Document:

efc14-505_ex43.htm

Exhibit 4.3

 

	 

 

 

 

OWNER TRUST AGREEMENT

 

 

among

 

 

[_________________________________],

as Depositor,

 

 

[_________________________________],

as the Company,

 

 

[_________________________________],

as Owner Trustee

 

 

[_________________________________],

as Paying Agent

 

 

 

Dated as of ____________ 1, 20__

 

 

 

 

________________ HOME LOAN OWNER TRUST 20__-__

 

 

 

Home Loan Asset Backed Notes, Series 20___-__

 

 

 

	 

 

 

 

  

  

  

 

TABLE OF CONTENTS

 

 

	 	Page
	 	 
	
ARTICLE I DEFINITIONS

	
1

	 	 
	
Section 1.1

	
Capitalized Terms

	
1

	
Section 1.2

	
Other Definitional Provisions

	
4

	 	 	 
	
ARTICLE II ORGANIZATION

	
5

	 	 
	
Section 2.1

	
Name

	
5

	
Section 2.2

	
Office

	
5

	
Section 2.3

	
Purposes and Powers

	
5

	
Section 2.4

	
Appointment of Owner Trustee

	
6

	
Section 2.5

	
Initial Capital Contribution of Trust Estate

	
6

	
Section 2.6

	
Declaration of Trust

	
6

	
Section 2.7

	
Title to Trust Property

	
6

	
Section 2.8

	
Situs of Trust

	
7

	
Section 2.9

	
Representations and Warranties of The Depositor and The Company; Covenants of The Company

	
7

	 	 	 
	
ARTICLE III RESIDUAL INTEREST CERTIFICATES AND TRANSFER OF INTERESTS

	
9

	 	 
	
Section 3.1

	
Initial Ownership

	
9

	
Section 3.2

	
The Residual Interest Certificates

	
9

	
Section 3.3

	
Execution, Authentication and Delivery of Residual Interest Certificates

	
9

	
Section 3.4

	
Registration of Transfer and Exchange of Residual Interest Certificates

	
9

	
Section 3.5

	
Mutilated, Destroyed, Lost or Stolen Residual Interest Certificates

	
10

	
Section 3.6

	
Persons Deemed Owners

	
11

	
Section 3.7

	
Access to List of Owners’ Names and Addresses

	
11

	
Section 3.8

	
Maintenance of Office or Agency

	
11

	
Section 3.9

	
Appointment of Paying Agent

	
11

	
Section 3.10

	
Restrictions on Transfer of Residual Interest Certificates

	
12

	 	 	 
	
ARTICLE IV ACTIONS BY OWNER TRUSTEE

	
15

	 	 
	
Section 4.1

	
Prior Notice to Owners With Respect to Certain Matters; Covenants

	
15

	
Section 4.2

	
Action by Owners With Respect to Certain Matters

	
18

	
Section 4.3

	
Action by Owners With Respect to Bankruptcy

	
18

	
Section 4.4

	
Restrictions on Owners’ Power

	
18

	
Section 4.5

	
Majority Control

	
18

	 	 	 
	
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

	
19

	 	 
	
Section 5.1

	
Establishment of Trust Account

	
19

	
Section 5.2

	
Application of Trust Funds

	
19

	
Section 5.3

	
Method of Payment

	
20

 

 

 

 

 

  

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TABLE OF CONTENTS

(Continued)

 

 

	 	 	Page
	 	 	 
	
Section 5.4

	
Segregation of Moneys; No Interest

	
20

	
Section 5.5

	
Accounting and Reports to the Certificateholder, Owners, the Internal Revenue Service and Others

	
20

	 	 	 
	
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE

	
21

	 	 
	
Section 6.1

	
General Authority

	
21

	
Section 6.2

	
General Duties

	
21

	
Section 6.3

	
Action Upon Instruction

	
22

	
Section 6.4

	
No Duties Except as Specified in this Agreement, the Basic Documents or in Instructions

	
23

	
Section 6.5

	
No Action Except Under Specified Documents or Instructions

	
23

	
Section 6.6

	
Restrictions

	
23

	 	 	 
	
ARTICLE VII CONCERNING THE OWNER TRUSTEE

	
24

	 	 
	
Section 7.1

	
Acceptance of Trusts and Duties

	
24

	
Section 7.2

	
Furnishing of Documents

	
25

	
Section 7.3

	
Representations and Warranties

	
25

	
Section 7.4

	
Reliance; Advice of Counsel

	
26

	
Section 7.5

	
Not Acting in Individual Capacity

	
26

	
Section 7.6

	
Owner Trustee Not Liable for Residual Interest Certificates or Home Loans

	
27

	
Section 7.7

	
Owner Trustee May Own Residual Interest Certificates and Notes

	
27

	
Section 7.8

	
Licenses

	
27

	 	 	 
	
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE AND PAYING AGENT

	
27

	 	 
	
Section 8.1

	
Fees and Expenses

	
27

	
Section 8.2

	
Indemnification

	
28

	
Section 8.3

	
Payments to the Owner Trustee and Paying Agent

	
28

	 	 	 
	
ARTICLE IX TERMINATION OF OWNER TRUST AGREEMENT

	
28

	 	 
	
Section 9.1

	
Termination of Owner Trust Agreement

	
28

	 	 	 
	
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES

	
29

	 	 
	
Section 10.1

	
Eligibility Requirements for Owner Trustee

	
29

	
Section 10.2

	
Resignation or Removal of Owner Trustee

	
30

	
Section 10.3

	
Successor Owner Trustee

	
30

	
Section 10.4

	
Merger or Consolidation of Owner Trustee

	
31

	
Section 10.5

	
Appointment of Co-Owner Trustee or Separate Owner Trustee

	
31

 

 

 

 

  

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TABLE OF CONTENTS

(Continued)

 

 

	 	 	Page
	 	 	 
	
ARTICLE XI MISCELLANEOUS

	
33

	 	 
	
Section 11.1

	
Supplements and Amendments

	
33

	
Section 11.2

	
No Legal Title to Trust Estate in Owners

	
34

	
Section 11.3

	
Limitations on Rights of Others

	
34

	
Section 11.4

	
Notices

	
34

	
Section 11.5

	
Severability

	
34

	
Section 11.6

	
Separate Counterparts

	
35

	
Section 11.7

	
Successors and Assigns

	
35

	
Section 11.8

	
No Petition

	
35

	
Section 11.9

	
No Recourse

	
35

	
Section 11.10

	
Headings

	
35

	
Section 11.11

	
GOVERNING LAW

	
35

	
Section 11.12

	
Residual Interest Transfer Restrictions

	
35

	
Section 11.13

	
[Third-Party Beneficiary

	
35

 

EXHIBIT A                      Form of Residual Interest Certificate

EXHIBIT B                      Form of Certificate of Trust

 

 

 

 

 

 

  

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THIS OWNER TRUST AGREEMENT, dated as of ___________. 20__ (“Agreement”), among [______________________], a [__________________], as Depositor (the “Depositor”), _________________________, a ____________________ the “Company”), __________________, a ___________________, as Owner Trustee (the “Owner Trustee”) and ___________________________, a ______________________ (the “Paying Agent”).

 

W I T N E S S E T H:

 

In consideration of the mutual agreements and covenants herein contained, the Depositor, the Company, the Paying Agent and the Owner Trustee hereby agree for the benefit of each of them and the holders of the Residual Interest Certificates as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1   Capitalized Terms.  For all purposes of this Agreement, the following terms shall have the meanings set forth below:

 

“Administration Agreement” shall mean the Administration Agreement, dated as of _________________________, 20__, among the Issuing Entity, the Company, as the Company and the Master Servicer, and _____________________________, as Administrator, as the same may be amended from time to time.

 

“Administrator” shall mean ________________________, or any successor in interest thereto, in its capacity as Administrator under the Administration Agreement.

 

“Agreement” shall mean this Owner Trust Agreement, as the same may be amended and supplemented from time to time.

 

“Basic Documents” shall mean the Certificate of Owner Trust, this Agreement, the Indenture, the Sale and Servicing Agreement, the Administration Agreement, [the Insurance Agreement,] the Indemnification Agreement, the Custodial Agreement, the Note Depository Agreement, the Notes, the Home Loan Purchase Agreement, the Servicing Agreement and other documents and certificates delivered in connection herewith or therewith.

 

“Benefit Plan Investor” shall have the meaning assigned to such term in Section 3.10(B).

 

“Business Trust Statute” shall mean Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code ss.ss. 3801 Et Seq., as the same may be amended from time to time.

 

“Certificate Distribution Account” shall have the meaning assigned to such term in Section 5.1.

 

“Certificate of Trust” shall mean the Certificate of Trust in the form of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the Business Trust Statute.

 

 

 

  

  

  

 

“Certificate Register” and “Certificate Registrar” shall mean the register mentioned and the registrar appointed pursuant to Section 3.4.

 

“Certificateholder” or “Holder” shall mean a Person in whose name a Residual Interest Certificate is registered.

 

“Corporate Trust Office” shall mean, with respect to the Trust, the principal corporate trust office of the Trust located at _______________  Home Loan Owner Trust 20__-_ c/o _________________________________, Attention:  Corporate Trust Administration; or at such other address in the State of Delaware as the Owner Trustee may designate by notice to the Owners, the Securities Insurer and the Company, or the principal corporate trust office of any successor Owner Trustee (the address (which shall be in the State of Delaware) of which the successor owner trustee will notify the Owners, the Securities Insurer and the Company).

 

“Definitive Certificate” means a certificated form of security that represents a Residual Interest Certificate.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended.

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

 

“Expenses” shall have the meaning assigned to such term in Section 8.2.

 

“Indemnification Agreement” shall mean the Indemnification Agreement, dated as of _____________, 20__, among the Securities Insurer, the Company, the Issuing Entity, the Depositor, Barclays Capital, __________________________ and _____________________.

 

“Indenture” shall mean the Indenture, dated as of _____________, 20__, by and between the Issuing Entity and the Indenture Trustee, as the same may be amended or supplemented from time to time.

 

“Indenture Trustee” means ______________, as Indenture Trustee under the Indenture.

 

“Issuing Entity” shall mean _________________ Home Loan Owner Trust 20__-__, the Delaware business trust created pursuant to this Agreement.

 

“Majority Residual Interestholders” shall mean the Holders of more than an aggregate 50% Percentage Interest of the Residual Interest.

 

“Owner” shall mean each holder of a Residual Interest Certificate.

 

“Owner Trustee” shall mean ____________________,  a ______________, , not in its individual capacity but solely as owner trustee under this Agreement, and any successor owner trustee hereunder.

 

“Paying Agent” shall mean the Indenture Trustee or any successor in interest thereto or any other paying agent or co-paying agent appointed pursuant to Section 3.9 hereunder and 

 

 

 

  

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authorized by the Issuing Entity to make payments to and distributions from the Certificate Distribution Account.

 

“Percentage Interest” shall mean with respect to each Residual Interest Certificate, the percentage portion of all of the Residual Interest evidenced thereby as stated on the face of such Residual Interest Certificate.

 

“Prospective Owner” shall have the meaning set forth in Section 3.10(A).

 

“Rating Agency Condition” means, with respect to any action to which a Rating Agency Condition applies, that each Rating Agency shall have been given ___ days (or such shorter period as is acceptable to each Rating Agency) prior notice thereof and that each of the Depositor, the Servicer, the Master Servicer, [the Securities Insurer,] the Owner Trustee and the Issuing Entity shall have been notified by the Rating Agencies in writing that such action will not result in a reduction, withdrawal or qualification of the then current internal ratings assigned to the Notes by each of the Rating Agencies without respect to the Securities Insurer.

 

“Record Date” shall mean as to each Payment Date the last Business Day of the month immediately preceding the month in which such Payment Date occurs.

 

“Residual Interest” shall mean the right to receive distributions of Excess Spread, if any, and certain other funds, if any, on each Payment Date, pursuant to Section 5.2 of this Agreement, Sections 5.01(e) and 5.02(b) of the Sale and Servicing Agreement and Section 5.04(b) of the Indenture.

 

“Residual Interest Certificate” shall mean a certificate substantially in the form attached as Exhibit A hereto and evidencing the Residual Interest.

 

“Residual Interestholder” shall mean any Holder of a Percentage Interest of the Residual Interest.

 

“Sale and Servicing Agreement” shall mean the Sale and Master Servicing Agreement dated as of the date hereof, among the Owner Trust as Issuing Entity, [__________________], as Depositor, ____________________________, as Indenture Trustee and the Company, as Transferor and Master Servicer, as the same may be amended or supplemented from time to time.

 

“Secretary of State” shall mean the Secretary of State of the State of Delaware.

 

[“Securities Insurer” shall mean ______________________________.]

 

“Servicer” shall mean ______________________________, a _______________ corporation, or any successor in interest thereto.

 

“Servicing Agreement” shall mean the Servicing Agreement incorporating by reference the Agreement Regarding Standard Servicing Terms, each dated as of the date hereof, between the Company and the Servicer, as the same may be amended or supplemented from time to time.

 

 

 

 

  

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“Trust” shall mean the trust established by this Agreement.

 

“U.S. Person” shall mean a citizen or resident of the United States, a corporation or partnership (except as provided in applicable Treasury regulations) created or organized in or under the laws of the United States, any state or the District of Columbia, including any entity treated as a corporation or partnership for federal income tax purposes an estate that is subject to U.S. federal income tax regardless of the source of its income, or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more such U.S. Persons have authority to control all substantial decisions of the trust (or, to the extent provided in Treasury regulations, certain trusts in existence on August 20, 1996 which are eligible to be treated as U.S. Persons).

 

Section 1.2   Other Definitional Provisions.

 

(a)   Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in the Sale and Servicing Agreement or, if not defined therein, in the Indenture.

 

(b)   All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.

 

(c)   As used in this Agreement and in any certificate or other document made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles.  To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control.

 

(d)   The words “hereof”, “herein”, “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified; and the term “including” shall mean “including without limitation”.

 

(e)   The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms.

 

(f)   Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

 

 

 

  

4

  

ARTICLE II

 

ORGANIZATION

 

Section 2.1   Name.  The Trust created hereby shall be known as “________________  Home Loan Owner Trust 20___-__”, in which name the Owner Trustee may conduct the business of the Trust, make and execute contracts and other instruments on behalf of the Trust and sue and be sued.

 

Section 2.2   Office.  The office of the Trust shall be in care of the Owner Trustee at the Corporate Trust Office or at such other address in Delaware as the Owner Trustee may designate by written notice to the Owners, [the Securities Insurer] and the Company.

 

Section 2.3   Purposes and Powers.  The purpose of the Trust is to engage in the following activities:

 

(i)   to issue the Notes pursuant to the Indenture and to sell such Notes;

 

(ii)   with the proceeds of the sale of the Notes, to pay the organizational, start-up and transactional expenses of the Trust and to pay the balance to the Depositor and the Company, as their interests may appear pursuant to the Sale and Servicing Agreement;

 

(iii)   to purchase, hold, assign, grant, transfer, pledge, mortgage and convey the Trust Estate pursuant to the Indenture and to hold, manage and distribute to the Owners pursuant to the terms of the Sale and Servicing Agreement any portion of the Trust Estate released from the lien of, and remitted to the Trust pursuant to, the Indenture;

 

(iv)   to enter into and perform its obligations under the Basic Documents to which it is to be a party;

 

(v)   to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith;

 

(vi)   subject to compliance with the Basic Documents, to engage in such other activities as may be required in connection with conservation of the Trust Estate and the making of distributions to the Owners and the Noteholders; and

 

(vii)   to issue the Residual Interest Certificates pursuant to this Agreement.

 

The Trust is hereby authorized to engage in the foregoing activities.  The Trust shall not engage in any activity other than in connection with the foregoing or other than as required or authorized by the terms of this Agreement or the Basic Documents.

 

 

 

  

5

  

 

Section 2.4   Appointment of Owner Trustee.  The Depositor hereby appoints the Owner Trustee as trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties set forth herein.

 

Section 2.5   Initial Capital Contribution of Trust Estate.  The Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as of the date hereof, the sum of $1.  The Owner Trustee hereby acknowledges receipt in trust from the Depositor, as of the date hereof, of the foregoing contribution, which shall constitute the initial Trust Estate and shall be deposited in the Certificate Distribution Account.  The Depositor or the Company shall pay reasonable organizational expenses of the Trust as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.

 

Section 2.6   Declaration of Trust.  The Owner Trustee hereby declares that it will hold the Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the Owners, subject to the obligations of the Trust under the Basic Documents.  It is the intention of the parties hereto that the Trust constitute a business trust under the Business Trust Statute and that this Agreement constitute the governing instrument of such business trust.  It is the intention of the parties hereto that, solely for federal, state and local income and franchise tax purposes (i) so long as there is a sole Owner, the Trust shall be treated as a security arrangement, with the assets of the Trust being the Home Loans and the other assets held by the Trust, the owner of the Home Loans being the sole Owner and the Notes being non-recourse debt of the sole Owner, and (ii) if there is more than one Owner, the Trust shall be treated as a partnership, with the assets of the partnership being the Home Loans and other assets held by the Trust, the partners of the partnership being the holders of the Home Loans and the Notes being non-recourse debt of the partnership.  The Trust shall not elect to be treated as an association under Treasury Regulations Section 301.7701-3(a) for federal income tax purposes.  The parties agree that, unless otherwise required by appropriate tax authorities, the sole Owner or the Trust will file or cause to be filed annual or other necessary returns, reports and other forms consistent with the characterization of the Trust as provided in the second preceding sentence for such tax purposes.  Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and in the Business Trust Statute with respect to accomplishing the purposes of the Trust.

 

Section 2.7   Title to Trust Property.

 

(a)   Subject to the Indenture, legal title to all the Trust Estate shall be vested at all times in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Trust Estate to be vested in a trustee or trustees, in which case title shall be deemed to be vested in the Owner Trustee and/or a separate trustee, as the case may be.

 

(b)   The Owners shall not have legal title to any part of the Trust Estate.  No transfer by operation of law or otherwise of any interest of the Owners shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of any part of the Trust Estate.

 

 

 

  

6

  

 

Section 2.8   Situs of Trust.  The Trust will be located and administered in the State of Delaware.  All bank accounts maintained by the Owner Trustee on behalf of the Trust shall be located in the State of Delaware [or the State of New York,] except with respect to accounts maintained by the Indenture Trustee on behalf of the Owner Trustee.  The Trust shall not have any employees; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee from having employees within or without the State of Delaware.  Payments will be received by the Trust only in Delaware [or New York,] and payments will be made by the Trust only from Delaware [or New York,] except with respect to payments made by the Indenture Trustee on behalf of the Owner Trustee.  The only offices of the Trust will be at the Corporate Trust Office in Delaware.

 

Section 2.9   Representations and Warranties of The Depositor and The Company; Covenants of The Company.

 

(a)   The Depositor hereby represents and warrants to the Owner Trustee [and the Securities Insurer] that:

 

(i)   The Depositor is a [_______________] duly organized, validly existing, and in good standing under the laws of the State of [________________] and has all licenses necessary to carry on its business as now being conducted.  The Depositor has the power and authority to execute and deliver this Agreement and to perform in accordance herewith; the execution, delivery and performance of this Agreement (including all instruments of transfer to be delivered pursuant to this Agreement) by the Depositor and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action of the Depositor; this Agreement evidences the valid, binding and enforceable obligation of the Depositor; and all requisite action has been taken by the Depositor to make this Agreement valid, binding and enforceable upon the Depositor in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization, moratorium and other, similar laws relating to or affecting creditors’ rights generally or the application of equitable principles in any proceeding, whether at law or in equity;

 

(ii)   The consummation of the transactions contemplated by this Agreement will not result in (i) the breach of any terms or provisions of the certificate of formation or the limited liability company agreement of the Depositor, (ii) the breach of any term or provision of, or conflict with or constitute a default under or result in the acceleration of any obligation under, any material agreement, indenture or loan or credit agreement or other material instrument to which the Depositor, or its property is subject, or (iii) the violation of any law, rule, regulation, order, judgment or decree to which the Depositor or its respective property is subject;

 

(iii)   The Depositor is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental agency, which default might have consequences that would materially and adversely affect the condition (financial or otherwise) or operations of the Depositor or its properties or might have consequences that would materially and adversely affect its performance hereunder.

 

 

 

  

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(b)   The Company hereby represents and warrants to the Owner Trustee and the Securities Insurer that:

 

(i)   The Company is duly organized and validly existing as a [_______] company in good standing under the laws of the State of [__________], with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted.

 

(ii)   The Company is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals, in all jurisdictions in which the ownership or lease of property or the conduct of its business shall require such qualifications.

 

(iii)   The Company has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement has been duly authorized by the Company by all necessary corporate action.

 

(iv)   The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the certificate of incorporation or by-laws of the Company, or any indenture, agreement or other instrument to which the Company is a party or by which it is bound; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or, to the best of the Company’s knowledge, any order, rule or regulation applicable to the Company of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Company or its properties.

 

(v)   There are no proceedings or investigations pending or, to the Company’s best knowledge, threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Company or its properties:  (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Company of its obligations under, or the validity or enforceability of, this Agreement.

 

(vi)   The Company is not (A) an “employee benefit plan” within the meaning of Section 3(3) of ERISA, or (B) a “plan” within the meaning of Section 4975(e)(1) of the Code or (C) an entity, including an insurance company separate account or general account, whose underlying assets include plan assets by reason of a plan’s investment in the entity (each, a “Benefit Plan Investor”) and is not directly or indirectly purchasing such Residual Interest Certificate on behalf of, as investment manager of, as named fiduciary of, as trustee of, or with the assets of a Benefit Plan Investor.

 

 

 

  

8

  

 

(vii)   The Company is a U.S. Person.

 

(c)   The Company covenants with the Owner Trustee that during the continuance of this Agreement it will comply in all respects with the provisions of its Certificate of Incorporation in effect from time to time.

