exercise by the Indenture Trustee of any right under
this Section 11.18 shall be borne by the Issuer.
Section 11.19. Usury.
The amount of interest payable or paid on any Note under the terms of
this Indenture shall be limited to an amount that shall not exceed the maximum
nonusurious rate of interest allowed by the applicable laws of the United States
or the State of New York (whichever shall permit the higher rate), that could
lawfully be contracted for, charged or received (the "Highest Lawful Rate"). In
the event any payment of interest on any Note exceeds the Highest Lawful Rate,
the Issuer stipulates that such excess amount will be deemed to have been paid
as a result of an error on the part of both the Indenture Trustee, acting on
behalf of the Holder of such Note, and the Issuer, and the Holder receiving such
excess payment shall promptly, upon discovery of such error or upon notice
thereof from the Issuer or the Indenture Trustee, refund the amount of such
excess or, at the option of the Indenture Trustee, apply the excess to the
payment of principal of such Note, if any, remaining unpaid. In addition, all
sums paid or agreed to be paid to the Indenture Trustee for the benefit of
Holders of Notes for the use, forbearance or detention of money shall, to the
extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such Notes.
Section 11.20. Third Party Beneficiary.
The Note Insurer is intended as a third party beneficiary of this
Indenture shall be binding upon and inure to the benefit of the Note Insurer;
provided that, notwithstanding the foregoing, for so long as a Note Insurer
Default is continuing with respect to its obligations under the
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Insurance Policy, the Noteholders shall succeed to the Note Insurer's rights
hereunder. Without limiting the generality of the foregoing, all covenants and
agreements in this Indenture that expressly confer rights upon the Note Insurer
shall be for the benefit of and run directly to the Note Insurer, and the Note
Insurer shall be entitled to rely on and enforce such covenants to the same
extent as if it were a party to this Indenture.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee and the have
caused this Indenture to be duly executed by their respective officers thereunto
duly authorized, all as of the day and year first above written.
[ ] LOAN TRUST 200 -
By: [OWNER TRUSTEE],
not in its individual capacity,
but solely as Owner Trustee
By:
---------------------------------
Authorized Signatory
[INDENTURE TRUSTEE],
as Indenture Trustee
By:
---------------------------------
Name:
Title:
SCHEDULE I MORTGAGE LOAN SCHEDULE
EXHIBIT A FORM OF NOTE
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED
IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE INSURANCE POLICY AS
PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE
PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
Date of Indenture: As of Original Note Balance: $___________
First Payment Date: CUSIP No.: ___________
Denomination: $____________ Note No.: __
[ ] LOAN TRUST 200 - NOTES,
SERIES 200 - , CLASS
Loan Trust 200 - , a statutory trust organized and existing under the
laws of the State of Delaware (herein referred to as the "Issuer"), for value
received, hereby promises to pay to Cede & Co., or registered assigns, the
principal sum of $___________ payable on each Payment Date in an amount equal to
the result obtained by multiplying (i) a fraction the numerator of which is
$___________ and the denominator of which is $_____________ (this Note's
"Percentage Interest") by (ii) the aggregate amount, if any, payable from the
Note Account in respect of principal on the Notes pursuant to the Indenture
dated as of , between the Issuer and , a national banking association, as
Indenture Trustee (the "Indenture Trustee"); provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the earlier of
(i) the Payment Date occurring in December 2030 (the "Final Maturity Date"),
(ii) the Redemption Date, if any, pursuant to Article X of the Indenture or
(iii) the date on which an Event of Default shall have occurred and be
continuing, if the Notes have been declared to be immediately due and payable in
the manner provided in Section 5.02 of the Indenture. Capitalized terms used but
not defined herein are defined in Article I of the Indenture.
Pursuant to the terms of the Indenture, payments will be made on the
25th day of each month or, if such day is not a Business Day, on the Business
Day immediately following such 25th day (each a "Payment Date"), commencing on
the first Payment Date specified above, to the Person in whose name this Note is
registered at the close of business on the applicable Record Date, in an amount
equal to the product of (a) the Percentage Interest evidenced by this Note and
(b) the sum of the amounts to be paid on Notes with respect to such Payment
Date, all as more specifically set forth in the Indenture.
Notwithstanding the foregoing, in the case of Definitive Notes, upon
written request at least five days prior to the related Record Date with
appropriate instructions by the Holder of this Note (holding an aggregate
initial Note Balance of at least $1,000,000), any payment of principal or
interest, other than the final installment of principal or interest, shall be
made by wire transfer to an account in the United States designated by such
Holder reasonably satisfactory to the Indenture Trustee.