 

ARTICLE III

 

RESIDUAL INTEREST CERTIFICATES AND TRANSFER OF INTERESTS

 

Section 3.1   Initial Ownership.  Upon the formation of the Trust by the contribution by the Depositor pursuant to Section 2.5 and until the issuance of the Residual Interest Certificates, the Depositor shall be the sole Owner of the Trust.

 

Section 3.2   The Residual Interest Certificates.  The Residual Interest Certificates shall not be issued with a principal amount.  The Residual Interest Certificates shall be executed on behalf of the Trust by manual or facsimile signature of a Trust Officer of the Owner Trustee.  Residual Interest Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on behalf of the Trust, shall be valid and binding obligations of the Trust, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of such Residual Interest Certificates or did not hold such offices at the date of authentication and delivery of such Residual Interest Certificates.

 

A transferee of a Residual Interest Certificate shall become an Owner, and shall be entitled to the rights and subject to the obligations of an Owner hereunder and under the Sale and Servicing Agreement, upon such transferee’s acceptance of a Residual Interest Certificate duly registered in such transferee’s name pursuant to Section 3.4.

 

Section 3.3   Execution, Authentication and Delivery of Residual Interest Certificates.  Concurrently with the initial sale of the Home Loans to the Trust pursuant to the Sale and Servicing Agreement, the Owner Trustee on behalf of the Trust shall cause the Residual Interest Certificates representing 100% of the Percentage Interests of the Residual Interest to be executed, authenticated and delivered to or upon the written order of the Depositor, signed by its chairman of the board, its president or any vice president, without further corporate action by the Depositor, in authorized denominations.  No Residual Interest Certificate shall entitle its holder to any benefit under this Agreement, or shall be valid for any purpose, unless there shall appear on such Residual Interest Certificate a certificate of authentication substantially in the form set forth in Exhibit A, executed by the Owner Trustee or the Administrator, as the Owner Trustee’s authenticating agent, by manual or facsimile signature; such authentication shall constitute conclusive evidence that such Residual Interest Certificate shall have been duly authenticated and delivered hereunder.  All Residual Interest Certificates shall be dated the date of their authentication.  No Certificates, except the Residual Interest Certificates, shall be issued by the Trust without the prior written consent of the Securities Insurer.

 

Section 3.4   Registration of Transfer and Exchange of Residual Interest Certificates.  The Certificate Registrar shall keep or cause to be kept, at the office or agency maintained 

 

 

 

  

9

  

 

pursuant to Section 3.8 a Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Owner Trustee shall provide for the registration of Residual Interest Certificates and of transfers and exchanges of Residual Interest Certificates as herein provided.  The Administrator shall be the initial Certificate Registrar.

 

Upon surrender for registration of transfer of any Residual Interest Certificate at the office or agency maintained pursuant to Section 3.8, the Owner Trustee shall execute, authenticate and deliver (or shall cause the Administrator as its authenticating agent to authenticate and deliver), in the name of the designated transferee or transferees, one or more new Residual Interest Certificates in authorized denominations of a like aggregate amount dated the date of authentication by the Owner Trustee or any authenticating agent, provided that prior to such execution, authentication and delivery, the Owner Trustee, the Administrator, the Securities Insurer and the Certificate Registrar shall have received an Opinion of Counsel to the effect that the proposed transfer will not cause the Trust to be characterized as an association (or a publicly traded partnership) taxable as a corporation or alter the tax characterization of the Notes for federal income tax or California state law purposes.  At the option of an Owner, Residual Interest Certificates may be exchanged for other Residual Interest Certificates of authorized denominations of a like aggregate amount upon surrender of the Residual Interest Certificates to be exchanged at the office or agency maintained pursuant to Section 3.8.

 

Every Residual Interest Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Owner or his attorney duly authorized in writing.  In addition, each Residual Interest Certificate presented or surrendered for registration of transfer and exchange must be accompanied by a letter from the Prospective Owner certifying as to the representations set forth in Sections 3.10(a) and (b).  Each Residual Interest Certificate surrendered for registration of transfer or exchange shall be in substantially the form attached hereto as Exhibit A and shall be canceled and disposed of by the Owner Trustee or the Certificate Registrar in accordance with its customary practice.

 

No service charge shall be made for any registration of transfer or exchange of Residual Interest Certificates, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Residual Interest Certificates.

 

The preceding provisions of this Section notwithstanding, the Owner Trustee shall not make and the Certificate Registrar shall not register transfers or exchanges of Residual Interest Certificates for a period of 15 days preceding the due date for any payment with respect to the Residual Interest Certificates.

 

Section 3.5   Mutilated, Destroyed, Lost or Stolen Residual Interest Certificates.  If (a) any mutilated Residual Interest Certificate shall be surrendered to the Certificate Registrar, or if the Certificate Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Residual Interest Certificate and (b) there shall be delivered to the Certificate Registrar and the Owner Trustee such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Residual Interest Certificate shall have been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust shall 

 

 

 

  

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execute and the Owner Trustee, or the Administrator as the Owner Trustee’s authenticating agent, shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Residual Interest Certificate, a new Residual Interest Certificate of like tenor and denomination.  In connection with the issuance of any new Residual Interest Certificate under this Section, the Owner Trustee or the Certificate Registrar may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.  Any duplicate Residual Interest Certificate issued pursuant to this Section shall constitute conclusive evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Residual Interest Certificate shall be found at any time.

 

Section 3.6   Persons Deemed Owners.  Prior to due presentation of a Residual Interest Certificate for registration of transfer, the Owner Trustee or the Certificate Registrar may treat the Person in whose name any Residual Interest Certificate shall be registered in the Certificate Register as the owner of such Residual Interest Certificate for the purpose of receiving distributions pursuant to Section 5.2 and for all other purposes whatsoever, and neither the Owner Trustee nor the Certificate Registrar shall be bound by any notice to the contrary.

 

Section 3.7   Access to List of Owners’ Names and Addresses.  The Owner Trustee shall furnish or cause to be furnished to the Master Servicer, the Servicer, the Depositor, [the Securities Insurer] and the Indenture Trustee, within ___ days after receipt by the Owner Trustee of a request therefor from the Master Servicer, the Servicer, the Depositor, [the Securities Insurer] or the Indenture Trustee in writing, a list, in such form as the Master Servicer, the Servicer, the Depositor, [the Securities Insurer] or the Indenture Trustee may reasonably require, of the names and addresses of the Owners as of the most recent Record Date.  If a Certificateholder applies in writing to the Owner Trustee, and such application states that the applicant desire to communicate with other Certificateholders with respect to their rights under this Agreement or under the Residual Interest Certificates and such application is accompanied by a copy of the communication that such applicants propose to transmit, then the Owner Trustee shall, within _________ Business Days after the receipt of such application, afford such applicants access during normal business hours to the current list of Certificateholders.  Each Owner, by receiving and holding a Residual Interest Certificate, shall be deemed to have agreed not to hold any of the Depositor, the Company, the Certificate Registrar, [the Securities Insurer] or the Owner Trustee accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived.

 

Section 3.8   Maintenance of Office or Agency.  The Owner Trustee shall maintain an office or offices or agency or agencies where Residual Interest Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Owner Trustee in respect of the Residual Interest Certificates and the Basic Documents may be served.  The Owner Trustee initially designates the Administrator’s office in the city of as its principal corporate trust office for such purposes.  The Owner Trustee shall give prompt written notice to the Company, [the Securities Insurer] and to the Certificateholders of any change in the location of the Certificate Register or any such office or agency.

 

Section 3.9   Appointment of Paying Agent.  The Owner Trustee hereby appoints the Indenture Trustee as Paying Agent under this Agreement.  The Owner Trustee hereby appoints the Paying Agent to establish and maintain the Certificate Distribution Account.  The Paying 

 

 

 

  

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Agent shall make distributions to Residual Interestholders from the Certificate Distribution Account pursuant to Section 5.2 hereof and Section 5.02 of the Sale and Servicing Agreement and shall report the amounts of such distributions to the Owner Trustee.  The Paying Agent shall have the revocable power to withdraw funds from the Certificate Distribution Account for the purpose of making the distributions referred to above.  In the event that the Indenture Trustee shall no longer be the Paying Agent hereunder, the Owner Trustee shall appoint a successor to act as Paying Agent (which shall be a bank or trust company) acceptable to the Securities Insurer.  The Owner Trustee shall cause such successor Paying Agent or any additional Paying Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Owner Trustee that as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Owners in trust for the benefit of the Residual Interestholders entitled thereto until such sums shall be paid to such Owners.  The Paying Agent shall return all unclaimed funds to the Owner Trustee, and upon removal of a Paying Agent, such Paying Agent shall also return all funds in its possession to the Owner Trustee.  The provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the Indenture Trustee also in its role as Paying Agent, for so long as the Indenture Trustee shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder.  Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.  Notwithstanding anything herein to the contrary, the Paying Agent shall be the same entity as the Indenture Trustee under the Indenture and the Sale and Servicing Agreement, [unless the Securities Insurer consents to a different Paying Agent or a Securities Insurer Default has occurred and is continuing.] [Notwithstanding any other provision, if a Securities Insurer Default occurs, then the Securities Insurer’s consent or direction is not required.] If the Paying Agent ceases to be the same entity as the Indenture Trustee under the Indenture and the Sale and Servicing Agreement, then, unless the Securities Insurer otherwise consents, the Paying Agent shall resign and the Owner Trustee shall assume the duties and obligations of the Paying Agent hereunder and under the Sale and Servicing Agreement.

 

Section 3.10   Restrictions on Transfer of Residual Interest Certificates.

 

(a)   Each prospective purchaser and any subsequent transferee of a Residual Interest Certificate (each, a “Prospective Owner”), other than the Company, shall represent and warrant, in writing, to the Owner Trustee, [the Securities Insurer] and the Certificate Registrar and any of their respective successors that:

 

(i)   Such Person is (A) a “qualified institutional buyer” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and is aware that the seller of the Residual Interest Certificate may be relying on the exemption from the registration requirements of the Securities Act provided by Rule 144A and is acquiring such Residual Interest Certificate for its own account or for the account of one or more qualified institutional buyers for whom it is authorized to act, or (B) an institutional “accredited investor” within the meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act (an “Institutional Accredited Investor”) that is acquiring the Residual Interest Certificate for its own account, or for the account of such an Institutional Accredited Investor, for investment purposes and not with a view to, or for offer or sale in connection with any distribution in violation of the Securities Act.

 

 

 

  

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(ii)   Such Person understands that the Residual Interest Certificate have not been and will not be registered under the Securities Act and may be offered, sold or otherwise transferred only to a person whom the seller reasonably believes is (A) a qualified institutional buyer or (B) an Institutional Accredited Investor, and in accordance with the terms hereof and any applicable securities laws of any state of the United States.

 

(iii)   Such Person understands that the Residual Interest Certificates bear a legend to the following effect:

 

“THE RESIDUAL INTEREST IN THE TRUST REPRESENTED BY THIS RESIDUAL INTEREST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS.  THIS RESIDUAL INTEREST CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER HEREOF ONLY TO (I) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE ACT (INCLUDING, BUT NOT LIMITED TO,__________________) IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS.  NO PERSON IS OBLIGATED TO REGISTER THIS RESIDUAL INTEREST CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS.”

 

(iv)   Such Person shall comply with the provisions of Section 3.10(B), as applicable, relating to the ERISA restrictions with respect to the acceptance or acquisition of such Residual Interest Certificate.

 

(b)   Each Prospective Owner shall either:

 

(i)   represent and warrant, in writing, to the Owner Trustee, [the Securities Insurer] and the Certificate Registrar and any of their respective successors that the Prospective Owner is not (A) an “employee benefit plan” within the meaning of Section 3(3) of ERISA, or (B) a “plan” within the meaning of Section 4975(e)(1) of the Code or (C) an entity, including an insurance company separate account or general account, whose underlying assets include plan assets by reason of a plan’s investment in the entity (each, a “Benefit Plan Investor”) and is not directly or indirectly purchasing 

 

 

 

  

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such Residual Interest Certificate on behalf of, as investment manager of, as named fiduciary of, as trustee of, or with the assets of a Benefit Plan Investor; or

 

(ii)   furnish to the Owner Trustee, [the Securities Insurer] and the Certificate Registrar and any of their respective successors an opinion of counsel acceptable to such persons that (A) the proposed transfer of the Residual Interest Certificate to such Prospective Owner will not cause any assets of the Trust to be deemed “plan assets” within the meaning of United States Department of Labor Regulation Section 2510.3-101, or (B) the proposed transfer of the Residual Interest Certificate will not give rise to a transaction described in Section 406 of ERISA or Section 4975(c)(1) of the Code for which a statutory or administrative exemption is unavailable.

 

(c)   The Residual Interest Certificates shall bear an additional legend referring to the foregoing restrictions contained in paragraph (b) above.

 

(d)   Each Prospective Owner, other than the Company, shall represent and warrant, in writing, to the Owner Trustee, [the Securities Insurer] and the Certificate Registrar and any of their respective successors that it is a person who is either (A)(i) a citizen or resident of the United States, (ii) a corporation or partnership organized in or under the laws of the United States, any state or the District of Columbia, including any entity treated as a corporation or partnership for federal income tax purposes or (iii) a person not described in (A)(i) or (ii) whose ownership of the Residual Interest Certificate is effectively connected with such person’s conduct of a trade or business within the United States (within the meaning of the Code) and its ownership of any interest in a Residual Interest Certificate will not result in any withholding obligation with respect to any payments with respect to the Residual Interest Certificates by any person (other than withholding, if any, under Section 1446 of the Code) or (B) an estate the income of which is subject to United States federal income tax, regardless of source, or a trust if a court within the United States is able to exercise primary supervision over the administration of such trust and one or more persons described in this paragraph have the authority to control all substantial decisions of such trust (a person described in (A)(i), (A)(ii), or B, a “U.S. Person”).  It agrees that it will provide a certification of non-foreign status signed under penalties of perjury and, alternatively, that if it is a person described in clause (A)(iii) above, it will furnish to the Administrator a properly executed IRS Form W-8ECI (or successor form thereto) and a new IRS Form W-8ECI (or successor form thereto) upon the expiration or obsolescence of any previously delivered form (and such other certifications, representations or opinions of counsel as may be requested by the Company).

 

(e)   Each Certificateholder that is not a U.S. Person agrees that, subsequent to delivery to the Owner Trustee, [the Securities Insurer] and the Certificate Registrar of IRS Form W-8ECI or appropriate successor forms required to evidence that the Certificateholder holds its Residual Interest Certificate(s) in connection with a U.S. trade or business (within the meaning of the Code), it will deliver to the Company and the Owner Trustee further copies of the said IRS Form W-8ECI or such appropriate successor forms or other manner of certification, as the case may be, on or before the date that any such form expires or becomes obsolete or after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Company and the Owner Trustee, and such extensions or renewals thereof as may reasonably be requested by the Company and the Owner Trustee.  Further, each Certificateholder that is not 

 

 

 

  

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a U.S. Person covenants as a condition to acquiring its Residual Interest Certificate that for so long as it shall hold such Residual Interest Certificate it shall be held in such manner that the income therefrom shall be effectively connected with the conduct of a U.S. trade or business.  In the event that any Certificateholder shall breach the certifications, representations, warranties or covenants set forth in this Article III, such Certificateholder shall indemnify the Company, the Owner Trustee and the Trust for any amounts (including interest and penalties thereon) payable by the Company, the Owner Trustee or the Trust as a result of such breach.

 

ARTICLE IV

 

ACTIONS BY OWNER TRUSTEE

 

Section 4.1   Prior Notice to Owners With Respect to Certain Matters; Covenants.

 

(a)   With respect to the following matters, the Owner Trustee shall not take action, and the Owners shall not direct the Owner Trustee to take any action, unless at least 30 days before the taking of such action, the Owner Trustee shall have notified the Owners [and the Securities Insurer] in writing of the proposed action and [(i) the Securities Insurer shall have consented thereto and] (ii) the Owners shall not have notified the Owner Trustee in writing prior to the 30th day after such notice is given that such Owners have withheld consent or the Owners have provided alternative direction (any direction by the Owners shall require the prior consent of the Securities Insurer):

 

(i)   the initiation of any claim or lawsuit by the Trust (except claims or lawsuits brought in connection with the collection of the Home Loans) and the compromise of any action, claim or lawsuit brought by or against the Trust (except with respect to the aforementioned claims or lawsuits for collection of the Home Loans);

 

(ii)   the election by the Trust to file an amendment to the Certificate of Trust (unless such amendment is required to be filed under the Business Trust Statute);

 

(iii)   the amendment or other change to this Agreement or any Basic Document in circumstances where the consent of any Noteholder or the Securities Insurer is required;

 

(iv)   the appointment pursuant to the Indenture of a successor Note Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement of a successor Certificate Registrar, or the consent to the assignment by the Note Registrar, Paying Agent or Indenture Trustee or Certificate Registrar of its obligations under the Indenture or this Agreement, as applicable;

 

(v)   the consent to the calling or waiver of any default of any Basic Document;

 

(vi)   the consent to the assignment by the Indenture Trustee, the Master Servicer or Servicer of their respective obligations under any Basic Document;

 

 

 

  

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(vii)   except as provided in Article IX hereof, dissolve, terminate or liquidate the Trust in whole or in part; (viii) merge or consolidate the Trust with or into any other entity, or convey or transfer all or substantially all of the Trust’s assets to any other entity;

 

(viii)   cause the Trust to incur, assume or guaranty any indebtedness other than as set forth in this Agreement;

 

(ix)   do any act that conflicts with any other Basic Document;

 

(x)   do any act which would make it impossible to carry on the ordinary business of the Trust;

 

(xi)   confess a judgment against the Trust;

 

(xii)   possess Trust assets, or assign the Trust’s right to property, for other than a Trust purpose;

 

(xiii)   cause the Trust to lend any funds to any entity; or

 

(xiv)   change the Trust’s purpose and powers from those set forth in this Owner Trust Agreement.

 

(b)   Notwithstanding any provision of Section 4.1(a), the Owner Trustee on behalf of the Trust agrees to abide by the following restrictions:

 

(i)   Other than as contemplated by the Basic Documents and related documentation, the Trust shall not incur any indebtedness.

 

(ii)   Other than as contemplated by the Basic Documents and related documentation, the Trust shall not engage in any dissolution, liquidation, consolidation, merger or sale of assets.

 

(iii)   The Trust shall not engage in any business activity in which it is not currently engaged other as contemplated by the Basic Documents and related documentation.

 

(iv)   The Trust shall not form, or cause to be formed, any subsidiaries and shall not own or acquire any asset other than as contemplated by the Basic Documents and related documentation.

 

(v)   Other than as contemplated by the Basic Documents and related documentation, the Trust shall not follow the directions or instructions of the Company.

 

(c)   The Owner Trustee on behalf of the Trust shall:

 

(i)   Maintain the Trust’s books and records separate from any other person or entity.

 

 

 

  

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(ii)   Maintain the Trust’s bank accounts separate from any other person or entity.

 

(iii)   Not commingle the Trust’s assets with those of any other person or entity.

 

(iv)   Conduct the Trust’s own business in its own name.

 

(v)   Other than as contemplated by the Basic Documents and related documentation, pay the Trust’s own liabilities and expenses only out of its own funds.

 

(vi)   Observe all formalities required under the Business Trust Statute.

 

(vii)   Enter into transactions with Affiliates or the Company only if each such transaction is intrinsically fair, commercially reasonable, and on the same terms as would be available in an arm’s length transaction with a person or entity that is not an Affiliate.

 

(viii)   Not guarantee or become obligated for the debts of any other entity or person.

 

(ix)   Not hold out the Trust’s credit as being available to satisfy the obligation of any other person or entity.

 

(x)   Not acquire the obligations or securities of the Trust’s Affiliates or the Company.

 

(xi)   Other than as contemplated by the Basic Documents and related documentation, not make loans to any other person or entity or buy or hold evidence of indebtedness issued by any other person or entity.

 

(xii)   Other than as contemplated by the Basic Documents and related documentation, not pledge the Trust’s assets for the benefit of any other person or entity.

 

(xiii)   Hold the Trust out as a separate entity and conduct any business only in its own name.

 

(xiv)   Correct any known misunderstanding regarding the Trust’s separate identity.

 

(xv)   Not identify the Trust as a division of any other person or entity.

 

(xvi)   Maintain appropriate minutes or other records of appropriate actions and shall maintain its office separate from the office of the Company, the Depositor and the Master Servicer.

 

So long as the Notes or any other amounts owed under the Indenture remain outstanding, the Trust shall not amend this Section 4.1 without the prior written consent of 100% of the 

 

 

 

  

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Voting Interests of the Notes and the consent of each Rating Agency, in addition to the requirements under Section 11.1.

 

(d)   The Owner Trustee shall not have the power, except upon the direction of the Owners [with the consent of the Securities Insurer or upon the direction of the Securities Insurer,] and, subject to Section 11.18 of the Indenture, 100% of the Noteholders, and to the extent otherwise consistent with the Basic Documents, to (i) remove or replace the Servicer, the Master Servicer or the Indenture Trustee, (ii) institute proceedings to have the Trust declared or adjudicated a bankrupt or insolvent, (iii) consent to the institution of bankruptcy or insolvency proceedings against the Trust, (iv) file a petition or consent to a petition seeking reorganization or relief on behalf of the Trust under any applicable federal or state law relating to bankruptcy, (v) consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or any similar official) of the Trust or a substantial portion of the property of the Trust, (vi) make any assignment for the benefit of the Trust’s creditors, (vii) cause the Trust to admit in writing its inability to pay its debts generally as they become due or (viii) take any action, or cause the Trust to take any action, in furtherance of any of the foregoing (any of the above, a “Bankruptcy Action”).  So long as the Indenture and the Insurance Agreement remain in effect [and no Securities Insurer Default exists,] no Certificateholder shall have the power to take, and shall not take, any Bankruptcy Action with respect to the Trust or direct the Owner Trustee to take any Bankruptcy Action with respect to the Trust.

 

Section 4.2   Action by Owners With Respect to Certain Matters.  The Owner Trustee shall not have the power, except upon the direction of the Owners [and with the consent of the Securities Insurer or upon the direction of the Securities Insurer,] to (a) remove the Administrator under the Administration Agreement pursuant to Section 9 thereof, (b) appoint a successor Administrator pursuant to Section 9 of the Administration Agreement, (c) remove the Master Servicer under the Sale and Servicing Agreement pursuant to Section 10.01 thereof or (d) sell the Home Loans after the termination of the Indenture.  The Owner Trustee shall take the actions referred to in the preceding sentence only upon written instructions signed by the Owners [and, so long as no Securities Insurer Default exists, only after obtaining the consent of the Securities Insurer.]

 

Section 4.3   Action by Owners With Respect to Bankruptcy.  The Owner Trustee shall not have the power to commence a voluntary Bankruptcy Action relating to the Trust unless the conditions specified in Section 4.1(d) are satisfied and the Trust is insolvent.

 

Section 4.4   Restrictions on Owners’ Power.  The Owners shall not direct the Owner Trustee to take or refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Agreement or any of the Basic Documents or would be contrary to Section 2.3 nor shall the Owner Trustee be obligated to follow any such direction, if given.

 

Section 4.5   Majority Control.  Except as expressly provided herein, any action that may be taken by the Owners under this Agreement may be taken by the Majority Residual Interestholders.  Except as expressly provided herein, any written notice of the Owners delivered pursuant to this Agreement shall be effective if signed by the Majority Residual Interestholders at the time of the delivery of such notice.

 

 

 

  

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ARTICLE V

 

APPLICATION OF TRUST FUNDS; CERTAIN DUTIES

 

Section 5.1   Establishment of Trust Account.  The Owner Trustee shall cause the Master Servicer, for the benefit of the Owners, the Noteholders [and the Securities Insurer,] to establish and maintain with the Indenture Trustee for the benefit of the Owner Trustee one or more Eligible Accounts which, so long as the Indenture Trustee holds such Trust Account on behalf of the Owner Trustee, shall be entitled “Certificate Distribution Account, __________ __________________________, as Indenture Trustee on behalf of the Owner Trustee, the Owners, the Noteholders [and the Securities Insurer,] in trust for the Home Loan Owner Trust 20__-__”.  Funds shall be deposited in the Certificate Distribution Account as required by the Sale and Servicing Agreement.

 

All of the right, title and interest of the Owner Trustee and the Paying Agent in all funds on deposit from time to time in the Certificate Distribution Account and in all proceeds thereof shall be held for the benefit of the Owners and such other persons entitled to distributions therefrom.  Except as otherwise expressly provided herein or in the Sale and Servicing Agreement, the Certificate Distribution Account shall be under the sole dominion and control of the Owner Trustee or Paying Agent for the benefit of the Owners, the Securities Insurer and the Noteholders.

 

In addition to the foregoing, the Certificate Distribution Account is a Trust Account under the Sale and Servicing Agreement and constitutes part of the Trust Estate pledged by the Trust to the Indenture Trustee under the Indenture.  The Certificate Distribution Account shall be subject to and established and maintained in accordance with the applicable provisions of the Sale and Servicing Agreement and the Indenture, including, without limitation, the provisions of Section 5.02(b) of the Sale and Servicing Agreement regarding distributions from the Certificate Distribution Account.

 

The Company agrees to direct and shall have the sole authority to direct the Owner Trustee or Indenture Trustee or their successor in interest, as to the Permitted Investments in which the funds on deposit in the Trust Accounts (as such term is defined in the Sale and Servicing Agreement) may be invested.

 

Section 5.2   Application of Trust Funds.

 

(a)   On each Payment Date, the Owner Trustee or Indenture Trustee, on behalf of the Owner Trustee, shall direct the Paying Agent to distribute to the Master Servicer and the Residual Interestholders from amounts on deposit in the Certificate Distribution Account the distributions as provided in Section 5.02(b) of the Sale and Servicing Agreement with respect to such Payment Date.

 

(b)   On each Payment Date, the Owner Trustee shall cause the Paying Agent to send to each Residual Interestholder the statement provided to the Owner Trustee by the Master Servicer pursuant to Section 6.01 of the Sale and Servicing Agreement with respect to such Payment Date.

 

 

 

  

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(c)   In the event that any withholding tax is imposed on the Trust’s payment (or allocations of income) to an Owner, such tax shall reduce the amount otherwise distributable to the Owner in accordance with this Section.  The Owner Trustee is hereby authorized and directed to retain from amounts otherwise distributable to the Owners sufficient funds for the payment of any tax that is legally owed by the Trust (but such authorization shall not prevent the Owner Trustee from contesting any such tax in appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings).  The amount of any withholding tax imposed with respect to an Owner shall be treated as cash distributed to such Owner at the time it is withheld by the Trust and remitted to the appropriate taxing authority.  In the event of any claimed overwithholding, Owners shall have no claim for recovery against the Trust or other Owners.  If the amount withheld was not withheld from actual distributions, the Trust may, at its option, (i) require the Owner to reimburse the Trust for such withholding (and each Owner agrees to reimburse the Trust promptly following such request) or (ii) reduce any subsequent distributions by the amount of such withholding.  If the Owner Trustee determines that a withholding tax is payable with respect to a distribution (such as a distribution to an Owner (or any other beneficial owner of the Owner Trust) that is not a U.S. Person and that has not established an applicable exemption from withholding (such as an effective Form W-8BEN, Form W-8BEN-E or W-8ECI), the Owner Trustee shall in its sole discretion withhold such amounts as it determines are required to be withheld in accordance with this paragraph (c).  In the event that an Owner wishes to apply for a refund of any such withholding tax, the Owner Trustee shall reasonably cooperate with such owner in making such claim so long as such Owner agrees to reimburse the Owner Trustee for any out-of-pocket expenses incurred.

 

Section 5.3   Method of Payment.  Subject to Section 3.10, distributions required to be made to Owners on any Payment Date shall be made to each Owner of, record on the preceding Record Date either by wire transfer, in immediately available funds, to the account of such Holder at a bank or other entity having appropriate facilities therefor, if such Owner shall have provided to the Certificate Registrar appropriate written instructions at least five Business Days prior to such Payment Date; or, if not, by check mailed to such Owner at the address of such holder appearing in the Certificate Register.

 

Section 5.4   Segregation of Moneys; No Interest.  Subject to Sections 4.1, 5.1 and 5.2, moneys received by the Owner Trustee hereunder and deposited into the Certificate Distribution Account will be segregated except to the extent required otherwise by law or the Sale and Servicing Agreement and shall be invested in Permitted Investments at the direction of the Company.  The Owner Trustee shall not be liable for payment of any interest in respect of such moneys.

 

Section 5.5   Accounting and Reports to the Certificateholder, Owners, the Internal Revenue Service and Others.  The Owner Trustee shall deliver to each Owner [and the Securities Insurer,] as may be required by the Code and applicable Treasury Regulations, or as may be requested by such Owner [and the Securities Insurer,] such information, reports or statements as may be necessary to enable each Owner to prepare its federal and state income tax returns.  Consistent with the Trust’s characterization for tax purposes as a security arrangement for the issuance of non-recourse debt so long as the Company or any other Person is the sole Owner, no federal income tax return shall be filed on behalf of the Trust unless either (i) the Owner Trustee [and the Securities Insurer] shall receive an Opinion of Counsel that, based on a change in 

 

 

  

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applicable law occurring after the date hereof, or as a result of a transfer by the Company permitted by Section 3.4, the Code requires such a filing or (ii) the Internal Revenue Service shall determine that the Trust is required to file such a return.  In the event that there shall be two or more beneficial owners of the Trust, the Owner Trustee shall inform the Indenture Trustee [and the Securities Insurer] in writing of such event, (x) the Owner Trustee shall prepare or shall cause to be prepared federal and, if applicable, state or local partnership tax returns required to be filed by the Trust and shall remit such returns to the Company (or if the Company no longer owns any Residual Interest Certificates, the Owner designated for such purpose by the Company to the Owner Trustee in writing) at least (5) days before such returns are due to be filed, and (y) capital accounts shall be maintained for each Owner (or beneficial owner) in accordance with the Treasury Regulations under Section 704(b) of the Code reflecting each such Owner’s (or beneficial owner’s) share of the income, gains, deductions, and losses of the Trust and/or guaranteed payments made by the Trust and contributions to, and distributions from, the Trust.  The Company (or such designee Owner, as applicable) shall promptly sign such returns and deliver such returns after signature to the Owner Trustee and such returns shall be filed by the Owner Trustee with the appropriate tax authorities.  In the event that a “tax matters partner” (within the meaning of Code Section 6231(a)(7)) is required to be appointed with respect to the Trust, the Company is hereby designated as tax matters partner or, if the Company is not an Owner, the Owner selected by a majority of the Owners (by Percentage Interest) shall be designated as tax matters partner.  In no event shall the Owner Trustee or the Company (or such designee Owner, as applicable) be liable for any liabilities, costs or expenses of the Trust or the Noteholders arising out of the application of any tax law, including federal, state, foreign or local income or excise taxes or any other tax imposed on or measured by income (or any interest, penalty or addition with respect thereto or arising from a failure to comply therewith) except for any such liability, cost or expense attributable to any act or omission by the Owner Trustee or the Company (or such designee Owner, as applicable), as the case may be, in breach of its obligations under this Agreement.

 

ARTICLE VI

 

AUTHORITY AND DUTIES OF OWNER TRUSTEE

 

Section 6.1   General Authority.  The Owner Trustee is authorized and directed to execute and deliver or cause to be executed and delivered the Notes, the Residual Interest Certificates and the Basic Documents to which the Trust is to be a party and each certificate or other document attached as an exhibit to or contemplated by the Basic Documents to which the Trust is to be a party and any amendment or other agreement or instrument described in Article III, in each case, in such form as the Company shall approve, as evidenced conclusively by the Owner Trustee’s execution thereof, and, on behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver the Notes in the aggregate principal amount of $_________.  In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions required of the Trust, pursuant to the Basic Documents.

 

Section 6.2   General Duties.  It shall be the duty of the Owner Trustee:

 

(a)   to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of this Agreement and the Basic Documents to which the Trust is a party and to 

 

 

 

  

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administer the Trust in the interest of the Owners, subject to the Basic Documents and in accordance with the provisions of this Agreement.  Notwithstanding the foregoing, the Owner Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the Basic Documents to the extent the Administrator or the Indenture Trustee has agreed in the Administration Agreement or this Agreement, respectively, to perform any act or to discharge any duty of the Owner Trustee or the Trust hereunder or under any Basic Document, and the Owner Trustee shall not be held liable for the default or failure of the Administrator or the Indenture Trustee to carry out its obligations under the Administration Agreement or this Agreement, respectively; and

 

(b)   to obtain and preserve, the Issuing Entity’s qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of the Indenture, the Notes, the Collateral and each other instrument and agreement included in the Trust Estate.

 

Section 6.3   Action Upon Instruction.

 

(a)   Subject to the terms of this Agreement and in accordance with the terms of the Basic Documents, the Owners may by written instruction direct the Owner Trustee in the management of the Trust but only to the extent consistent with the limited purpose of the Trust.  Such direction may be exercised at any time by written instruction of the Owners pursuant to Article IV.

 

(b)   The Owner Trustee shall not be required to take any action hereunder or under any Basic Document if the Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Owner Trustee or is contrary to the terms hereof or of any Basic Document or is otherwise contrary to law.

 

(c)   Whenever the Owner Trustee is unable to decide between alternative courses of action permitted or required by the terms of this Agreement or under any Basic Document, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Owners [and the Securities Insurer requesting instruction from the Owners] [and the Securities Insurer] as to the course of action to be adopted, and to the extent the Owner Trustee acts in good faith [in accordance with any written instruction of the Securities Insurer, or with the prior consent of the Securities Insurer,] the Owners received, the Owner Trustee shall not be liable on account of such action to any Person.  [Upon the occurrence of a Securities Insurer Default no consent, approval or direction of the Securities Insurer shall be required.] If the Owner Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interests of the Owners, and shall have no liability to any Person for such action or inaction.

 

(d)   In the event that the Owner Trustee is unsure as to the application of any provision of this Agreement or any Basic Document or any such provision is ambiguous as to its 

 

 

 

  

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application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the course of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may give notice (in such form as shall be appropriate under the circumstances) to [the Securities Insurer and] the Owners requesting instruction and, to the extent that the Owner Trustee acts or refrains from acting in good faith [in accordance with any such instruction received from the Securities Insurer,] [or with the prior consent of the Securities Insurer,] from the Owners, the Owner Trustee shall not be liable, on account of such action or inaction, to any Person.  If the Owner Trustee shall not have received appropriate instruction within 10 days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interests of the Owners, and shall have no liability to any Person for such action or inaction.

 

(e)   [Notwithstanding anything in this Agreement to the contrary, upon the occurrence of a Securities Insurer Default no consent, approval or direction of the Securities Insurer shall be required for any action otherwise permitted hereunder.]

 

Section 6.4   No Duties Except as Specified in this Agreement, the Basic Documents or in Instructions.  The Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of, or otherwise deal with the Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Owner Trustee is a party, except as expressly provided by the terms of this Agreement, any Basic Document or in any document or written instruction received by the Owner Trustee pursuant to Section 6.3; and no implied duties or obligations shall be read into this Agreement or any Basic Document against the Owner Trustee.  The Owner Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to prepare or file any Securities and Exchange Commission filing for the Trust or to record this Agreement or any Basic Document.  The Owner Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any liens on any part of the Trust Estate that result from actions by, or claims against, the Owner Trustee that are not related to the ownership or the administration of the Trust Estate.

 

Section 6.5   No Action Except Under Specified Documents or Instructions.  The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal with any part of the Trust Estate except (i) in accordance with the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents and (iii) in accordance with any document or instruction delivered to the Owner Trustee pursuant to Section 6.3.

 

Section 6.6   Restrictions.  The Owner Trustee shall not take any action (a) that is inconsistent with the purposes of the Trust set forth in Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would result in the Trust’s becoming taxable as a corporation for Federal income tax purposes.  The Owners shall not direct the Owner Trustee to take action that would violate the provisions of this Section.

 

 

 

  

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ARTICLE VII

 

CONCERNING THE OWNER TRUSTEE

 

Section 7.1   Acceptance of Trusts and Duties.  The Owner Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts but only upon the terms of this Agreement and the Basic Documents.  The Owner Trustee also agrees to disburse all moneys actually received by it constituting part of the Trust Estate upon the terms of the Basic Documents and this Agreement.  The Owner Trustee shall not be answerable or accountable hereunder or under any Basic Document under any circumstances, except (i) for its own willful misconduct or gross negligence or (ii) in the case of the inaccuracy of any representation or warranty contained in Section 7.3 expressly made by the Owner Trustee.  In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence):

 

(a)   the Owner Trustee shall not be liable for any error of judgment made by a responsible officer of the Owner Trustee;

 

(b)   the Owner Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the instructions of the Administrator or the Owners;

 

(c)   no provision of this Agreement or any Basic Document shall require the Owner Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any Basic Document if the Owner Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it;

 

(d)   under no circumstances shall the Owner Trustee be liable for indebtedness evidenced by or arising under any of the Basic Documents, including the principal of and interest on the Notes;

 

(e)   the Owner Trustee shall not be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Depositor or the Company or for the form, character, genuineness, sufficiency, value or validity of any of the Trust Estate or for or in respect of the validity or sufficiency of the Basic Documents, other than the certificate of authentication on the Residual Interest Certificates, and the Owner Trustee shall in no event assume or incur any liability, duty, or obligation to any Noteholder or to any Owner, other than as expressly provided for herein and in the Basic Documents;

 

(f)   the Owner Trustee shall not be liable for the default or misconduct of the Administrator, the Depositor, the Company, the Indenture Trustee, the Master Servicer or the Servicer under any of the Basic Documents or otherwise and the Owner Trustee shall have no obligation or liability to perform the obligations of the Trust under this Agreement or the Basic Documents that are required to be performed by the Administrator under the Administration Agreement, the Indenture Trustee under the Indenture or the Master Servicer or Servicer under the Sale and Servicing Agreement; and

 

 

 

  

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(g)   the Owner Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement or any Basic Document, at the request, order or direction of any of the Owners, unless such Owners have offered to the Owner Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Owner Trustee therein or thereby.  The right of the Owner Trustee to perform any discretionary act enumerated in this Agreement or in any Basic Document shall not be construed as a duty, and the Owner Trustee shall not be answerable for other than its gross negligence or willful misconduct in the performance of any such act provided, that the Owner Trustee shall be liable for its negligence or willful misconduct in the event that it assumes the duties and obligations of the Indenture Trustee under the Sale and Servicing Agreement pursuant to Section 10.5.

 

Section 7.2   Furnishing of Documents.  The Owner Trustee shall furnish (a) to the Owners [and the Securities Insurer] promptly upon receipt of a written request therefor, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Owner Trustee under the Basic Documents and (b) to Noteholders promptly upon written request therefor, copies of the Sale and Servicing Agreement, the Administration Agreement and the Owner Trust Agreement.

 

Section 7.3   Representations and Warranties.

 

(a)   The Owner Trustee hereby represents and warrants to the Depositor, [the Securities Insurer] and the Company, for the benefit of the Owners, that:

 

(i)   It is a _________________ duly organized and validly existing in good standing under the laws of the State of __________________.  It has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement.

 

(ii)   It has taken all corporate action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf.

 

(iii)   Neither the execution nor the delivery by it of this Agreement nor the consummation by it of the transactions contemplated hereby nor compliance by it with any of the terms or provisions hereof will contravene any Federal or law, governmental rule or regulation governing the banking or trust powers of the Owner Trustee or any judgment or order binding on it, or constitute any default under its charter documents or by-laws or any indenture, mortgage, contract, agreement or instrument to which it is a party or by which any of its properties may be bound.

 

 

 

  

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(b)   The Paying Agent hereby represents and warrants to the Depositor, [the Securities Insurer] and the Company that:

 

(i)   It is a _________________ duly organized and validly existing in good standing under the laws of the United States.  It has all requisite power and authority to execute, deliver and perform its obligations under this Agreement.

 

(ii)   It has taken all action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf.

 

(iii)   Neither the execution nor the delivery by it of this Agreement nor the consummation by it of the transactions contemplated hereby nor compliance by it with any of the terms or provisions hereof will contravene any Federal or State law, governmental rule or regulation governing the banking or trust powers of the Paying Agent or any judgment or order binding on it, or constitute any default under its charter documents or by-laws or any indenture, mortgage, contract, agreement or instrument to which it is a party or by which any of its properties may be bound.

 

Section 7.4   Reliance; Advice of Counsel.

 

(a)   The Owner Trustee shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond, or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties.  The Owner Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect.  As to any fact or matter the method of the determination of which is not specifically prescribed herein, the Owner Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or other authorized officers of the relevant party, as to such fact or matter and such certificate shall constitute full protection to the Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon.

 

(b)   In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement or the Basic Documents, the Owner Trustee (i) may act directly or through its agents or attorneys pursuant to agreements entered into with any of them, and the Owner Trustee shall not be liable for the conduct or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Owner Trustee with reasonable care, and (ii) may consult with counsel, accountants and other skilled persons to be selected with reasonable care and employed by it.  The Owner Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the opinion or advice of any such counsel, accountants or other such persons and not contrary to this Agreement or any Basic Document.

 

Section 7.5   Not Acting in Individual Capacity.  Except as provided in this Agreement, in accepting the trusts hereby created ______________________ acts solely as Owner Trustee 

 

 

 

  

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hereunder and not in its individual capacity and all Persons having any claim against the Owner Trustee by reason of the transactions contemplated by this Agreement or any Basic Document shall look only to the Trust Estate for payment or satisfaction thereof.

 

Section 7.6   Owner Trustee Not Liable for Residual Interest Certificates or Home Loans.  The recitals contained herein and in the Residual Interest Certificates (other than the signature and countersignature of the Owner Trustee on the Residual Interest Certificates) shall be taken as the statements of the Depositor and the Company, and the Owner Trustee assumes no responsibility for the correctness thereof.  The Owner Trustee makes no representations as to the validity or sufficiency of this Agreement, of any Basic Document or of the Residual Interest Certificates (other than the signature and countersignature of the Owner Trustee on the Residual Interest Certificates and as specified in Section 7.3) or the Notes, or of any Home Loans or related documents.  The Owner Trustee shall at no time have any responsibility or liability for or with respect to the legality, validity and enforceability of any Home Loan, or the perfection and priority of any security interest created by any Home Loan or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to Owners under this Agreement or the Noteholders under the Indenture, including, without limitation:  the existence, condition and ownership of any Mortgaged Property; the existence and enforceability of any insurance thereon; the existence and contents of any Home Loan on any computer or other record thereof, the validity of the assignment of the Home Loans to the Trust or of any intervening assignment; the completeness of any Home Loan; the performance or enforcement of any Home Loan; the compliance by the Depositor, the Company, the Master Servicer or the Servicer with any warranty or representation made under any Basic Document or in any related document or the accuracy of any such warranty or representation or any action of the Administrator, the Indenture Trustee, the Master Servicer or the Servicer or any subservicer taken in the name of the Owner Trustee.

 

Section 7.7   Owner Trustee May Own Residual Interest Certificates and Notes.  The Owner Trustee in its individual or any other capacity may become the owner or pledgee of Residual Interest Certificates or Notes and may deal with the Depositor, the Company, the Administrator, the Indenture Trustee and the Master Servicer in banking transactions with the same rights as it would have if it were not Owner Trustee.

 

Section 7.8   Licenses.  The Owner Trustee shall cause the Trust to use its best efforts to obtain and maintain the effectiveness of any licenses required in connection with this Agreement and the Basic Documents and the transactions contemplated hereby and thereby until such time as the Trust shall terminate in accordance with the terms hereof.