Payments of principal and interest on the Notes will be made on each
Payment Date to Noteholders of record as of the related Record Date. On each
Payment Date, Noteholders will be entitled to receive interest payments in an
aggregate amount equal to the related Note Interest for such Payment Date,
together with principal payments in an aggregate amount equal to the Monthly
Principal plus, until the Overcollateralization Amount is equal to the Required
Overcollateralization Amount, Excess Cash, if any, for such Payment Date. The
"Note Balance" of a Note as of any date of determination is equal to the initial
principal balance thereof as of the Closing Date, reduced by the aggregate of
all amounts previously paid with respect to such Note on account of principal.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Mortgage Backed Notes, Series 200 - , Class , issued under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Holders of the Notes. To
the extent that any provision of this Note contradicts or is inconsistent with
the provisions of the Indenture, the provisions of the Indenture shall control
and supersede such contradictory or inconsistent provision herein. The Notes are
subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the Mortgage
Loans and the other collateral related thereto pledged as security therefor as
provided in the Indenture.
As described above, the entire unpaid principal amount of this Note
shall be due and payable on the earlier of the Final Maturity Date and the
Redemption Date, if any, pursuant to Article X of the Indenture. Notwithstanding
the foregoing, the entire unpaid principal amount of the Notes shall be due and
payable on the date on which an Event of Default shall have occurred
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and be continuing if the Indenture Trustee, at the direction or upon the prior
written consent of Financial Security Assurance Inc. (the "Note Insurer") in the
absence of a Note Insurer Default, or the Holders of the Notes representing not
less than 50% of the Note Balance of the Outstanding Notes (with the prior
written consent of the Note Insurer in the absence of a Note Insurer Default),
shall have declared the Notes to be immediately due and payable in the manner
provided in Section 5.02 of the Indenture. All principal payments on the Notes
shall be made pro rata to the Noteholders entitled thereto.
The Note Insurer in consideration of the payment of the premium and
subject to the terms of the Note Guaranty Insurance Policy (the "Insurance
Policy") thereby has unconditionally and irrevocably guaranteed the payment of
the Insured Payments.
Pursuant to the Indenture, unless a Note Insurer Default exists (i)
the Note Insurer shall be deemed to be the holder of the Notes for certain
purposes specified in the Indenture and will be entitled to exercise all rights
of the Noteholders thereunder, including the rights of Noteholders relating to
the occurrence of, and the remedies with respect to, an Event of Default,
without the consent of such Noteholders, and (ii) the Indenture Trustee may take
actions which would otherwise be at its option or within its discretion,
including actions relating to the occurrence of, and the remedies with respect
to, an Event of Default, only at the direction of the Note Insurer. In addition,
on each Payment Date, after the Noteholders have been paid all amounts to which
they are entitled, the Note Insurer will be entitled to be reimbursed for any
unreimbursed draws under the Insurance Policy, paid Note Insurer Premium (each
with interest thereon at the "Late Payment Rate" specified in the Insurance
Agreement) and any other amounts owed under the Insurance Policy.
The Issuer shall not be liable upon the indebtedness evidenced by the
Notes except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate and payments under the Insurance Policy will be sole source of
payments on the Notes, and each Holder hereof, by its acceptance of this Note,
agrees that (i) such Note will be limited in right of payment to amounts
available from the Trust Estate and the Insurance Policy as provided in the
Indenture and (ii) such Holder shall have no recourse to the Issuer, the Owner
Trustee, the Indenture Trustee, the Depositor, the Seller, the Servicer or any
of their respective affiliates, or to the assets of any of the foregoing
entities, except the assets of the Issuer pledged to secure the Notes pursuant
to the Indenture.
Payments of interest on this Note due and payable on each Payment
Date, together with the installment of principal, if any, to the extent not in
full payment of this Note, shall be made by check mailed to the Person whose
name appears as the Holder of this Note (or one or more Predecessor Notes) on
the Note Register as of the close of business on each Record Date, except that
with respect to Notes registered on the Record Date in the name of the nominee
of the Clearing Agency (initially, such nominee to be Cede & Co.), payments will
be made by wire transfer in immediately available funds to the account
designated by such nominee. Such checks shall be mailed to the Person entitled
thereto at the address of such Person as it appears on the Note Register as of
the applicable Record Date without requiring that this Note be submitted for
notation of payment. Notwithstanding the foregoing, in the case of Definitive
Notes, upon written request at least five days prior to the related Record Date
with appropriate instructions by the Holder of this Note (holding an aggregate
initial Note Balance of at least $1,000,000), any
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payment of principal or interest, other than the final installment of principal
or interest, shall be made by wire transfer to an account in the United States
designated by such Holder reasonably satisfactory to the Indenture Trustee. Any
reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Payment Date shall be binding upon
all future Holders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not noted
hereon. If funds are expected to be available, as provided in the Indenture, for
payment in full of the then remaining unpaid principal amount of this Note on a
Payment Date, then the Indenture Trustee, in the name of and on behalf of the
Issuer, will notify the Person who was the Holder hereof as of the Record Date
preceding such Payment Date by notice mailed or transmitted by facsimile prior
to such Payment Date, and the amount then due and payable shall be payable only
upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes.