 

ARTICLE VIII

 

COMPENSATION OF OWNER TRUSTEE AND PAYING AGENT

 

Section 8.1   Fees and Expenses.  The Owner Trustee shall receive as compensation for its services hereunder such fees as have been separately agreed upon before the date hereof between the Company and the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the Company for its other reasonable expenses hereunder, including the reasonable compensation, expenses and disbursements of such agents, representatives, experts 

 

 

 

  

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and counsel as the Owner Trustee may employ in connection with the exercise and performance of its rights and its duties hereunder.  The Paying Agent shall receive as compensation for its services hereunder such fees, if any, as have been separately agreed upon before the date hereof between the Company and the Paying Agent.

 

Section 8.2   Indemnification.  The Company shall be liable as primary obligor, and the Master Servicer as secondary obligor pursuant to the Administration Agreement, for, and shall indemnify the Owner Trustee, the Paying Agent and their successors, assigns, agents and servants (collectively, the “Indemnified Parties”) from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, “Expenses”) which may at any time be imposed on, incurred by, or asserted against the Owner Trustee or any Indemnified Party in any way relating to or arising out of this Agreement, the Basic Documents, the Trust Estate, the administration of the Trust Estate or the action or inaction of the Owner Trustee or the Paying Agent hereunder.  The indemnities contained in this Section shall survive the resignation or termination of the Owner Trustee or the termination of this Agreement.  In any event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section, the Owner Trustee’s or Paying Agent’s choice of legal counsel shall be subject to the approval of the Company, which approval shall not be unreasonably withheld.

 

Section 8.3   Payments to the Owner Trustee and Paying Agent.  Any amounts paid to the Owner Trustee and/or Paying Agent pursuant to this Article VIII shall be deemed not to be a part of the Trust Estate immediately after such payment.

 

ARTICLE IX

 

TERMINATION OF OWNER TRUST AGREEMENT

 

Section 9.1   Termination of Owner Trust Agreement.

 

(a)   This Agreement (other than Article VIII) and the Trust shall terminate and be of no further force or effect on the earlier of:  (i) the satisfaction and discharge of the Indenture pursuant to Section 4.01 of the Indenture and the termination of the Sale and Servicing Agreement and the Insurance Agreement; and (ii) the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy (the late ambassador of the United States to the Court of St. James’s) alive on the date hereof.  The bankruptcy, liquidation, dissolution, death or incapacity of any Owner shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle such Owner’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Trust or Trust Estate nor (z) otherwise affect the rights, obligations and liabilities of the parties hereto.

 

(b)   The Residual Interest Certificates shall be subject to an early redemption or termination at the option of the Majority Residual Interestholders, [the Securities Insurer] or the Master Servicer in the manner and subject to the provisions of Section 11.02 of the Sale and Servicing Agreement.

 

 

 

  

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(c)   Except as provided in Sections 9.1(a) and (b) above, none of the Depositor, the Company, the Securities Insurer nor any Owner shall be entitled to revoke or terminate the Trust.

 

(d)   Notice of any termination of the Trust, specifying the Payment Date upon which the Certificateholders shall surrender their Residual Interest Certificates to the Paying Agent for payment of the final distributions and cancellation, shall be given by the Owner Trustee to the Certificateholders, [the Securities Insurer] and the Rating Agencies mailed within ______________ Business Days of receipt by the Owner Trustee of notice of such termination pursuant to Section 9.1(a) or (b) above, which notice given by the Owner Trustee shall state (i) the Payment Date upon or with respect to which final payment of the Residual Interest Certificates shall be made upon presentation and surrender of the Residual Interest Certificates at the office of the Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only upon presentation and surrender of the Residual Interest Certificates at the office of the Paying Agent therein specified.  The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent at the time such notice is given to Certificateholders.  Upon presentation and surrender of the Residual Interest Certificates, the Paying Agent shall cause to be distributed to Certificateholders amounts distributable on such Payment Date pursuant to Section 5.02 of the Sale and Servicing Agreement.

 

In the event that all of the Certificateholders shall not surrender their Residual Interest Certificates for cancellation within six months after the date specified in the above mentioned written notice, the Owner Trustee shall give a second written notice to the remaining Certificateholders to surrender their Residual Interest Certificates for cancellation and receive the final distribution with respect thereto.  If within one year after the second notice all the Residual Interest Certificates shall not have been surrendered for cancellation, the Owner Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining Certificateholders concerning surrender of their Residual Interest Certificates, and the cost thereof shall be paid out of the funds and other assets that shall remain subject to this Agreement.  Any funds remaining in the Trust after exhaustion of such remedies shall be distributed by the Paying Agent to the Residual Interestholders on a pro rata basis.

 

(e)   Upon the winding up of the Trust and its termination, the Owner Trustee shall cause the Certificate of Trust to be canceled by filing a certificate of cancellation with the Secretary of State in accordance with the provisions of Section 3820 of the Business Trust Statute.

 

ARTICLE X

 

SUCCESSOR OWNER TRUSTEES

AND ADDITIONAL OWNER TRUSTEES

 

Section 10.1   Eligibility Requirements for Owner Trustee.  The Owner Trustee shall at all times be a corporation satisfying the provisions of Section 3807(a) of the Business Trust Statute; authorized to exercise corporate powers having a combined capital and surplus of at least 

 

 

 

  

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$50,000,000 and subject to supervision or examination by Federal or state authorities; having (or having a parent which has) a long-term rating of at least “___”  by _________________ and ____________________ [and being acceptable to the Securities Insurer].  If such corporation shall publish reports of condition at least annually, pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.  In case at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of this Section, the Owner Trustee shall resign immediately in the manner and with the effect specified in Section 10.2.

 

Section 10.2   Resignation or Removal of Owner Trustee.  The Owner Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Administrator, [the Securities Insurer] and the Indenture Trustee.  Upon receiving such notice of resignation, the Administrator shall promptly appoint a successor Owner Trustee [(acceptable to the Securities Insurer)] by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Owner Trustee and one copy to the successor Owner Trustee.  If no successor Owner Trustee shall have been so appointed and have accepted appointment within 30 days after the giving of such notice of resignation, the resigning Owner Trustee [or the Securities Insurer] may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee.

 

If at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of Section 10.1 and shall fail to resign after written request therefor by the Administrator or the Securities Insurer, or if at any time the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Owner Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then [the Securities Insurer, or] the Administrator [with the consent of the Securities Insurer,] may remove the Owner Trustee.  If the [Securities Insurer or] the Administrator shall remove the Owner Trustee under the authority of the immediately preceding sentence, [the Securities Insurer, or] the Administrator [with the prior consent of the Securities Insurer,] shall promptly appoint a successor Owner Trustee by written instrument in duplicate, one copy of which instrument shall be delivered to the outgoing Owner Trustee so removed and one copy to the successor Owner Trustee and payment of all fees owed to the outgoing Owner Trustee.

 

Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Owner Trustee pursuant to Section 10.3, [Securities Insurer provides written approval and payment of all fees and expenses owed to the outgoing Owner Trustee.] The Administrator shall provide notice of such resignation or removal of the Owner Trustee to each of the Rating Agencies [and the Securities Insurer.]

 

Section 10.3   Successor Owner Trustee.  Any successor Owner Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the Administrator, [the Securities Insurer] and to its predecessor Owner Trustee an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee shall become effective and such successor Owner Trustee (if acceptable to the 

 

 

 

  

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Securities Insurer), without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties, and obligations of its predecessor under this Agreement, with like effect as if originally named as Owner Trustee.  The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all documents and statements and monies held by it under this Agreement; and the Administrator and the predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Owner Trustee all such rights, powers, duties, and obligations.

 

No successor Owner Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Owner Trustee shall be eligible pursuant to Section 10.1.

 

Upon acceptance of appointment by a successor Owner Trustee pursuant to this Section, the Administrator shall mail notice of the successor of such Owner Trustee to all Owners, the Indenture Trustee, the Noteholders, [the Securities Insurer] and the Rating Agencies.  If the Administrator fails to mail such notice within 10 days after acceptance of appointment by the successor Owner Trustee, the successor Owner Trustee shall cause such notice to be mailed at the expense of the Administrator.

 

Section 10.4   Merger or Consolidation of Owner Trustee.  Any corporation into which the Owner 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 Owner Trustee shall be a party, or any corporation succeeding to all or substantially all of the corporate trust business of the Owner Trustee, shall be the successor of the Owner Trustee hereunder, provided such corporation shall be eligible pursuant to Section 10.1, without the execution or filing of any instrument or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding; provided further that the Owner Trustee shall mail notice of such merger or consolidation to [the Securities Insurer and] the Rating Agencies.

 

Section 10.5   Appointment of Co-Owner Trustee or Separate Owner Trustee.  Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Trust Estate or any Mortgaged Property may at the time be located, and for the purpose of performing certain duties and obligations of the Owner Trustee with respect to the Trust and the Residual Interest Certificates under the Sale and Servicing Agreement, the Administrator and the Owner Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Owner Trustee [and acceptable to the Securities Insurer] to act as co-owner trustee, jointly with the Owner Trustee, or separate trustee or separate trustees, of all or any part of the Trust Estate, and to vest in such Person, in such capacity, such title to the Trust, or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Administrator[, the Securities Insurer] and the Owner Trustee may consider necessary or desirable.  If the Administrator shall not have joined in such appointment within 25 days after the receipt by it of a request so to do, the Owner Trustee [(with the consent of the Securities Insurer)] shall have the power to make such appointment.  No co-owner trustee or separate owner trustee under this Agreement shall be required to meet the terms of eligibility as a successor trustee pursuant to Section 10.1 and no notice of the appointment of any co-trustee 

 

 

 

  

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or separate owner trustee shall be required pursuant to Section 10.3 except that notice to, and the written consent of, the Securities Insurer shall be required for the appointment of a co-trustee.

 

Each separate owner trustee and co-owner trustee shall, to the extent permitted by law, be appointed and act subject to the following provision and conditions:

 

(i)   all rights, powers, duties and obligations conferred or imposed upon the Owner Trustee shall be conferred upon and exercised or performed by the Owner Trustee and such separate owner trustee or co-owner trustee jointly (it being understood that such separate owner trustee or co-owner trustee is not authorized to act separately without the Owner Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed, the Owner Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties, and obligations (including the holding of title to the Trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate owner trustee or co-owner trustee, but solely at the direction of the Owner Trustee; provided that Paying Agent, in performing its duties and obligations under the Sale and Servicing Agreement, may act separately in its capacity as Indenture Trustee without the Owner Trustee joining in such Acts;

 

(ii)   no owner trustee under this Agreement shall be personally liable by reason of any act or omission of any other owner trustee under this Agreement; and

 

(iii)   the Administrator and the Owner Trustee acting jointly may at any time accept the resignation of or remove any separate owner trustee or co-owner trustee.

 

Any notice, request or other writing given to the Owner Trustee shall be deemed to have been given to the separate owner trustees and co-owner trustees, as if given to each of them.  Every instrument appointing any separate owner trustee or co-owner trustee, other than this Agreement, shall refer to this Agreement and to the conditions of this Article.  Each separate owner trustee and co-owner trustee, upon its acceptance of appointment, shall be vested with the estates specified in its instrument of appointment, either jointly with the Owner Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Owner Trustee.  Each such instrument shall be filed with the Owner Trustee and a copy thereof given to the Administrator.

 

Any separate owner trustee or co-owner trustee may at any time appoint the Owner Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.  If any separate owner trustee or co-owner trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Owner Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

 

 

  

32

  

 

The Indenture Trustee, in its capacity as Paying Agent, shall not have any rights, duties or obligations except as expressly provided in this Agreement and the Sale and Servicing Agreement.

 

ARTICLE XI

 

MISCELLANEOUS

 

Section 11.1   Supplements and Amendments.  This Agreement may be amended by the Depositor, the Company and the Owner Trustee, [with the prior consent of the Securities Insurer and] with prior written notice to the Rating Agencies, but without the consent of any of the Noteholders or the Owners or the Indenture Trustee, to cure any ambiguity, to correct or supplement any provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Noteholders or the Owners provided, however, that such action shall not adversely affect in any material respect the interests of any Noteholder or Owner, or, without its consent, the Paying Agent.  An amendment described above shall be deemed not to adversely affect in any material respect the interests of any Noteholder or Owner if (i) an opinion of counsel is obtained to such effect, and (ii) the party requesting the amendment satisfies the Rating Agency Condition with respect to such amendment.

 

This Agreement may also be amended from time to time by the Depositor, the Company and the Owner Trustee, with the prior written consent of the Rating Agencies, the Securities Insurer and with the prior written consent of the Indenture Trustee, the Holders (as defined in the Indenture) of Notes evidencing more than 50% of the Outstanding Amount of the Notes and the Majority Residual Interestholders, and if affected thereby, the Paying Agent, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Owners; provided, however, that no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on the Home Loans or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholders or (b) reduce the aforesaid percentage of the Outstanding Amount of the Notes or the Percentage Interests required to consent to any such amendment, in either case of clause (a) or (b) without the consent of the holders of all the outstanding Notes, and in the case of clause (b) without the consent of the holders of all the outstanding Residual Interest Certificates.

 

Promptly after the execution of any such amendment or consent, the Owner Trustee shall furnish written notification of the substance of such amendment or consent to each Certificateholder, the Indenture Trustee[, the Securities Insurer] and each of the Rating Agencies.

 

It shall not be necessary for the consent of Owners, the Noteholders or the Indenture Trustee pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof.  The manner of obtaining such consents (and any other consents of Owners provided for in this Agreement or in any other Basic Document) and of evidencing the authorization of the execution thereof by Certificateholders shall be subject to such reasonable requirements as the Owner Trustee may prescribe.

 

 

 

  

33

  

 

Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State.

 

Prior to the execution of any amendment to this Agreement or the Certificate of Trust, the Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement.  The Owner Trustee may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s own rights, duties or immunities under this Agreement or otherwise.

 

Section 11.2   No Legal Title to Trust Estate in Owners.  The Owners shall not have legal title to any part of the Trust Estate.  The Owners shall be entitled to receive distributions with respect to their undivided ownership interest therein only in accordance with Articles V and IX.  No transfer, by operation of law or otherwise, of any right, title, or interest of the Owners to and in their ownership interest in the Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Trust Estate.

 

Section 11.3   Limitations on Rights of Others.  The provisions of this Agreement are solely for the benefit of the Owner Trustee, the Depositor, the Company, the Owners, the Administrator, the Paying Agent, the Securities Insurer and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.

 

Section 11.4   Notices.

 

(a)   Unless otherwise expressly specified or permitted by the terms hereof, all notices shall be in writing, mailed by certified mail, postage prepaid, return receipt requested, and shall be deemed given upon actual receipt by the intended recipient, at the following addresses:  (i) if to the Owner Trustee, its Corporate Trust Office; (ii) if to the Depositor, [_________________________], [200 Park Avenue, New York, New York 10166], Attention:  [____________], General Counsel; (iii) if to the Company, ___________________ (iv) __________________________ [(v) if to the Securities Insurer _______________________ _______________________________________________] or, as to each such party, at such other address as shall be designated by such party in a written notice to each other party.

 

(b)   Any notice required or permitted to be given to an Owner shall be given by first-class mail, postage prepaid, at the address of such Owner as shown in the Certificate Register.  Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Owner receives such notice.

 

Section 11.5   Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

 

 

 

  

34

  

 

Section 11.6   Separate Counterparts.  This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

 

Section 11.7   Successors and Assigns.  All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, the Depositor, the Company, the Securities Insurer, the Owner Trustee and its successors and each owner and its successors and permitted assigns, all as herein provided.  Any request, notice, direction, consent, waiver or other instrument or action by an Owner shall bind the successors and assigns of such Owner.

 

Section 11.8   No Petition.  The Owner Trustee, by entering into this Agreement, each Owner, by accepting a Residual Interest Certificate, the Depositor, the Company and the Indenture Trustee and each Noteholder by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the Company, the Depositor or the Trust, as the case may be, or join in any institution against the Company or the Trust of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States Federal or state bankruptcy or law in connection with any obligations relating to the Residual Interest Certificates, the Notes, this Agreement or any of the Basic Documents.

 

Section 11.9   No Recourse.  Each Owner by accepting a Residual Interest Certificate acknowledges that such Residual Interest Certificate represents a beneficial interest in the Trust only and does not represent an interest in or an obligation of the Company, the Master Servicer, the Depositor, the Administrator, the Owner Trustee, the Indenture Trustee, [the Securities Insurer] or any Affiliate thereof and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Residual Interest Certificates or the Basic Documents.

 

Section 11.10   Headings.  The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.

 

Section 11.11   GOVERNING LAW.  THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

Section 11.12   Residual Interest Transfer Restrictions.  The Residual Interest may not be acquired by or for the account of a Benefit Plan Investor.  By accepting and holding a Residual Interest Certificate, the Owner thereof shall be deemed to have represented and warranted that it is not a Benefit Plan Investor.

 

Section 11.13   [Third-Party Beneficiary.  The parties hereto acknowledge that the Securities Insurer is an express third party beneficiary hereof entitled to enforce any rights reserved to it hereunder as if it were actually a party hereto.]

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

  

35

  

 

IN WITNESS OF, the parties hereto have caused this Owner Trust Agreement to be duly executed by their respective officers hereunto duly authorized, as of the day and year first above written.

 

	 	[_____________________________________],	 
	 	Depositor	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

 

	 	                    ,	 
	 	Transferor	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

 

	 	                    ,	 
	 	not in its individual capacity but

       solely as Owner Trustee	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

 

	 	                    ,	 
	 	not in its individual capacity but

       solely as Paying Agent	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	Name:	 	 
	 	 	Title:	 	 

 

 

 

  

  

  

 

 

EXHIBIT A

 

TO THE OWNER TRUST AGREEMENT

 

FORM OF RESIDUAL INTEREST CERTIFICATE

 

THE RESIDUAL INTEREST IN THE TRUST REPRESENTED BY THIS RESIDUAL INTEREST CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS.  THIS RESIDUAL INTEREST CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF BY THE HOLDER HEREOF ONLY TO (I) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) AN INSTITUTIONAL “ACCREDITED INVESTOR” WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE ACT (INCLUDING, BUT NOT LIMITED TO, ______________________) IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS.  NO PERSON IS OBLIGATED TO REGISTER THIS RESIDUAL INTEREST UNDER THE ACT OR ANY STATE SECURITIES LAWS.

 

EXCEPT AS PROVIDED IN SECTION 3.10(B) OF THE OWNER TRUST AGREEMENT, NO TRANSFER OF THIS RESIDUAL INTEREST CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN SHALL BE MADE UNLESS THE OWNER TRUSTEE HAS RECEIVED A CERTIFICATE FROM THE TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE (I) IS NOT (A) AN “EMPLOYEE BENEFIT PLAN” WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, (B) A “PLAN” WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (C) AN ENTITY WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN’S INVESTMENT IN THE ENTITY (EACH, A “BENEFIT PLAN INVESTOR”), AND (II) IS NOT DIRECTLY OR INDIRECTLY PURCHASING SUCH RESIDUAL INTEREST CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A BENEFIT PLAN INVESTOR.

 

 

 

 

  

A-1

  

 

_____________ HOME LOAN OWNER TRUST 20___-__

 

RESIDUAL INTEREST CERTIFICATE

 

No.  ____

 

THIS CERTIFIES THAT ________________________________ (the “Owner”) is the registered owner of a ____% residual interest in   Home Loan Owner Trust 20___-__ (the “Trust”) existing under the laws of the State of Delaware and created pursuant to the Owner Trust Agreement dated as of ___________, 20__ (the “Owner Trust Agreement”) between [____________________________________], as Depositor, ______________________, as the Company, ________________, not in its individual capacity but solely in its fiduciary capacity as owner trustee under the Owner Trust Agreement (the “Owner Trustee”) and _____________ ______________________, as Paying Agent (the “Paying Agent”).  Initially capitalized terms used but not defined herein have the meanings assigned to them in the Owner Trust Agreement.  The Owner Trustee, on behalf of the Issuing Entity and not in its individual capacity, has executed this Residual Interest Certificate by one of its duly authorized signatories as set forth below.  This Residual Interest Certificate is one of the Residual Interest Certificates referred to in the Owner Trust Agreement and is issued under and is subject to the terms, provisions and conditions of the Owner Trust Agreement to which the holder of this Residual Interest Certificate by virtue of the acceptance hereof agrees and by which the holder hereof is bound.  Reference is hereby made to the Owner Trust Agreement and the Sale and Master Servicing Agreement for the rights of the holder of this Residual Interest Certificate, as well as for the terms and conditions of the Trust created by the Owner Trust Agreement.

 

The holder, by its acceptance hereof, agrees not to transfer this Residual Interest Certificate except in accordance with terms and provisions of the Owner Trust Agreement.

 

THIS RESIDUAL INTEREST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

[SIGNATURE PAGE FOLLOWS]

 

 

 

 

 

 

 

  

A-2

  

 

 

IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in its individual capacity, has caused this Residual Interest Certificate to be duly executed.

 

 

 

	 	
______ HOME LOAN OWNER TRUST 20___-

	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	
not in its individual capacity but solely as 

Owner Trustee under the Owner Trust 

Agreement

	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	Authorized Signatory	 
	 	 	 	 
	 	 	 	 
	DATED:  ____________________, 20_____	 	 	 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Certificates referred to in the within-mentioned Owner Trust Agreement.

 

	
 

	
By: 

	 	 
	 	 	
not in its individual capacity but solely as 

Owner Trustee under the Owner Trust 

Agreement, as Authenticating Agent

	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	Authorized Signatory	 
	 	 	 	 
	 	 	 	 
	 	 	 	 

 

 

 

 

 

  

A-3

  

 

ASSIGNMENT

 

FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto

 

PLEASE INSERT SOCIAL SECURITY

OR OTHER IDENTIFYING NUMBER

OF ASSIGNEE

 

 

	 
	
(Please print or type name and address, including postal zip code, of assignee)

	 
	 
	
the within Certificate, and all rights thereunder,

hereby irrevocably constituting and appointing

	 
	                                                                                      Attorney
	
to transfer said Certificate on the books of the Certificate Registrar, with full power of substitution in the premises.

 

 

	Dated:                 	 	 
	 	 	 
	 	 	                              1*/
	 	 	Signature Guaranteed:
	 	 	 
	 	 	                               */
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

	
1

	
NOTICE:  The signature to this assignment must correspond with the name as it appears upon the face of the within Certificate in every particular, without alteration, enlargement or any change whatever.  Such signature must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company.

 

 

 

  

A-4

  

 

 

EXHIBIT B

 

TO THE OWNER TRUST AGREEMENT

 

CERTIFICATE OF TRUST OF

_____________ HOME LOAN OWNER TRUST 20___-__

 

THIS Certificate of Trust of _____________ Home Loan Owner Trust 20___-__ (the “Trust”), dated __________, 20__, is being duly executed and filed by _____________, a __________________, as trustee, and __________________, as paying agent, to form a business trust under the Delaware Business Trust Act (12 DEL.  CODE, ss.ss.  3801 et seq.).

 

1.           NAME.  The name of the business trust formed hereby is ______________  Home Loan Owner Trust 20___-__.

 

2.           TRUSTEE.  The name and business address of the trustee of the Trust, in the State of _______________ is ______________________ ________________________ ______________________ _____________________.

 

* * *

 

 

 

 

 

  

B-1

  

 

 

IN WITNESS WHEREOF, the undersigned, being the owner trustee of the Trust, have executed this Certificate of Trust as of the date first above written.

 

	
 

	
By: 

	 	 
	 	 	
not in its individual capacity but solely as 

Owner Trustee under the Owner Trust 

Agreement, dated as of _______________, 20__

	 
	 	 	 	 
	 	 	 	 
	 	By:	 	 
	 	 	Name:	 
	 	 	Title:	 
	 	 	 	 
	 	 	 	 

 

 

 

 

 

	B-2efc14-505_ex45.htm

Exhibit 4.5

 

 

LOAN OWNER TRUST 20__-_,

as Issuing Entity

 

 

 

and

 

 

 

,

as Indenture Trustee

FORM OF INDENTURE

Dated as of ___________, 20___

 

 

 

 

______________ HOME LOAN OWNER TRUST 20__-_

Home Loan Asset Backed Notes,

Series 20__-_

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

  

  

TABLE OF CONTENTS

 

Page

 

	
ARTICLE I

	  
	
DEFINITIONS

	  
	
Section 1.01

	
Definitions

	
2

	
Section 1.02

	
Incorporation by Reference of Trust Indenture Act

	
9

	
Section 1.03

	
Rules of Construction

	
9

	  
	
ARTICLE II

	  
	
THE NOTES

	  
	
Section 2.01

	
Form

	
9

	
Section 2.02

	
Execution, Authentication, Delivery and Dating

	
10

	
Section 2.03

	
Registration; Registration of Transfer and Exchange

	
10

	
Section 2.04

	
Mutilated, Destroyed, Lost or Stolen Notes

	
12

	
Section 2.05

	
Persons Deemed Note Owners

	
12

	
Section 2.06

	
Payment of Principal and/or Interest; Defaulted Interest

	
13

	
Section 2.07

	
Cancellation

	
14

	
Section 2.08

	
Conditions Precedent to the Authentication of the Notes

	
14

	
Section 2.09

	
Release of Collateral

	
16

	
Section 2.10

	
Book-Entry Notes

	
17

	
Section 2.11

	
Notices to Clearing Agency

	
17

	
Section 2.12

	
Definitive Notes

	
17

	
Section 2.13

	
Tax Treatment

	
18

	  
	
ARTICLE III

	  
	
COVENANTS

	  
	
Section 3.01

	
Payment of Principal and/or Interest

	
18

	
Section 3.02

	
Maintenance of Office or Agency

	
18

	
Section 3.03

	
Money for Payments to Be Held in Trust

	
19

	
Section 3.04

	
Existence

	
21

	
Section 3.05

	
Protection of Collateral

	
21

	
Section 3.06

	
Annual Opinions as to Collateral

	
21

	
Section 3.07

	
Performance of Obligations

	
22

	
Section 3.08

	
Negative Covenants

	
23

	
Section 3.09

	
Annual Statement as to Compliance

	
24

	
Section 3.10

	
Covenants of the Issuing Entity

	
24

	
Section 3.11

	
Restricted Payments

	
25

	
Section 3.12

	
Treatment of Notes as Debt for Tax Purposes

	
25

	
Section 3.13

	
Notice of Events of Default

	
25

 

  

  

  

 

	
Section 3.14

	
Further Instruments and Acts

	
25

	  
	
ARTICLE IV

	  
	
SATISFACTION AND DISCHARGE

	  
	
Section 4.01

	
Satisfaction and Discharge of Indenture

	
25

	
Section 4.02

	
Application of Trust Money

	
27

	
Section 4.03

	
Repayment of Moneys Held by Paying Agent

	
27

	  
	
ARTICLE V

	  
	
REMEDIES

	  
	
Section 5.01

	
Events of Default

	
27

	
Section 5.02

	
Acceleration of Maturity; Rescission and Annulment

	
29

	
Section 5.03

	
Collection of Indebtedness and Suits for Enforcement by Indenture Trustee

	
30

	
Section 5.04

	
Remedies; Priorities

	
32

	
Section 5.05

	
Optional Preservation of the Collateral

	
34

	
Section 5.06

	
Limitation of Suits

	
34

	
Section 5.07

	
Unconditional Rights of Noteholders to Receive Principal and/or Interest

	
35

	
Section 5.08

	
Restoration of Rights and Remedies

	
35

	
Section 5.09

	
Rights and Remedies Cumulative

	
35

	
Section 5.10

	
Delay or Omission Not a Waiver

	
35

	
Section 5.11

	
Control by Noteholders

	
36

	
Section 5.12

	
Waiver of Past Defaults

	
36

	
Section 5.13

	
Undertaking For Costs

	
37

	
Section 5.14

	
Waiver of Stay or Extension Laws

	
37

	
Section 5.15

	
Action on Notes

	
37

	
Section 5.16

	
Performance and Enforcement of Certain Obligations

	
37

	
Section 5.17

	
Rights in Respect of Insolvency Proceedings

	
38

	
Section 5.18

	
[Effect of Payments by the Securities Insurer; Subrogation

	
39

	  
	
ARTICLE VI

	  
	
THE INDENTURE TRUSTEE

	  
	
Section 6.01

	
Duties of Indenture Trustee

	
39

	
Section 6.02

	
Rights of Indenture Trustee

	
41

	
Section 6.03

	
Individual Rights of Indenture Trustee

	
41

	
Section 6.04

	
Indenture Trustee’s Disclaimer

	
41

	
Section 6.05

	
Notices of Default

	
42

	
Section 6.06

	
Reports by Indenture Trustee to Holders

	
42

	
Section 6.07

	
Compensation and Indemnity

	
42

	
Section 6.08

	
Replacement of Indenture Trustee

	
42

	
Section 6.09

	
Successor Indenture Trustee by Merger

	
43

	
Section 6.10

	
Appointment of Co-Indenture Trustee or Separate Indenture Trustee

	
44

 

  

ii

  

 

	
Section 6.11

	
Eligibility; Disqualification

	
45

	
Section 6.12

	
Preferential Collection of Claims Against Issuing Entity

	
45

	
Section 6.13

	
Waiver of Setoff

	
45

	  
	
ARTICLE VII

	  
	
NOTEHOLDERS’ LISTS AND REPORTS

	  
	
Section 7.01

	
Issuing Entity to Furnish Indenture Trustee Names and Addresses of Noteholders

	
45

	
Section 7.02

	
Preservation of Information; Communications to Noteholders

	
46

	
Section 7.03

	
Reports by Issuing Entity

	
46

	
Section 7.04

	
Reports by Indenture Trustee

	
47

	  
	
ARTICLE VIII

	  
	
ACCOUNTS, DISBURSEMENTS AND RELEASES

	  
	
Section 8.01

	
Collection of Money and Claims Under the Guaranty Policy

	
47

	
Section 8.02

	
Trust Accounts; Payments

	
47

	
Section 8.03

	
General Provisions Regarding Accounts

	
49

	
Section 8.04

	
Servicer’s Monthly Statements

	
49

	
Section 8.05

	
Release of Collateral

	
49

	
Section 8.06

	
Opinion of Counsel

	
50

	  
	
ARTICLE IX

	  
	
SUPPLEMENTAL INDENTURES

	  
	
Section 9.01

	
Supplemental Indentures Without Consent of Noteholders

	
50

	
Section 9.02

	
Supplemental Indentures with Consent of Noteholders

	
51

	
Section 9.03

	
Execution of Supplemental Indentures

	
53

	
Section 9.04

	
Effect of Supplemental Indentures

	
53

	
Section 9.05

	
Conformity with Trust Indenture Act

	
53

	
Section 9.06

	
Reference in Notes to Supplemental Indentures

	
53

	
Section 9.07

	
Amendments to Owner Trust Agreement

	
54

	  
	
ARTICLE X

	  
	
REDEMPTION OF NOTES

	  
	
Section 10.01

	
Redemption

	
54

	
Section 10.02

	
Form of Redemption Notice

	
54

	
Section 10.03

	
Notes Payable on Redemption Date; Provision for Payment of Indenture Trustee [and Securities Insurer]

	
55

 

  

iii

  

 

	  
	
ARTICLE XI

	  
	
MISCELLANEOUS

	  
	
Section 11.01

	
Compliance Certificates and Opinions, Etc

	
55

	
Section 11.02

	
Form of Documents Delivered to Indenture Trustee

	
56

	
Section 11.03

	
Acts of Noteholders

	
57

	
Section 11.04

	
Notices, Etc., to Indenture Trustee, Issuing Entity, Rating Agencies [and Securities Insurer

	
58

	
Section 11.05

	
Notices to Noteholders; Waiver

	
59

	
Section 11.06

	
Conflict With Trust Indenture Act

	
60

	
Section 11.07

	
Effect of Headings and Table of Contents

	
60

	
Section 11.08

	
Successors and Assigns

	
60

	
Section 11.09

	
Separability

	
60

	
Section 11.10

	
Benefits of Indenture

	
60

	
Section 11.11

	
Legal Holidays

	
61

	
Section 11.12

	
Governing Law

	
61

	
Section 11.13

	
Counterparts

	
61

	
Section 11.14

	
Recording of Indenture

	
61

	
Section 11.15

	
Owner Trust Obligation

	
61

	
Section 11.16

	
No Petition

	
61

	
Section 11.17

	
Inspection

	
62

	
Section 11.18

	
[Grant of Noteholder Rights to Securities Insurer

	
62

	
Section 11.19

	
Third Party Beneficiary

	
62

	
Section 11.20

	
Suspension and Termination of Securities Insurer’s Rights

	
62

EXHIBITS

 

EXHIBIT A – Forms of Notes

 

 

 

 

 

 

 

 

  

iv

  

This Indenture entered into effective __________, 20__ (“Indenture”), between __________ HOME LOAN OWNER TRUST 20__-_, a Delaware business trust, as Issuing Entity (the “Issuing Entity”), and ______________________________, as Indenture Trustee (the “Indenture Trustee”),

 

W I T N E S S E T H   T H A T:

 

In consideration of the mutual covenants herein contained, the Issuing Entity and the Indenture Trustee hereby agree as follows for the benefit of each of them and for the equal and ratable benefit of the holders of the Issuing Entity’s Home Loan Asset Backed Notes, Series 20__-_ (the “Notes”) [and __________________ (the “Securities Insurer”)].

 

GRANTING CLAUSE

 

Subject to the terms of this Indenture, the Issuing Entity hereby Grants on the Closing Date, to the Indenture Trustee, as Indenture Trustee for the benefit of the Holders of the Notes [and the Securities Insurer,] all of the Issuing Entity’s right, title and interest in and to:  (i) the Trust Estate (as defined in the Sale and Servicing Agreement); (ii) the Sale and Servicing Agreement (including the Issuing Entity’s right to cause the Transferor to repurchase the Home Loans from the Issuing Entity under certain circumstances described therein); (iii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, property insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing; (iv) all funds on deposit from time to time in the Trust Accounts (including the Certificate Distribution Account); and (v) all other property of the Owner Trust from time to time (collectively, the “Collateral”).

 

The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

 

The Indenture Trustee, as Indenture Trustee on behalf of the Holders of the Notes [and the Securities Insurer,] acknowledges such Grant, accepts the trusts hereunder and agrees to perform its duties required in this Indenture to the best of its ability to the end that the interests of the Holders of the Notes may adequately and effectively be protected.  The Indenture Trustee agrees and acknowledges that possession of the Indenture Trustee’s Home Loan Files will be held by the Custodian for the benefit of the Indenture Trustee in __________________.  The Indenture Trustee further agrees and acknowledges that each other item of Collateral that is physically delivered to the Indenture Trustee will be held on behalf of the Indenture Trustee in __________________.

 

  

  

  

ARTICLE I

 

DEFINITIONS

 

Section 1.01   Definitions.  (a) Except as otherwise specified herein or as the context may otherwise require, the following terms have the respective meanings set forth below for all purposes of this Indenture.  Except as otherwise specified herein or as the context may otherwise require, capitalized terms used but not otherwise defined herein have the respective meanings set forth in the Sale and Servicing Agreement for all purposes of this Indenture.

 

“Act” has the meaning specified in Section 11.03(a) hereof.

 

“Administration Agreement” means the Administration Agreement, dated as of _____________, 20__, among the Administrator, the Issuing Entity and the Company.

 

“Administrator” means _____________________, a _____________________ or any successor Administrator under the Administration Agreement.

 

“Affiliate” means, 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 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 or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.

 

“Authorized Officer” means, with respect to the Issuing Entity, any officer of the Owner Trustee who is authorized to act for the Owner Trustee in matters relating to the Issuing Entity and who is identified on the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and, so long as the Administration Agreement is in effect, any Vice President or more senior officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuing Entity and to be acted upon by the Administrator pursuant to the Administration Agreement and who is identified on the list of Authorized Officers delivered by the Administrator to the Indenture Trustee if the Administrator is not the Indenture Trustee (as such list may be modified or supplemented from time to time thereafter).

 

“Basic Documents” means the Certificate of Owner Trust, the Owner Trust Agreement, this Indenture, the Sale and Servicing Agreement, the Servicing Agreement, the Home Loan Purchase Agreement, the Administration Agreement, the Insurance Agreement, the Indemnification Agreement, the Custodial Agreement, the Note Depository Agreement, the Notes and other documents and certificates delivered in connection herewith or therewith.

 

“Book-Entry Notes” means a beneficial interest in the Notes, ownership and transfers of which shall be made through book entries by a Clearing Agency as described in Section 2.10 hereof.

 

“Business Day” means any day other than (a) a Saturday or Sunday, or (b) a day on which banking institutions are authorized or obligated by law or executive order to be closed 

 

  

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in a city at any of the following locations:  (i) The City of New York, (ii) where the corporate trust office of the Indenture Trustee is located, (iv) where the servicing operations of the Servicer are primarily located or (v) where the master servicing operations of the Master Servicer are primarily located.

 

“Certificate of Owner Trust” means the certificate of trust of the Issuing Entity substantially in the form of Exhibit B to the Owner Trust Agreement.

 

“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act.

 

“Clearing Agency Participant” means a broker, dealer, bank, other financial institution or other Person for which from time to time a Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency.

 

“Closing Date” means _____________, 20__.

 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder.

 

“Collateral” has the meaning specified in the Granting Clause of this Indenture.

 

“Commission” means the Securities and Exchange Commission.

 

“Company” means _______________________, a ________________________, or any successor in interest thereto.

 

“Corporate Trust Office” means the principal office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office at date of execution of this Agreement is located at _____________ _____________, or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Issuing Entity, or the principal corporate trust office of any successor Indenture Trustee at the address designated by such successor Indenture Trustee by notice to the Noteholders and the Issuing Entity.

 

“Default” means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.

 

“Definitive Notes” means the Notes as set forth in Section 2.12 hereof.

 

“Depositor” shall mean [_____________], a [_____________] [_____________], in its capacity as depositor under the Sale and Servicing Agreement, or any successor in interest thereto.

 

“Depository Institution” means any depository institution or trust company, including the Indenture Trustee, that (a) is incorporated under the laws of the United States of America or any State thereof, (b) is subject to supervision and examination by federal or state banking authorities and (c) has outstanding unsecured commercial paper or other short-term 

 

  

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unsecured debt obligations that are rated A-1 by ________ (or comparable ratings if ____ is not the Rating Agency).

 

“DTC” means The Depository Trust Company, a New York corporation, or any successor thereto.

 

“Due Period” means, with respect to any Payment Date, the period commencing on the ________ day of the calendar month immediately preceding the month of such Payment Date and ending on the ________ day of the month in which such Payment Date occurs.

 

“Event of Default” has the meaning specified in Section 5.01 hereof.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Executive Officer” means, with respect to any corporation, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, Executive Vice President, any Vice President, the Secretary or the Treasurer of such corporation; and with respect to any partnership, any general partner thereof.

 

“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create and grant a lien upon and a security interest in and right of set-off against, deposit, set over and confirm pursuant to this Indenture.  A Grant of the Collateral or of any other agreement or instrument shall include all rights, powers and options (but none of the obligations) of the granting party thereunder, including the immediate and continuing right to claim for, collect, receive and give receipt for principal and interest payments in respect of the Collateral and all other moneys payable thereunder, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the granting party or otherwise, and generally to do and receive anything that the granting party is or may be entitled to do or receive thereunder or with respect thereto.

 

“Holder” or “Noteholder” means the Person in whose name a Note is registered on the Note Register.

 

“Indenture Trustee” means _______________, a _______________ as Indenture Trustee under this Indenture, or any successor Indenture Trustee hereunder.

 

“Independent” means, when used with respect to any specified Person, that the Person (a) is in fact independent of the Issuing Entity, any other obligor on the Notes, the Transferor[, the Securities Insurer] and any Affiliate of any of the foregoing Persons, (b) does not have any direct financial interest or any material indirect financial interest in the Issuing Entity, any such other obligor, the Transferor[, the Securities Insurer] or any Affiliate of any of the foregoing Persons and (c) is not connected with the Issuing Entity, any such other obligor, the Transferor[, the Securities Insurer] or any Affiliate of any of the foregoing Persons as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.

 

  

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“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01 hereof, made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of reasonable care, and such opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.

 

[“Insurance Agreement” means the Insurance and Indemnification Agreement, dated as of _____________, 20__, among the Securities Insurer, _____________ , as Transferor and Master Servicer, the Depositor and the Issuing Entity.]

 

“Issuer Order” and “Issuer Request” mean a written order or request signed in the name of the Issuing Entity by any one of its Authorized Officers and delivered to the Indenture Trustee.

 

“Issuing Entity” or “Owner Trust” means _____________ Home Loan Owner Trust 20__-_ until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained herein and required by the TIA, each other obligor on the Notes.

 

 “Majority Noteholders” means until such time as the Note Principal Balance of the Notes has been reduced to zero, the holder or holders of in excess of 50% of the Note Principal Balance of all Notes then Outstanding.

 

“Master Servicer” means _____________ a __________________.

 

“Maturity Date” means, with respect to the Notes, _____________, 20__.

 

“Note” means a _____________ Home Loan Owner Trust 20__-_, Home Loan Asset Backed Note, Series 20__-_.

 

“Note Depository Agreement” means the agreement to be entered into among the Issuing Entity, the Indenture Trustee and The Depository Trust Company, as the initial Clearing Agency, relating to the Book-Entry Notes.

 

“Note Owner” means, with respect to a Book-Entry Note, the Person that is the beneficial owner of such Book-Entry Note, as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency).

 

“Note Register” and “Note Registrar” have the respective meanings specified in Section 2.03 hereof.

 

“Officer’s Certificate” means a certificate signed by any Authorized Officer of the Issuing Entity or, if authorized under the Administration Agreement, the Administrator or the Master Servicer on behalf of the Issuing Entity, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01 hereof, and delivered to the Indenture Trustee.  Unless otherwise specified, any reference in this Indenture to an Officer’s 

 

  

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Certificate shall be to an Officer’s Certificate of any Authorized Officer of the Issuing Entity or, if authorized under the Administration Agreement, the Administrator.

 

“Opinion Of Counsel” means one or more written opinions of counsel who may, except as otherwise expressly provided in this Indenture, be an employee of or counsel to the party required to provide such opinion or opinions and, in each such case, who shall be satisfactory to the Indenture Trustee [and the Securities Insurer], and which opinion or opinions shall be addressed to the Indenture Trustee, as Indenture Trustee, [and the Securities Insurer] and shall comply with any applicable requirements of Section 11.01 hereof and shall be in form and substance satisfactory to the Indenture Trustee [and the Securities Insurer].

 

“Outstanding” means, with respect to any Note and as of the date of determination, any Note theretofore authenticated and delivered under this Indenture except:

 

(i)           Notes theretofore cancelled by the Note Registrar or delivered to the Note Registrar for cancellation;

 

(ii)          Notes or portions thereof the payment for which money in the necessary amount has theretofore been deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision for such notice satisfactory to the Indenture Trustee has been made);

 

(iii)         Notes in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser; provided, however, that in determining whether the Holders of the requisite percentage of Outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any Basic Document, Notes owned by the Issuing Entity, any other obligor upon the Notes, the Transferor or any Affiliate of any of the foregoing Persons shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that the Indenture Trustee knows to be owned in such manner shall be disregarded.  Notes owned in such manner that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee that the pledgee has the right so to act with respect to such Notes and that the pledgee is not the Issuing Entity, any other obligor upon the Notes, the Transferor or any Affiliate of any of the foregoing Persons; and

 

(iv)         Notes for which the related Maturity Date has occurred;

 

[provided, that Notes that have been paid with funds provided under the Guaranty Policy shall be deemed to be Outstanding until the Securities Insurer has been reimbursed with respect thereto as evidenced by a written notice from the Securities Insurer delivered to the Indenture Trustee, and the Securities Insurer shall be deemed to the Holder thereof to the extent of any payments made by the Securities Insurer.]