As provided in the Indenture, the Notes may be redeemed in whole, but
not in part, at the option of the Issuer, on any Payment Date on and after the
date on which the Note Balance is less than 10% of the Original Note Balance.
As provided in the Indenture and subject to certain limitations set
forth therein, the transfer of this Note may be registered on the Note Register
upon surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Holder hereof or such Holder's attorney
duly authorized in writing, with such signature guaranteed by an "eligible
guarantor institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in the Securities Transfer
Agent's Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended, and thereupon one or more new Notes of authorized denominations and in
the same aggregate principal amount will be issued to the designated transferee
or transferees. No service charge will be charged for any registration of
transfer or exchange of this Note, but the transferor may be required to pay a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with any such registration of transfer or exchange.
The Note Registrar shall not register the transfer of this Note unless
the Note Registrar has received a representation letter from the transferee to
the effect that either (i) the transferee is not, and is not acquiring the Note
on behalf of or with the assets of, an employee benefit plan or other retirement
plan or arrangement that is subject to Title I of the Employee Retirement Income
Security Act or 1974, as amended, or Section 4975 of the Code or (ii) the
acquisition and holding of this Note by the transferee qualifies for exemptive
relief under a Department of Labor Prohibited Transaction Class Exemption. Each
Beneficial Owner, by acceptance of a beneficial interest herein, shall be deemed
to make one of the foregoing representations.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in
the case of a Beneficial Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing
A-4
delivered in connection therewith, against (i) the Indenture Trustee or the
Owner Trustee in its individual capacity, (ii) any owner of a beneficial
interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director or employee of the Indenture Trustee or the Owner Trustee in its
individual capacity, any holder of a beneficial interest in the Issuer, the
Owner Trustee or the Indenture Trustee or of any successor or assign of the
Indenture Trustee or the Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Each Noteholder or Beneficial Owner, by acceptance of a Note or, in
the case of a Beneficial Owner, a beneficial interest in a Note, covenants and
agrees by accepting the benefits of the Indenture that such Noteholder or
Beneficial Owner will not at any time institute against the or the Issuer, or
join in any institution against the or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture, the Mortgage Loan Sale
Agreement, the Mortgage Loan Contribution Agreement, the Servicing Agreement,
the Management Agreement, the Insurance Agreement and the Indemnification
Agreement (the "Basic Documents").
The Issuer has entered into the Indenture and this Note is issued with
the intention that, for federal, state and local income, single business and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Trust Estate. Each Noteholder, by acceptance of a Note (and each
Beneficial Owner by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this
Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of the Note Insurer and the Holders of Notes
representing a majority of the Note Balance of all Outstanding Notes. The
Indenture also contains provisions permitting the (i) Note Insurer or (ii) if a
Note Insurer Default exists, the Holders of Notes representing specified
percentages of the Note Balance of Outstanding Notes, on behalf of the Holders
of all the Notes, to waive compliance by the Issuer with certain provisions of
the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Note Insurer or by the Holder of
this Note (or any one or more Predecessor Notes) shall be conclusive and binding
upon such Holder and upon all future Holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Note. The
Indenture also permits the amendment thereof, in certain limited
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circumstances, or the waiver of certain terms and conditions set forth in the
Indenture, without the consent of Holders of the Notes issued thereunder.
The term "Issuer" as used in this Note includes any successor to the
Issuer under the Indenture.
Initially, the Notes will be represented by one Note registered in the
name of CEDE & Co. as nominees of the Clearing Agency. The Notes will be
delivered as provided in the Indenture and subject to certain limitations
therein set forth. The Notes are exchangeable for a like aggregate initial Note
Balance of Notes of different authorized denominations, as requested by the
Holder surrendering the same.
THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency herein prescribed.
Unless the certificate of authentication hereon has been executed by
the Authenticating Agent whose name appears below by manual signature, this Note
shall not be entitled to any benefit under the Indenture referred to on the
reverse hereof, or be valid or obligatory for any purpose.
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IN WITNESS WHEREOF, the Issuer has caused this Instrument to be
signed, manually or in facsimile, by its Authorized Officer, as of the date set
forth below.
DATE: __________ __, ____
[ ] LOAN TRUST 200 -
By: [OWNER TRUSTEE], not in its
individual capacity but solely as
Owner Trustee under the Trust
Agreement
By:
----------------------------------
Authorized Signatory
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CERTIFICATE OF AUTHENTICATION
This is one of the Class A Notes designated above and referred to in the
within-mentioned Indenture.
Date: __________ __, ____
[AUTHENTICATING AGENT],
Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-8
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ___________________________________________, attorney, to transfer
said Note on the books kept for registration thereof, with full power of
substitution in the premises.
Dated: ____________________*/
Signature Guaranteed:
___________________________*/
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Note Registrar, which requirements include membership or
participation in STAMP or such other "signature guarantee program" as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B INSURANCE POLICY
EXHIBIT C FORM OF NOTICE OF CLAIM
EXHIBIT D PMI MORTGAGE LOANS