 

  

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“Outstanding Amount” means the aggregate principal amount of the Notes, Outstanding at the date of determination.

 

“Owner Trust Agreement” means the Owner Trust Agreement, dated as of _____________ , 20__, among [_______________________________________], as Depositor, the Company, _____________, as Owner Trustee, and __________________________, as Paying Agent.

 

“Owner Trustee” means __________________________, not in its individual capacity but solely as Owner Trustee under the Owner Trust Agreement, or any successor Owner Trustee under the Owner Trust Agreement.

 

“Paying Agent” means the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 hereof and is authorized by the Issuing Entity to make payments to and payments from the Note Payment Account, including payment of principal of or interest on the Notes on behalf of the Issuing Entity.

 

“Payment Date” means the ____ day of any month or if such ____ day is not a Business Day, the first Business Day immediately following such day, commencing in _______ 20__.

 

“Person” means any individual, corporation, estate, partnership, joint venture, association, joint stock company, trust (including any beneficiary thereof), unincorporated organization, limited liability company, limited liability partnership or government or any agency or political subdivision thereof.

 

“Predecessor Note” means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.04 hereof in lieu of a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

 

“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.

 

“Rating Agency” means either or both of (i) ________  or (ii) ________.  If no such organization or successor thereto is any longer in existence, “Rating Agency” shall be a nationally recognized statistical rating organization or other comparable Person designated by the Master Servicer [and approved by the Securities Insurer], notice of which designation shall have been given to the Indenture Trustee[, the Securities Insurer], the Servicer and the Issuing Entity.

 

“Rating Agency Condition” means, with respect to any action to which a Rating Agency Condition applies, that each Rating Agency shall have been given 10 days (or such shorter period as is acceptable to each Rating Agency) prior notice thereof and that each of the Depositor, the Servicer, the Master Servicer[, the Securities Insurer], the Owner Trustee and the Issuing Entity shall have been notified by the Rating Agencies in writing that such action will not 

 

  

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result in a reduction, withdrawal or qualification of the then current internal ratings assigned to the Notes by each of the Rating Agencies [without respect to the Securities Insurer.

 

“Record Date” means, as to each Payment Date, the ____ Business Day of the month immediately preceding the month in which such Payment Date occurs.

 

“Redemption Date” means in the case of a redemption of the Notes pursuant to Section 10.01 hereof, the Payment Date specified by the Master Servicer or the Issuing Entity pursuant to such Section 10.01.

 

“Registered Holder” means the Person in the name of which a Note is registered on the Note Register on the applicable Record Date.

 

“Residual Interest Certificate” has the meaning assigned to such term in Section 1.1 of the Owner Trust Agreement.

 

“Responsible Officer” means, with respect to the Indenture Trustee, any officer within the Corporate Trust Office of the Indenture Trustee, including any Vice President, Assistant Vice President, Assistant Treasurer, Assistant Secretary 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 matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.

 

“Sale and Servicing Agreement” means the Sale and Master Servicing Agreement dated as of _____________, 20__, among the Issuing Entity, the Depositor, the Transferor and Master Servicer and ______________________, as Indenture Trustee.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Securities Insurer” means _____________, a __________________________.

 

“Servicer” shall mean _______________, a ___________________, in its capacity as servicer under the Servicing Agreement, and any successor Servicer thereunder.

 

“Servicing Agreement” shall mean the Servicing Agreement [which incorporates by reference the Agreement Regarding Standard Servicing Terms, each] dated as of _____________, 20__, between _____________ and the Servicer.

 

“State” means any one of the States of the United States of America or the District of Columbia.

 

“Transferor” means _______________________, a_______________________.

 

“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 as in force on the date hereof, unless otherwise specifically provided.

 

  

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“UCC” means, unless the context otherwise requires, the Uniform Commercial Code as in effect in the relevant jurisdiction, as amended from time to time.

 

Section 1.02   Incorporation by Reference of Trust Indenture Act.

 

(a)           Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture.  The following TIA terms used in this Indenture have the following meanings:

 

“Indenture Securities” means the Notes.

 

“Indenture Security Holder” means a Noteholder.

 

“Indenture To Be Qualified” means this Indenture.

 

“Indenture Trustee” or “Institutional Trustee” means the Indenture Trustee.

 

“Obligor” on the indenture securities means the Issuing Entity and any other obligor on the indenture securities.

 

(b)           All other TIA terms used in this Indenture that are defined in the TIA, defined by TIA reference to another statute or defined by rule of the Securities and Exchange Commission have the respective meanings assigned to them by such definitions.

 

Section 1.03   Rules of Construction.  Unless the context otherwise requires:

 

(i)           a term has the meaning assigned to it;

 

(ii)          an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as in effect in the United States from time to time;

 

(iii)         “or” is not exclusive;

 

(iv)         “including” means including without limitation;

 

(v)          words in the singular include the plural and words in the plural include the singular; and

 

(vi)         any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented (as provided in such agreements) and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns.

 

  

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ARTICLE II

 

THE NOTES

 

Section 2.01   Form.  The Notes shall be designated as the “_____________ Home Loan Owner Trust 20__-_ Home Loan Asset Backed Notes, Series 20__-_”.  Each Note shall be in substantially the form set forth in EXHIBIT A hereto, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution thereof.  Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.

 

The Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods, all as determined by the officers executing such Notes, as evidenced by their execution of such Notes.

 

Each Note shall be dated the date of its authentication.  The terms of the Notes are set forth in EXHIBIT A hereto.  The terms of each Note are part of the terms of this Indenture.

 

Section 2.02   Execution, Authentication, Delivery and Dating.  The Notes shall be executed on behalf of the Issuing Entity by an Authorized Officer of the Owner Trustee or the Administrator.  The signature of any such Authorized Officer on the Notes may be manual or facsimile.

 

Notes bearing the manual or facsimile signature of individuals who were at any time Authorized Officers of the Owner Trustee or the Administrator shall bind the Issuing Entity, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Notes or did not hold such offices at the date of such Notes.

 

Subject to the satisfaction of the conditions set forth in Section 2.08 hereof, the Indenture Trustee shall upon Issuer Order authenticate and deliver the Notes for original issue in the following principal amount:  $__________.  The aggregate principal of the Notes Outstanding at any time may not exceed such amount.

 

The Notes that are authenticated and delivered by the Indenture Trustee to or upon the order of the Issuing Entity on the Closing Date shall be dated __________, 20__.  All other Notes that are authenticated after the Closing Date for any other purpose under the Indenture shall be dated the date of their authentication.  The Notes shall be issuable as registered Notes in the minimum denomination of $25,000 initial principal amount and integral multiples of $1,000 in excess thereof; provided however, that any Note may be issued in such denominations as may be necessary to represent the remainder of the aggregate principal amount of the Notes.

 

No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual 

 

  

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signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.

 

Section 2.03   Registration; Registration of Transfer and Exchange.  The Issuing Entity shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuing Entity shall provide for the registration of Notes and the registration of transfers of Notes.  The Indenture Trustee initially shall be the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided.  Upon any resignation of any Note Registrar, the Issuing Entity shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of Note Registrar.

 

If a Person other than the Indenture Trustee is appointed by the Issuing Entity as Note Registrar, the Issuing Entity will give the Indenture Trustee [and the Securities Insurer] prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee [and the Securities Insurer] shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee [and the Securities Insurer] shall have the right to rely upon a certificate executed on behalf of the Note Registrar by an Executive Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and number of such Notes.

 

Upon surrender for registration of transfer of any Note at the office or agency of the Issuing Entity to be maintained as provided in Section 3.02 hereof, the Issuing Entity shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, in the name of the designated transferee or transferees, one or more new Notes in any authorized denominations, of a like aggregate principal amount.

 

At the option of the Holder, Notes may be exchanged for other Notes in any authorized denominations, of a like aggregate principal amount upon surrender of the Notes to be exchanged at such office or agency.  Whenever any Notes are so surrendered for exchange, the Issuing Entity shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes which the Noteholder making the exchange is entitled to receive.

 

All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the Issuing Entity, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange.

 

Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Holder thereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agents’ Medallion Program (“Stamp”) or such other 

 

  

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“signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act.

 

No service charge shall be made to a Holder [or the Securities Insurer] for any registration of transfer or exchange of Notes, but the Issuing Entity may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 9.06 hereof not involving any transfer.

 

The preceding provisions of this Section 2.03 notwithstanding, the Issuing Entity shall not be required to make, and the Note Registrar need not register, transfers or exchanges of Notes selected for redemption or of any Note for a period of 15 days preceding the due date for any payment with respect to such Note.

 

Section 2.04   Mutilated, Destroyed, Lost or Stolen Notes.  If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Indenture Trustee [and the Securities Insurer] such security or indemnity as may reasonably be required by them to hold the Issuing Entity[, the Securities Insurer] and the Indenture Trustee harmless, then, in the absence of notice to the Issuing Entity, the Note Registrar or the Indenture Trustee that such Note has been acquired by a bona fide purchaser, an Authorized Officer of the Owner Trustee or the Administrator on behalf of the Issuing Entity shall execute, and upon its request the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Note, a replacement Note; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuing Entity may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof.  If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuing Entity[, the Securities Insurer] and the Indenture Trustee shall be entitled to recover such replacement Note (or such payment) from the Person to which it was delivered or any Person taking such replacement Note from such Person to which such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuing Entity[, the Securities Insurer] or the Indenture Trustee in connection therewith.

 

Upon the issuance of any replacement Note under this Section 2.04, the Issuing Entity may require the payment by the Holder of such Note of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Indenture Trustee) connected therewith.

 

Every replacement Note issued pursuant to this Section 2.04 in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuing Entity, whether or not the mutilated, destroyed, lost or stolen Note shall 

 

  

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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 2.04 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

 

Section 2.05   Persons Deemed Note Owners.  Prior to due presentment for registration of transfer of any Note, the Issuing Entity[, the Securities Insurer], the Indenture Trustee and any agent of the Issuing Entity[, the Securities Insurer] or the Indenture Trustee may treat the Person in the name of which any Note is registered (as of the day of determination) as the Note Owner for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuing Entity[, the Securities Insurer], the Indenture Trustee or any agent of the Issuing Entity[, the Securities Insurer] or the Indenture Trustee shall be affected by notice to the contrary.

 

Section 2.06   Payment of Principal and/or Interest; Defaulted Interest.

 

(a)           Each Note shall accrue interest at the Note Interest Rate, and such interest shall be payable on each Payment Date as specified in EXHIBIT A hereto, subject to Section 3.01 hereof.  Any installment of interest or principal, if any, payable on any Note that is punctually paid or duly provided for by the Issuing Entity on the applicable Payment Date shall be paid to the Person in the name of which such Note (or one or more Predecessor Notes) is registered on the Record Date by check mailed first-class postage prepaid to such Person’s address as it appears on the Note Register on such Record Date, except that, unless Definitive Notes have been issued pursuant to Section 2.12 hereof, with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payment will be made by wire transfer in immediately available funds to the account designated by such nominee and except for the final installment of principal payable with respect to such Note on a Payment Date or on the Maturity Date (and except for the Termination Price for any Note called for redemption pursuant to Section 10.01 hereof), which shall be payable as provided in Section 2.06(B) below.  The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03 hereof.

 

(b)           The principal of each Note shall be payable in installments on each Payment Date as provided in the form of Note set forth in EXHIBIT A hereto.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable, if not previously paid, on the earlier of (i) the Maturity Date, (ii) the Redemption Date or (iii) the date on which an Event of Default shall have occurred and be continuing, if the Indenture Trustee or the Majority Noteholders [or the Securities Insurer] shall have declared the Notes to be immediately due and payable in the manner provided; however, that if on the date any such Event of Default occurs[, no Securities Insurer Default exists and is continuing, the Securities Insurer,] in its sole discretion, may determine whether or not to accelerate payment on the Notes.

 

All principal payments on the Notes shall be made pro rata to the Noteholders.  The Indenture Trustee shall notify the Person in the name of which a Note is registered at the 

 

  

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close of business on the Record Date preceding the Payment Date on which the Issuing Entity expects that the final installment of principal of and interest on such Note will be paid.  Such notice shall be mailed or transmitted by facsimile prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment.  [A copy of such form of notice shall be sent to the Securities Insurer by the Indenture Trustee.] Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02 hereof.  [Promptly following the date on which all principal of and interest on the Notes has been paid in full and the Notes have been surrendered to the Indenture Trustee, the Indenture Trustee shall, if the Securities Insurer has paid any amount in respect of the Notes under the Guaranty Policy that has not been reimbursed to the Securities Insurer, deliver such surrendered Notes to the Securities Insurer.]

 

Section 2.07   Cancellation.  All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall promptly be cancelled by the Indenture Trustee.  The Issuing Entity may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuing Entity may have acquired in any manner whatsoever, and all Notes so delivered shall promptly be cancelled by the Indenture Trustee.  No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.07, except as expressly permitted by this Indenture.  All canceled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuing Entity shall direct by an Issuer Order that they be destroyed or returned to it; provided, however, that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee.

 

Section 2.08   Conditions Precedent to the Authentication of the Notes.  The Notes may be authenticated by the Indenture Trustee, upon Issuer Request and upon receipt by the Indenture Trustee of the following:

 

(a)           An Issuer Order authorizing the execution and authentication of such Notes by the Issuing Entity.

 

(b)           All of the items of Collateral which shall be delivered to the Indenture Trustee or its designee.

 

(c)           An executed counterpart of the Owner Trust Agreement.

 

(d)           An Opinion of Counsel addressed to the Indenture Trustee [and the Securities Insurer] to the effect that:

 

(i)           the Owner Trustee has full power, authority and legal right to execute, deliver and perform its obligations under the Trust Agreement and to consummate the transactions contemplated thereby;

 

(ii)           the Issuing Entity has been duly formed, is validly existing as a business trust under the Business Trust Statute and has power and authority to execute, deliver, issue, and perform, as applicable, this Indenture, the Administration Agreement, the Sale 

 

  

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and Servicing Agreement, [the Insurance Agreement,] the Indemnification Agreement, the Custodial Agreement and the Note Depository Agreement and to consummate the transactions contemplated thereby;

 

(iii)           assuming due authorization, execution and delivery hereof by each party thereto, Indenture is the valid, legal and binding agreement of the Issuing Entity, enforceable against the Issuing Entity in accordance with its terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, receivership or other laws relating to the creditors’ rights generally and to general principles of equity including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding in equity or at law) and except that the enforcement of rights with respect to indemnification and contribution obligations may be limited by applicable law;

 

(iv)          upon due authorization, execution and delivery of this Indenture by each party hereto, and due execution, authentication, and delivery of the Notes, such Notes will be legal, valid and binding obligations of the Issuing Entity, enforceable against the Issuing Entity in accordance with their terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium, receivership or other laws relating to creditors’ rights generally, and to general principles of equity including principles of commercial reasonableness, good faith and fair dealing (regardless of whether enforcement is sought in a proceeding at law or in equity), and will be validly issued and outstanding and entitled to the benefits of the Indenture;

 

(v)           the conditions precedent to the authentication and delivery of the Bonds as set forth in this Indenture have been complied with;

 

(vi)          on the Closing Date, the Issuing Entity shall cause to be furnished to the Indenture Trustee [and the Securities Insurer] an Opinion of Counsel either stating that, in the opinion of such counsel, this Indenture has been properly recorded and filed so as to make effective the lien intended to be created thereby, and reciting the details of such action, or stating that, in the opinion of such counsel, no such action is necessary to make such lien effective; and

 

(vii)         any other matters as the Indenture Trustee may reasonably request;

 

(e)           An Officer’s Certificate complying with the requirements of Section 11.01 hereof and stating that:

 

(i)           the Issuing Entity is not in Default under this Indenture and the issuance of the Notes applied for will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, the Owner Trust Agreement, any indenture, mortgage, deed of trust or other agreement or instrument to which the Issuing Entity 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 Issuing Entity 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 

 

  

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relating to the authentication and delivery of the Notes applied for have been complied with;

 

(ii)           the Issuing Entity is the owner of the all of the Home Loans, has not assigned any interest or participation in the Home Loans (or, if any such interest or participation has been assigned, it has been released) and has the right to Grant all of the Home Loans to the Indenture Trustee;

 

(iii)           the Issuing Entity has Granted to the Indenture Trustee all of its right, title and interest in and to the Collateral, and has delivered or caused the same to be delivered to the Indenture Trustee;

 

(iv)           letters signed by the Rating Agencies confirming that the Notes have been rated “___” by __________ and “___” by __________ have been delivered to the Indenture Trustee;

 

(v)           all conditions precedent provided for in this Indenture relating to the authentication of the Notes have been complied with; and

 

(f)           A fair value certificate from __________ with respect to the Home Loans.

 

Section 2.09   Release of Collateral.

 

(a)           Except as otherwise provided in subsections (b) and (c) of this Section 2.09, Section 11.01 hereof and the terms of the Basic Documents, the Indenture Trustee shall release property from the lien of this Indenture only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates.

 

(b)           The Servicer, on behalf of the Issuing Entity, shall be entitled to obtain a release from the lien of this Indenture for any Home Loan and the related Mortgaged Property at any time (i) after a payment by the Transferor or the Issuing Entity of the Purchase Price of the Home Loan, (ii) after a Qualified Substitute Home Loan is substituted for such Home Loan and payment of the Substitution Adjustment, if any, (iii) after liquidation of the Home Loan in accordance with Section 4.11 of the Sale and Servicing Agreement and the deposit of all Recoveries thereon in the Collection Account, or (iv) upon the termination of a Home Loan (due to, among other causes, a prepayment in full of the Home Loan and sale or other disposition of the related Mortgaged Property), if the Issuing Entity delivers to the Indenture Trustee an Issuer Request (A) identifying the Home Loan and the related Mortgaged Property to be released, (B) requesting the release thereof, (C) setting forth the amount deposited in the Collection Account with respect thereto, and (D) certifying that the amount deposited in the Collection Account (x) equals the Purchase Price of the Home Loan, in the event a Home Loan and the related Mortgaged Property are being released from the lien of this Indenture pursuant to item (i) above, (y) equals the Substitution Adjustment related to the Qualified Substitute Home Loan and the Deleted Home Loan released from the lien of the Indenture pursuant to item (ii) above, or (z) equals the entire amount of Recoveries received with respect to such Home Loan and the 

 

  

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related Mortgaged Property in the event of a release from the lien of this Indenture pursuant to items (iii) or (iv) above.

 

(c)           The Indenture Trustee shall, if requested by the Servicer, temporarily release or cause the Custodian temporarily to release to the Servicer the Indenture Trustee’s Home Loan File pursuant to the provisions of Section 7.02 of the Sale and Servicing Agreement upon compliance by the Servicer with the provisions thereof; provided, however, that the Indenture Trustee’s Home Loan File shall have been stamped to signify the Issuing Entity’s pledge to the Indenture Trustee under the Indenture.

 

Section 2.10   Book-Entry Notes.  The Notes, when authorized by an Issuer Order, will be issued in the form of typewritten Notes representing the Book-Entry Notes, to be delivered to The Depository Trust Company, the initial Clearing Agency, by or on behalf of the Issuing Entity.  The Book-Entry Notes shall be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner will receive a definitive Note representing such Note Owner’s interest in such Note, except as provided in Section 2.12 hereof.  Unless and until definitive, fully registered Notes (the “Definitive Notes”) have been issued to such Note Owners pursuant to Section 2.12 hereof:

 

(i)           the provisions of this Section 2.10 shall be in full force and effect;

 

(ii)          the Note Registrar, the Indenture Trustee [and the Securities Insurer] shall be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on the Notes and the giving of instructions or directions hereunder) as the sole Holder of the Notes, and shall have no obligation to the Note Owners;

 

(iii)         to the extent that the provisions of this Section 2.10 conflict with any other provisions of this Indenture, the provisions of this Section 2.10 shall control;

 

(iv)         the rights of Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency and/or the Clearing Agency Participants pursuant to the Note Depository Agreement.  Unless and until Definitive Notes are issued pursuant to Section 2.12 hereof, the initial Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on the Notes to such Clearing Agency Participants; and

 

(v)          whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Holders of Notes evidencing a specified percentage of the Outstanding Notes, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee.

 

Section 2.11   Notices to Clearing Agency.  Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive 

 

  

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Notes shall have been issued to such Note Owners pursuant to Section 2.12 hereof, the Indenture Trustee shall give all such notices and communications specified herein to be given to Holders of the Notes to the Clearing Agency and shall have no obligation to such Note Owners.

 

Section 2.12   Definitive Notes.

 

If (i) the Administrator advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Notes and the Administrator is unable to locate a qualified successor, (ii) the Administrator at its option advises the Indenture Trustee in writing that it elects to terminate the book-entry system through the Clearing Agency or (iii) after the occurrence of an Event of Default, Owners of the Book-Entry Notes representing beneficial interests aggregating at least a majority of the Outstanding Notes advise the Clearing Agency in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of such Note Owners, then the Clearing Agency shall notify all Note Owners[, the Securities Insurer] and the Indenture Trustee of the occurrence of such event and of the availability of Definitive Notes to Note Owners requesting the same.  Upon surrender to the Indenture Trustee of the typewritten Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuing Entity shall execute and the Indenture Trustee shall authenticate the Definitive Notes in accordance with the instructions of the Clearing Agency.  None of the Issuing Entity, the Note Registrar[, the Securities Insurer] or the Indenture Trustee shall be liable for any delay in delivery of such instructions and each of them may conclusively rely on, and shall be protected in relying on, such instructions.  Upon the issuance of Definitive Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes as Noteholders.

 

Section 2.13   Tax Treatment.  The Issuing Entity has entered into this Indenture, and the Notes will be issued, with the intention that for all purposes, including federal, state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the Issuing Entity secured by the Collateral.  The Issuing Entity, by entering into this Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance of an interest in the applicable Book-Entry Note), agree to treat the Notes for all purposes, including federal, state and local income, single business and franchise tax purposes, as indebtedness of the Issuing Entity.

 

ARTICLE III

 

COVENANTS

 

Section 3.01   Payment of Principal and/or Interest.  The Issuing Entity will duly and punctually pay (or will cause to be paid duly and punctually) the principal of and interest on the Notes in accordance with the terms of the Notes and this Indenture.  Without limiting the foregoing, subject to and in accordance with Section 8.02(C) hereof, the Issuing Entity will cause to be paid to the Noteholders all amounts on deposit in the Note Payment Account on each Payment Date deposited therein pursuant to the Sale and Servicing Agreement (less any amounts representing income from Permitted Investments) for the benefit of the Notes.  Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuing Entity [or the Securities Insurer, 

 

  

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as applicable,] to such Noteholder for all purposes of this Indenture.  The Notes shall be non-recourse obligations of the Issuing Entity and shall be limited in right of payment to amounts available from the Collateral [and any amounts received by the Indenture Trustee under the Guaranty Policy in respect of the Notes,] as provided in this Indenture.  The Issuing Entity shall not otherwise be liable for payments on the Notes.  If any other provision of this Indenture shall be deemed to conflict with the provisions of this Section 3.01, the provisions of this Section 3.01 shall control.

 

Section 3.02   Maintenance of Office or Agency.  The Issuing Entity will or will cause the Administrator to maintain in the Borough of Manhattan in The City of New York or in __________ an office or agency where Notes may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Issuing Entity in respect of the Notes and this Indenture may be served.  The Issuing Entity hereby initially appoints the Administrator to serve as its agent for the foregoing purposes and to serve as Paying Agent with respect to the Notes and the Certificates.  The Issuing Entity will give prompt written notice to the Indenture Trustee [and the Securities Insurer] of the location, and of any change in the location, of any such office or agency.  If at any time the Issuing Entity shall fail to maintain any such office or agency or shall fail to furnish the Indenture Trustee with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Issuing Entity hereby appoints the Indenture Trustee as its agent to receive all such surrenders, notices and demands.

 

Section 3.03   Money for Payments to Be Held in Trust.  As provided in Section 8.02(A) and (b) hereof, all payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the Note Payment Account pursuant to Section 8.02(C) hereof shall be made on behalf of the Issuing Entity by the Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the Note Payment Account for payments of Notes shall be paid over to the Issuing Entity except as provided in this Section 3.03.

 

On or before the __________ Business Day preceding each Payment Date and the Redemption Date, the Paying Agent shall deposit or cause to be deposited in the Note Payment Account an aggregate sum sufficient to pay the amounts due on such Payment Date or the Redemption Date under the Notes, such sum to be held in trust for the benefit of the Persons entitled thereto, and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee [and the Securities Insurer] of its action or failure so to act.

 

Any Paying Agent shall be appointed by Issuer Order with written notice thereof to the Indenture Trustee [and the Securities Insurer].  Any Paying Agent appointed by the Issuing Entity shall be a Person which would be eligible to be Indenture Trustee hereunder as provided in Section 6.11 hereof.  The Issuing Entity shall not appoint any Paying Agent (other than the Indenture Trustee) which is not, at the time of such appointment, a Depository Institution.

 

The Issuing Entity will cause each Paying Agent other than the Administrator or the Indenture Trustee to execute and deliver to the Indenture Trustee [and the Securities Insurer] an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the 

 

  

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Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:

 

(i)           hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;

 

(ii)          give the Indenture Trustee [and the Securities Insurer] notice of any default by the Issuing Entity (or any other obligor upon the Notes) of which it has actual knowledge in the making of any payment required to be made with respect to the Notes;

 

(iii)         at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;

 

(iv)         immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment; and

 

(v)          comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith; provided, however, that with respect to withholding and reporting requirements applicable to original issue discount (if any) on the Notes, the Issuing Entity shall have first provided the calculations pertaining thereto to the Indenture Trustee.

 

The Issuing Entity may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, by Issuer Order direct any Paying Agent to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such money.

 

Subject to applicable laws with respect to escheat of funds or abandoned property, any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to either (i) the Issuing Entity on Issuer Request [and with the prior written consent of the Securities Insurer as long as no Securities Insurer Default has occurred and is continuing] [or (ii) if such money or a portion thereof was paid by the Securities Insurer to the Indenture Trustee for the payment of principal of or interest on such Note, to the Securities Insurer in lieu of the Issuing Entity to the extent of such unreimbursed amount; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuing Entity for payment thereof (but only to the extent of the amounts so paid to the Issuing Entity), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease]; provided, however, 

 

  

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that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense and direction of the Issuing Entity cause to be published, once in a newspaper of general circulation in The City of New York customarily published in the English language on each Business Day, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication, any unclaimed balance of such money then remaining will be repaid to the Issuing Entity [or the Securities Insurer, as applicable].  The Indenture Trustee shall also adopt and employ, at the expense and direction of the Issuing Entity, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Holder).

 

Section 3.04   Existence.

 

(a)           Subject to subparagraph (b) of this Section 3.04, the Issuing Entity will keep in full effect its existence, rights and franchises as a business trust under the laws of the State of Delaware [(unless, subject to the prior written consent of the Securities Insurer, it becomes, or any successor Issuing Entity hereunder is or becomes, organized under the laws of any other State or of the United States of America, in which case the Issuing Entity will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction)] and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes and the Collateral.

 

(b)           Any successor to the Owner Trustee appointed pursuant to Section 10.2 of the Owner Trust Agreement shall be the successor Owner Trustee under this Indenture without the execution or filing of any paper, instrument or further act to be done on the part of the parties hereto.

 

(c)           Upon any consolidation or merger of or other succession to the Owner Trustee, the Person succeeding to the Owner Trustee under the Owner Trust Agreement may exercise every right and power of the Owner Trustee under this Indenture with the same effect as if such Person had been named as the Owner Trustee herein.

 

Section 3.05   Protection of Collateral.  The Issuing Entity will from time to time [and upon the direction of the Securities Insurer] execute and deliver all such reasonable supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:

 

(i)           provide further assurance with respect to the Grant of all or any portion of the Collateral;

 

(ii)          maintain or preserve the lien and security interest (and the priority thereof) of this Indenture or carry out more effectively the purposes hereof;

 

  

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(iii)         perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture;

 

(iv)         enforce any rights with respect to the Collateral; or

 

(v)          preserve and defend title to the Collateral and the rights of the Indenture Trustee, the Noteholders [and the Securities Insurer] in such Collateral against the claims of all persons and parties.

 

The Issuing Entity hereby designates the Administrator, its agent and attorney-in-fact to execute any financing statement, continuation statement or other instrument required to be executed pursuant to this Section 3.05.

 

Section 3.06   Annual Opinions as to Collateral.  On or before July 15th in each calendar year, beginning in 20__, the Issuing Entity shall furnish to the Indenture Trustee [and the Securities Insurer] an Opinion of Counsel either stating that, in the opinion of such counsel, such action has been taken with respect to the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and with respect to the execution and filing of any financing statements and continuation statements as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest.  Such Opinion of Counsel shall also describe the recording, filing, re-recording and refiling of this Indenture, any indentures supplemental hereto and any other requisite documents and the execution and filing of any financing statements and continuation statements that will, in the opinion of such counsel, be required to maintain the lien and security interest of this Indenture until July 15th of the following calendar year.

 

Section 3.07   Performance of Obligations.

 

(a)           The Issuing Entity will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s material covenants or obligations under any instrument or agreement included in the Collateral or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture, the Sale and Servicing Agreement or such other instrument or agreement.

 

(b)           The Issuing Entity may contract with or otherwise obtain the assistance of other Persons (including, without limitation, the Master Servicer and the Administrator under the Administration Agreement) to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee [and the Securities Insurer] in an Officer’s Certificate of the Issuing Entity shall be deemed to be action taken by the Issuing Entity.  Initially, the Issuing Entity has contracted with the Master Servicer and the Administrator to assist the Issuing Entity in performing its duties under this Indenture.  The Administrator must at all times be the same Person as the Indenture Trustee.

 

(c)           The Issuing Entity will punctually perform and observe all of its obligations and agreements contained in this Indenture, in the Basic Documents and in the 

 

  

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instruments and agreements included in the Collateral, including but not limited to (i) filing or causing to be filed all UCC financing statements and continuation statements required to be filed by the terms of this Indenture and the Sale and Servicing Agreement and (ii) recording or causing to be recorded all Mortgages, Assignments of Mortgage, all intervening Assignments of Mortgage and all assumption and modification agreements required to be recorded by the terms of the Sale and Servicing Agreement, in accordance with and within the time periods provided for in this Indenture and/or the Sale and Servicing Agreement, as applicable.  Except as otherwise expressly provided therein, the Issuing Entity shall not waive, amend, modify, supplement or terminate any Basic Document or any provision thereof without the consent of the Indenture Trustee[, the Securities Insurer] and the Holders of at least a majority of the Outstanding Notes.

 

(d)           If the Issuing Entity shall have knowledge of the occurrence of a Master Servicer Event of Default under the Sale and Servicing Agreement, the Issuing Entity shall promptly notify the Indenture Trustee[, the Securities Insurer], the Servicer and the Rating Agencies thereof, and shall specify in such notice the action, if any, the Issuing Entity is taking with respect to such Master Servicer Event of Default.  If such a Master Servicer Event of Default shall arise from the failure of the Master Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Home Loans, the Issuing Entity shall take all reasonable steps available to it to enforce the obligations of the Master Servicer thereunder.

 

(e)           Without derogating from the absolute nature of the assignment granted to the Indenture Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuing Entity agrees (i) that it will not, without the prior written consent of the Indenture Trustee [and, if a Securities Insurer Default has not occurred and is not continuing, the Securities Insurer,] amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of any Collateral (except to the extent otherwise provided in the Sale and Servicing Agreement) or the Basic Documents, or waive timely performance or observance by the Servicer, the Master Servicer or the Depositor under the Sale and Servicing Agreement; and (ii) that any such amendment shall not (A) increase or reduce in any manner the amount of, or accelerate or delay the timing of, payments that are required to be made for the benefit of the Noteholders or (B) reduce the aforesaid percentage of the Outstanding Notes that is required to consent to any such amendment, without the consent of the Holders of all Outstanding Notes.  If any such amendment, modification, supplement or waiver shall so be consented to by the Indenture Trustee [and, if a Securities Insurer Default has not occurred and is not continuing, the Securities Insurer], the Issuing Entity agrees, promptly following a request by the Indenture Trustee [or the Securities Insurer] to do so, to execute and deliver, in its own name and at its own expense, such agreements, instruments, consents and other documents as the Indenture Trustee may deem necessary or appropriate in the circumstances.

 

Section 3.08   Negative Covenants.  So long as any Notes are Outstanding, the Issuing Entity shall not:

 

(i)           except as expressly permitted by this Indenture or the Sale and Servicing Agreement, sell, transfer, exchange or otherwise dispose of any of the properties or assets 

 

  

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of the Issuing Entity, including those included in the Collateral, unless directed to do so by the Indenture Trustee [acting at the direction of the Securities Insurer, unless a Securities Insurer Default has occurred and is continuing, or the Securities Insurer];

 

(ii)           claim any credit on, or make any deduction from the principal or interest payable in respect of, the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Collateral;

 

(iii)          engage in any business or activity other than as permitted by the Owner Trust Agreement or other than in connection with, or relating to, the issuance of Notes pursuant to this Indenture, or amend the Owner Trust Agreement as in effect on the Closing Date other than in accordance with Section 11.1 thereof;

 

(iv)          issue debt obligations under any other indenture;

 

(v)           incur or assume any indebtedness or guaranty any indebtedness of any Person, except for such indebtedness as may be incurred by the Issuing Entity in connection with the issuance of the Notes pursuant to this Indenture;

 

(vi)          dissolve or liquidate in whole or in part or merge or consolidate with any other Person;

 

(vii)         (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien of this Indenture to be amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations with respect to the Notes under this Indenture except as may expressly be permitted hereby, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Collateral or any part thereof or any interest therein or the proceeds thereof (other than tax liens, mechanics’ liens and other liens that arise by operation of law, in each case on any of the Mortgaged Properties and arising solely as a result of an action or omission of the related Obligors or (C) permit the lien of this Indenture not to constitute a valid first priority (other than with respect to such tax, mechanics’ or other lien) security interest in the Collateral;

 

(viii)        remove the Administrator without cause unless the Rating Agency Condition shall have been satisfied in connection with such removal; or

 

(ix)           take any other action or fail to take any action which may cause the Issuing Entity to be taxable as (a) an association pursuant to Section 7701 of the Code and the corresponding regulations or (b) as a taxable mortgage pool pursuant to Section 7701(i) of the Code and the corresponding regulations.

 

Section 3.09   Annual Statement as to Compliance.  The Issuing Entity will deliver to the Indenture Trustee [and the Securities Insurer], within 120 days after the end of each fiscal year of the Issuing Entity (commencing in the fiscal year 20__), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:

 

  

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(i)           a review of the activities of the Issuing Entity during such year and of its performance under this Indenture has been made under such Authorized Officer’s supervision; and

 

(ii)          to the best of such Authorized Officer’s knowledge, based on such review, the Issuing Entity has complied with all conditions and covenants under this Indenture throughout such year, or, if there has been a default in its compliance with any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.

 

Section 3.10   Covenants of the Issuing Entity.  All covenants of the Issuing Entity in this Indenture are covenants of the Issuing Entity and are not covenants of the Owner Trustee.  The Owner Trustee is, and any successor Owner Trustee under the Owner Trust Agreement will be, entering into this Indenture solely as Owner Trustee under the Owner Trust Agreement and not in its respective individual capacity, and in no case whatsoever shall the Owner Trustee or any such successor Owner Trustee be personally liable on, or for any loss in respect of, any of the statements, representations, warranties or obligations of the Issuing Entity hereunder, as to all of which the parties hereto agree to look solely to the property of the Issuing Entity.

 

Section 3.11   Restricted Payments.  The Issuing Entity shall not, directly or indirectly, (i) pay any dividend or make any payment (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 Issuing Entity or otherwise with respect to any ownership or equity interest or security in or of the Issuing Entity or to the Servicer or Master Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuing Entity may make, or cause to be made, payments to the Servicer, the Master Servicer, the Indenture Trustee, the Owner Trustee, [the Securities Insurer,] the Noteholders and the holders of the Residual Interest Certificate as contemplated by Section 8.02(C) hereof, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement or the Owner Trust Agreement.  The Issuing Entity will not, directly or indirectly, make or cause to be made payments to or distributions from the Collection Account except in accordance with this Indenture and the Basic Documents.

 

Section 3.12   Treatment of Notes as Debt for Tax Purposes.  The Issuing Entity shall, and shall cause the Administrator to, treat the Notes as indebtedness for all purposes.

 

Section 3.13   Notice of Events of Default.  The Issuing Entity shall give the Indenture Trustee, [the Securities Insurer,] the Master Servicer, the Depositor and the Rating Agencies prompt written notice of each Event of Default hereunder, each default on the part of the Master Servicer, the Servicer or the Transferor of its obligations under the Sale and Servicing Agreement and each default on the part of the Transferor of its obligations under the Home Loan Purchase Agreement.

 

Section 3.14   Further Instruments and Acts.  Upon request of the Indenture Trustee [or the Securities Insurer], the Issuing Entity will execute and deliver such further 

 

  

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instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.

 

ARTICLE IV

 

SATISFACTION AND DISCHARGE

 

Section 4.01   Satisfaction and Discharge of Indenture.  This Indenture shall cease to be of further effect with respect to the Notes (except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon [including any such right of the Securities Insurer pursuant to Section 2.06(B)] or the proviso to the definition of “Outstanding”, (iv) Sections 3.03, 3.04, 3.05, 3.08 and 3.10 hereof, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 hereof and the obligations of the Indenture Trustee under Section 4.02 hereof) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them), and the Indenture Trustee, on demand of and at the expense of the Issuing Entity, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when all of the following have occurred:

 

(A)           either (1) all Notes theretofore authenticated and delivered (other than (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.04 hereof and (ii) Notes for the payment of which money has theretofore been deposited in trust or segregated and held in trust by the Issuing Entity and thereafter repaid to the Issuing Entity or discharged from such trust, as provided in Section 3.03 hereof) shall have been delivered to the Indenture Trustee for cancellation; or (2) all Notes not theretofore delivered to the Indenture Trustee for cancellation

 

a.           shall have become due and payable, or

 

b.           will become due and payable within one year following the Maturity Date, or

 

c.           are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuing Entity,

 

d.           and the Issuing Entity, in the case of clause a., b.  or c.  above, has irrevocably deposited or caused irrevocably to be deposited with the Indenture Trustee cash or direct obligations of or obligations guaranteed by the United States of America (which will mature prior to the date such amounts are payable), in trust for such purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Trustee for cancellation when due to 

 

  

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the Maturity Date or the Redemption Date (if Notes shall have been called for redemption pursuant to SECTION 10.01 hereof), as the case may be; and

 

(B)           the latest of (a) 18 months after payment in full of all outstanding obligations under the Notes, (b) the payment in full of all unpaid Trust Fees and Expenses [and all sums owing to the Securities Insurer under the Insurance Agreement as confirmed in writing by the Securities Insurer], (c) [the Guaranty Policy is surrendered to the Securities Insurer and (d)] the date on which the Issuing Entity has paid or caused to be paid all other sums payable hereunder by the Issuing Entity; and

 

(C)           the Issuing Entity shall have delivered to the Indenture Trustee [and the Securities Insurer] an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA or the Indenture Trustee) an Independent Certificate from a firm of certified public accountants, each meeting the applicable requirements of Section 11.01(A) hereof and, subject to Section 11.02 hereof, each stating that all conditions precedent herein provided for, relating to the satisfaction and discharge of this Indenture with respect to the Notes, have been complied with.

 

Section 4.02   Application of Trust Money.  All moneys deposited with the Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes[, the Insurance Agreement] and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, [to the Securities Insurer and] to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Indenture Trustee, of all sums due and to become due thereon; but such moneys need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or required by law.

 

Section 4.03   Repayment of Moneys Held by Paying Agent.  In connection with the satisfaction and discharge of this Indenture with respect to the Notes, all moneys then held by any Paying Agent other than the Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon demand of the Issuing Entity, be paid to the Indenture Trustee to be held and applied according to Section 3.03 hereof and thereupon such Paying Agent shall be released from all further liability with respect to such moneys.

 

ARTICLE V

 

REMEDIES

 

Section 5.01   Events of Default.

 

(a)           “Event Of Default,” wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

 

  

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(i)           Notwithstanding that there may be insufficient sums in the Note Payment Account for payment thereof on the related Payment Date, default in the payment of any interest on any Note when the same becomes due and payable, and continuance of such default for a period of five (5) days; or

 

(ii)          Notwithstanding that there may be insufficient sums in the Note Payment Account for payment thereof on the related Payment Date, default in the payment of the principal of or any installment of the principal of any Note (i) when the same becomes due and payable or (ii) on the Maturity Date; or

 

(iii)         default in the observance or performance of any covenant or agreement of the Issuing Entity made in this Indenture (other than a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section specifically dealt with), or any representation or warranty of the Issuing Entity made in this Indenture[, the Insurance Agreement], the Sale and Servicing Agreement or in any certificate or other writing delivered pursuant hereto or in connection herewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuing Entity by the Indenture Trustee [at the direction of the Securities Insurer], or to the Issuing Entity and the Indenture Trustee by the Holders of at least [25]% of the Outstanding Notes [and with the prior written consent of the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing)], a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of Default hereunder; or

 

(iv)         [an Event of Default under Section 5.01 of the Insurance Agreement or in any certificate or other writing delivered pursuant to the Insurance Agreement or in connection therewith proving to have been incorrect in any material respect as of the time when the same shall have been made, and such default shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of 30 days after there shall have been given, by registered or certified mail, to the Issuing Entity by the Indenture Trustee at the direction of the Securities Insurer, or to the Issuing Entity and the Indenture Trustee by the Holders of at least 25% of the Outstanding Notes and with the prior written consent of the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing), a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of Default hereunder; or]

 

(v)          the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuing Entity or any substantial part of the Collateral in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuing Entity or for any 

 

  

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substantial part of the Collateral, or ordering the winding-up or liquidation of the Issuing Entity’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

 

(vi)         the commencement by the Issuing Entity of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuing Entity to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuing Entity to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuing Entity or for any substantial part of the Collateral, or the making by the Issuing Entity of any general assignment for the benefit of creditors, or the failure by the Issuing Entity generally to pay its debts as such debts become due, or the taking of any action by the Issuing Entity in furtherance of any of the foregoing.

 

The Issuing Entity shall promptly deliver to the Indenture Trustee [and the Securities Insurer] written notice in the form of an Officer’s Certificate of any event which with the giving of notice and the lapse of time would become an Event of Default under clauses (iii) and (iv) above, the status of such event and what action the Issuing Entity is taking or proposes to take with respect thereto.

 

Section 5.02   Acceleration of Maturity; Rescission and Annulment.  If an Event of Default shall occur [and a Securities Insurer Default has occurred and is continuing] then and in every such case the Indenture Trustee may or the Indenture Trustee as directed in writing by the Majority Noteholders shall declare all the Notes to be then immediately due and payable, by a notice in writing to the Issuing Entity (and to the Indenture Trustee if given by Noteholders), and upon any such declaration the Outstanding Amount of such Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable; provided, however, that if on the date any such Event of Default occurs or is continuing, and no Securities Insurer Default exists and is continuing, then the Securities Insurer, in its sole discretion, may determine whether or not to accelerate payment on the Notes].  [In the event of any acceleration of the Notes by operation of this Section 5.02, the Indenture Trustee shall continue to be entitled to make claims under the Guaranty Policy pursuant to Section 8.02(E) hereof.  Payments under the Guaranty Policy following acceleration of the Notes shall be applied by the Indenture Trustee:

 

FIRST:  to the payment of amounts due and unpaid on the Notes in respect of interest, ratably, without preference or priority of any kind;

 

and

 

SECOND:  to the payment of amounts due and unpaid on the Notes in respect of principal, ratably, without preference or priority of any kind, until the Notes are paid in full.]

 

At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the moneys due has been obtained by the Indenture Trustee as hereinafter in this Article V provided, [either the Securities Insurer (so long as a 

 

  

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Securities Insurer Default has not occurred and is continuing) or] the Majority Noteholders [(if a Securities Insurer Default has occurred and is continuing)], by written notice to the Issuing Entity and the Indenture Trustee, may rescind and annul such declaration and its consequences if:

 

(a)           the Issuing Entity has paid or deposited with the Indenture Trustee a sum sufficient to pay:

 

1.           all payments of principal of and/or 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

 

2.           all sums paid or advanced by the Indenture Trustee [or the Securities Insurer] hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee [or the Securities Insurer] and their respective agents and counsel; and

 

(b)           all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12 hereof.  No such rescission shall affect any subsequent default or impair any right consequent thereto.

 

Section 5.03   Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.

 

(a)           The Issuing Entity covenants that if (i) default is made in the payment of any interest on any Note when the same becomes due and payable, and such default continues for a period of five days, or (ii) default is made in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable, the Issuing Entity will, upon demand of the Indenture Trustee [made at the direction of the Securities Insurer,] pay to the Indenture Trustee, for the benefit of the Holders of the Notes [and the Securities Insurer], the whole amount then due and payable on such Notes for principal and/or interest, with interest upon the overdue principal and, to the extent payment at such rate of interest shall be legally enforceable, upon overdue installments of interest at the rate borne by the Notes and in addition thereto such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee [and the Securities Insurer] and their respective agents and counsel.

 

(b)           In case the Issuing Entity shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee may[, with the prior written consent of the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing)] and shall at the direction of [the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing) or] the Majority Noteholders [(if a Securities Insurer Default has occurred and is continuing)] institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuing Entity or other obligor upon such Notes and collect in the manner provided by law out of the property of the Issuing Entity or other obligor upon such Notes, wherever situated, the 

 

  

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moneys adjudged or decreed to be payable.  [At any time, so long as no Securities Insurer Default has occurred and is continuing, if the Securities Insurer is the holder of any Note pursuant to Section 2.06(B) hereof or all amounts due to all other Holders of the Notes pursuant to the Notes and this Indenture have been paid in full, then the Securities Insurer may, in its own name, institute any Proceedings or take any action permitted under this Section 5.03 to collect amounts due hereunder from the Issuing Entity or any other obligor of the Notes.]

 

(c)           If an Event of Default occurs and is continuing, the Indenture Trustee [shall, at the direction of the Securities Insurer, and if a Securities Insurer Default has occurred and is continuing, the Indenture Trustee] may, in its discretion, and shall at the direction of the majority of the Holders of the Outstanding Notes, as more particularly provided in Section 5.04 hereof, proceed to protect and enforce its rights and the rights of [the Securities Insurer and] the Noteholders by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.

 

(d)           In case there shall be pending, relative to the Issuing Entity or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Collateral, Proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuing Entity or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuing Entity or other obligor upon the Notes, or to the creditors or property of the Issuing Entity or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered[, upon the direction of the Securities Insurer,] by intervention in such Proceedings or otherwise:

 

(i)           to file and prove a claim or claims for the whole amount of principal and/or interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee [and the Securities Insurer], and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence or bad faith), [the Securities Insurer] and the Noteholders allowed in such Proceedings;

 

(ii)           unless prohibited by applicable law and regulations, to vote on behalf of the Holders of Notes in any election of a trustee, a standby trustee or Person performing similar functions in any such Proceedings;

 

  

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(iii)          to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders[, the Securities Insurer] and the Indenture Trustee on their behalf; and

 

(iv)          to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee[, the Securities Insurer] or the Holders of Notes allowed in any judicial proceedings relative to the Issuing Entity, its creditors and its property; and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by [each of] such Noteholders [and the Securities Insurer] to make payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders [and the Securities Insurer], to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred and all advances made by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith.

 

(e)           Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder [or the Securities Insurer] any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof [or the Securities Insurer] or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.

 

(f)           All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceedings relative thereto, and any such action or Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, shall be for the ratable benefit of the Holders of the Notes [and the Securities Insurer].

 

(g)           In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Noteholders, and it shall not be necessary to make any Noteholder a party to any such Proceedings.

 

Section 5.04   Remedies; Priorities.

 

(a)           If an Event of Default shall have occurred and be continuing, the Indenture Trustee [shall, at the direction of the Securities Insurer, and if a Securities Insurer Default has occurred and is continuing, the Indenture Trustee] may, and at the direction of a majority of the Holders of the Outstanding Notes shall, do one or more of the following (subject to Section 5.05 hereof):

 

  

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(i)           institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the Notes and amounts due [to the Securities Insurer or] under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuing Entity and any other obligor upon such Notes moneys adjudged due;

 

(ii)          institute Proceedings from time to time for the complete or partial foreclosure with respect to the Collateral;

 

(iii)         exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee[, the Securities Insurer] or the Noteholders; and

 

(iv)         sell the Collateral or any portion thereof or rights or interest therein in a commercially reasonable manner, at one or more public or private sales called and conducted in any manner permitted by law; [provided, however, (x) if a Securities Insurer Default has occurred and is continuing, the Indenture Trustee may not sell or otherwise liquidate the Collateral following an Event of Default, unless (A) the Holders of 100% of the Outstanding Notes consent thereto, (B) the proceeds of such sale or liquidation distributable to the Noteholders are sufficient to discharge in full all amounts then due and unpaid upon such Notes for principal and/or interest or (C) the Indenture Trustee determines that the Collateral will not continue to provide sufficient funds for the payment of principal of and interest on the Notes as they would have become due if the Notes had not been declared due and payable, and the Indenture Trustee obtains the consent of Holders of 66-2/3% of the Outstanding Notes, and (y) if no Securities Insurer Default has occurred and is continuing, the Securities Insurer may direct the Indenture Trustee and the Indenture Trustee shall comply with any such direction, to sell or otherwise liquidate the Collateral following an Event of Default if (1) the conditions under either A, B or C in clause (x) above are met or (2) the Securities Insurer has paid the Notes in full under the Guaranty Policy.  In determining such sufficiency or insufficiency with respect to clause (B) and (C) of this Subsection (a) (iv), the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Collateral for such purpose].

 

(b)           If the Indenture Trustee collects any money or property pursuant to this ARTICLE V, it shall pay out the money or property in the following order:

 

FIRST:  to the Indenture Trustee, any Indenture Trustee Fees due and payable, for any costs or expenses incurred by it in connection with the enforcement of the remedies provided for in this Article V and any other amounts payable to the Indenture Trustee pursuant to Section 6.07 hereof;

 

SECOND:  to the Servicer, any Servicing Compensation due and payable under the Sale and Servicing Agreement;

 

  

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THIRD:  to the Master Servicer, any Master Servicing Compensation due and unpaid;

 

[FOURTH:  to the Securities Insurer for any Guaranty Insurance Premiums due and payable;]

 

FIFTH:  to the Owner Trustee, any Owner Trustee Fees due and payable;

 

SIXTH:  to the Noteholders for amounts due and unpaid on the Notes for interest, pro rata among the Holders of the Notes for interest, according to the amounts due and payable pursuant to Section 5.01(d) of the Sale and Servicing Agreement, until the Note Principal Balance of the Notes is reduced to zero;

 

SEVENTH:  to the Noteholders for amounts due and unpaid on the Notes for principal, pro rata among the Holders of the Notes, according to the amounts due and payable pursuant to Section 5.01(d) of the Sale and Servicing Agreement, until the Note Principal Balance of the Notes is reduced to zero;

 

[EIGHTH:  to the Securities Insurer for any amounts then due and payable pursuant to Section 5.01(e) of the Sale and Servicing Agreement;]

 

NINTH:  to the Noteholders for amounts due and unpaid on the Notes of Excess Spread, pro rata among the Holders of the Notes, according to the amounts due and payable pursuant to Section 5.01(e) of the Sale and Servicing Agreement, until the Note Principal Balance is reduced to zero;

 

TENTH:  to the Noteholders for amounts due and unpaid on the Notes of Noteholder’s Interest Carry-Forward Amount, pro rata among the Holders of the Notes, according to the amounts due and payable pursuant to Section 5.01(e) of the Sale and Servicing Agreement, pro rata, the Noteholders’ Interest Carry Forward Amount due and unpaid; and

 

ELEVENTH:  concurrently to the Servicer in an amount equal to any outstanding Nonrecoverable Servicing Advances and to the Master Servicer in an amount equal to any outstanding Nonrecoverable Monthly Advances, then to reimburse the Servicer the Servicing Fee Recovery Amount if, any, and then for deposit into the Certificate Distribution Account for payment to the holders of the Residual Interest Certificate.

 

The Indenture Trustee may fix a record date and payment date for any payment to be made to the Noteholders pursuant to this Section.  At least 15 days before such record date, the Indenture Trustee shall mail to each Noteholder[, the Securities Insurer] and the Issuing Entity a notice that states the record date, the payment date and the amount to be paid.

 

Section 5.05   Optional Preservation of the Collateral.  If the Notes have been declared to be due and payable under Section 5.02 hereof following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Collateral.  It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when 

 

  

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determining whether or not to maintain possession of the Collateral.  In determining whether to maintain possession of the Collateral, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Collateral for such purpose.

 

Section 5.06   Limitation of Suits.  [No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder for as long as a Securities Insurer Default has not occurred or is not continuing and, if a Securities Insurer Default has occurred and is continuing, unless:

 

(a)           such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default;

 

(b)           the Holders of not less than 25% of the Outstanding Notes have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;

 

(c)           such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request;

 

(d)           the Indenture Trustee for 30 days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceeding; and

 

(e)           no direction inconsistent with such written request has been given to the Indenture Trustee during such 30-day period by the Majority Noteholders.]

 

It is understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided.

 

In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Holders of Notes, each group representing less than a Majority Noteholders, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture.

 

Section 5.07  Unconditional Rights of Noteholders to Receive Principal and/or Interest.  Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the applicable Maturity Date thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.

 

  

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Section 5.08   Restoration of Rights and Remedies.  If the Indenture Trustee[, the Securities 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 Securities Insurer] or to such Noteholder, then and in every such case the Issuing Entity, the Indenture Trustee[, the Securities 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 Securities Insurer] and the Noteholders shall continue as though no such Proceeding had been instituted.

 

Section 5.09   Rights and Remedies Cumulative.  No right or remedy herein conferred upon or reserved to the Indenture Trustee[, the Securities Insurer] or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.

 

Section 5.10   Delay or Omission Not a Waiver.  No delay or omission of the Indenture Trustee[, the Securities Insurer] or any Holder of any Note to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein.  Every right and remedy given by this Article V or by law to the Indenture Trustee[, the Securities 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 Securities Insurer] or by the Noteholders, as the case may be[, subject, in each case, however, to the right of the Securities Insurer to control any such right and remedy, except as provided in Section 11.20].

 

Section 5.11   Control by Noteholders.  [Subject to the rights of the Securities Insurer under Section 11.18 hereof,] the Majority Noteholders shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided, however, that:

 

(a)           such direction shall not be in conflict with any rule of law or with this Indenture;

 

(b)           subject to the express terms of Section 5.04 hereof, any direction to the Indenture Trustee to sell or liquidate the Collateral shall be by Holders of Notes representing not less than 100% of the Notes Outstanding;

 

(c)           if the conditions set forth in Section 5.05 hereof have been satisfied and the Indenture Trustee elects to retain the Collateral pursuant to such Section, then any direction to the Indenture Trustee by Holders of Notes representing less than 100% of the Notes Outstanding to sell or liquidate the Collateral shall be of no force and effect; and

 

  

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(d)           the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction.

 

Notwithstanding the rights of the Noteholders set forth in this Section 5.11, subject to Section 6.01 hereof, the Indenture Trustee need not take any action that it determines might involve it in liability or might materially adversely affect the rights of any Noteholders not consenting to such action.

 

Section 5.12   Waiver of Past Defaults.  The [Securities Insurer may, or at any time when a Securities Insurer Default has occurred and is continuing, the] Majority Noteholders may waive any past Default or Event of Default and its consequences, except a Default (a) in the payment of principal of or interest on any of the Notes or (b) in respect of a covenant or provision hereof that cannot be modified or amended without the consent of [the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing) or] the Holder of each Note.  In the case of any such waiver, the Issuing Entity, the Indenture Trustee[, the Securities Insurer] and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereto.

 

Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto.

 

Section 5.13   Undertaking For Costs.  All parties to this Indenture agree, and each Holder of any Note by such Holder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to (a) any suit instituted by the Indenture Trustee [or the Securities Insurer], (b) any suit instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Notes or (c) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).

 

Section 5.14   Waiver of Stay or Extension Laws.  The Issuing Entity covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuing Entity (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee [or 

 

  

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the Securities Insurer], but will suffer and permit the execution of every such power as though no such law had been enacted.

 

Section 5.15   Action on Notes.  The Indenture Trustee’s right to seek and recover judgment on the Notes or under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture.  Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee[, the Securities Insurer] or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuing Entity or by the levy of any execution under such judgment upon any portion of the Collateral or upon any of the assets of the Issuing Entity.  Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.04(B) hereof.

 

Section 5.16   Performance and Enforcement of Certain Obligations.

 

(a)           Promptly following a request from the Indenture Trustee [or the Securities Insurer] to do so and at the Master Servicer’s expense, the Issuing Entity shall take all such lawful action as the Indenture Trustee [or the Securities Insurer] may request to compel or secure the performance and observance by the Transferor, the Servicer and the Master Servicer, as applicable, of each of their obligations to the Issuing Entity under or in connection with the Sale and Servicing Agreement, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuing Entity, under or in connection with the Sale and Servicing Agreement to the extent and in the manner directed by the Indenture Trustee [or the Securities Insurer], including the transmission of notices of default on the part of the Transferor or the Master Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Transferor, the Master Servicer or the Servicer of each of their obligations under the Sale and Servicing Agreement.

 

(b)           If an Event of Default has occurred and is continuing, the Indenture Trustee shall, [at the direction of the Securities Insurer, and] at the direction (which direction shall be in writing or by telephone, confirmed in writing promptly thereafter) of the Holders of 66-2/3% of the Notes Outstanding shall[, with the prior written consent of the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing),] exercise all rights, remedies, powers, privileges and claims of the Issuing Entity, as Securityholder, against the Transferor, the Servicer or the Master Servicer under or in connection with the Sale and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Transferor, the Servicer or the Master Servicer, as the case may be, of each of their obligations to the Issuing Entity thereunder and to give any consent, request, notice, direction, approval, extension, or waiver under the Sale and Servicing Agreement, and any right of the Issuing Entity to take such action shall be suspended.

 

Section 5.17   Rights in Respect of Insolvency Proceedings.

 

(a)           In the event that the Indenture Trustee has received a certified copy of an order of the appropriate court that any scheduled payment of principal of or interest on a Note has been voided in whole or in part as a preference payment under applicable bankruptcy law, the Indenture Trustee shall so [notify the Securities Insurer, shall comply with the provisions of the Guaranty Policy to obtain payment by the Securities Insurer of such voided scheduled 

 

  

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payment, and shall, at the time it provides notice to the Securities Insurer,] notify, by mail to Holders of the Notes that, in the event that any Holder’s scheduled payment is so recovered, such Holder will be entitled to payment pursuant to the terms of the Policy, a copy of which shall be made available through the Indenture Trustee[, the Securities Insurer]or the Fiscal Agent, if any, and the Indenture Trustee shall furnish to the [Securities Insurer or its] Fiscal Agent, if any, its records evidencing the payments of principal of and interest on the Notes, if any, which have been made by the Indenture Trustee and subsequently recovered from Holders, and the dates on which such payments were made.

 

[(b)           The Indenture Trustee shall promptly notify the Securities Insurer of either of the following as to which it has actual knowledge:  (i) the commencement of any proceeding by or against the Issuing Entity commenced under the United States Bankruptcy Code or any other applicable bankruptcy, insolvency, receivership, rehabilitation or similar law (an “Insolvency Proceeding”) and (ii) the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer (a “Preference Claim”) of any payment of principal of, or interest on, the Notes.  Each Holder, by its purchase of Notes, and the Indenture Trustee hereby agree that, so long as a the Securities Insurer Default shall not have occurred and be continuing, the Securities Insurer may at any time during the continuation of an Insolvency Proceeding direct all matters relating to such Insolvency Proceeding, including, without limitation, (i) all matters relating to any Preference Claim, (ii) the direction of any appeal of any order relating to any Preference Claim at the expense of the Securities Insurer but subject to reimbursement as provided in the Insurance Agreement and (iii) the posting of any surety, supersedes or performance Note pending any such appeal.  In addition, and without limitation of the foregoing, as set forth in Section 5.18, the Securities Insurer shall be subrogated to, and each Holder and the Indenture Trustee hereby delegate and assign, to the fullest extent permitted by law the rights of the Indenture Trustee and each Holder in the conduct of any Insolvency Proceeding, 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 Insolvency Proceeding.

 

(c)           The Indenture Trustee shall furnish to the [Securities Insurer or its] Fiscal Agent its records evidencing the payments of principal of and interest on the Notes which have been made by the Indenture Trustee and subsequently recovered from Noteholders, and the dates on which such payments were made.]

 

Section 5.18   [Effect of Payments by the Securities Insurer; Subrogation.

 

(a)           Anything herein to the contrary notwithstanding, any payment with respect to the principal of or interest on the Notes which is made with moneys received pursuant to the terms of the Policy shall not be considered payment by the Issuing Entity of the Notes, shall not discharge the Issuing Entity in respect of its obligation to make such payment and shall not result in the payment of or the provision for the payment of the principal of or interest on the Notes within the meaning of Section 4.01 hereof.  The Issuing Entity and the Indenture Trustee acknowledge that without the need for any further action on the part of the Securities Insurer, the Issuing Entity, the Indenture Trustee or the Note Registrar (i) to the extent the Securities Insurer makes payments, directly or indirectly, on account of principal of or interest on the Notes to the Holders of such Notes, the Securities Insurer will be fully subrogated to the rights of such Holders to receive such principal and interest from the Issuing Entity, and (ii) the Securities 

 

  

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Insurer shall be paid such principal and interest in its capacity as a Holder of Notes but only from the sources and in the manner provided herein for the payment of such principal and interest in each case only after the Holders of the Notes have received payment of all scheduled payments of principal and interest due thereon.]

 

ARTICLE VI

 

THE INDENTURE TRUSTEE

 

Section 6.01   Duties of Indenture Trustee.

 

(a)           If an Event of Default has occurred and is continuing, the Indenture Trustee shall exercise the rights and powers vested in it by this Indenture and use the same degree of care and skill in their exercise as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

 

(b)           Except during the continuance of an Event of Default:

 

(i)           the Indenture Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and

 

(ii)           in the absence of bad faith or gross negligence on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; provided, however, that the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

 

(c)           The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful misconduct, except that:

 

(i)           this paragraph does not limit the effect of paragraph (b) of this Section 6.01;

 

(ii)           the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and

 

(iii)           the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.11 hereof.

 

(d)           Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section 6.01.

 

(e)           The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuing Entity.

 

  

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(f)           Money held in trust by the Indenture Trustee shall be segregated from other funds held by the Indenture Trustee except to the extent permitted by law or the terms of this Indenture or the Sale and Servicing Agreement.

 

(g)           No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it; provided, however, that the Indenture Trustee shall not refuse or fail to perform any of its duties hereunder solely as a result of nonpayment of its normal fees and expenses and provided, further, that nothing in this Section 6.01(g) shall be construed to limit the exercise by the Indenture Trustee of any right or remedy permitted under this Indenture or otherwise in the event of the Issuing Entity’s failure to pay the Indenture Trustee’s fees and expenses pursuant to Section 6.07 hereof.  In determining that such repayment or indemnity is not reasonably assured to it, the Indenture Trustee must consider not only the likelihood of repayment or indemnity by or on behalf of the Issuing Entity but also the likelihood of repayment or indemnity from amounts payable to it from the Collateral pursuant to Section 6.07 hereof.

 

(h)           Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section.

 

(i)           The Indenture Trustee shall not be required to take notice or be deemed to have notice or knowledge of any Event of Default (other than an Event of Default pursuant to Section 5.01(a) (I) or (II) hereof) unless a Responsible Officer of the Indenture Trustee shall have received written notice thereof or otherwise shall have actual knowledge thereof.  In the absence of receipt of notice or such knowledge, the Indenture Trustee may conclusively assume that there is no Event of Default.

 

(j)           [The Indenture Trustee shall, and hereby agrees, that it will hold the Guaranty Policy in trust and will hold any proceeds of any claim on the Guaranty Policy in trust solely for the use and benefit of the Noteholders.  The Indenture Trustee will deliver to the Rating Agencies notice of any change made to the Guaranty Policy.]

 

Section 6.02   Rights of Indenture Trustee.

 

(a)           The Indenture Trustee may rely on any document believed by it to be genuine and to have been signed or presented by the proper person.  The Indenture Trustee need not investigate any fact or matter stated in the document.

 

(b)           Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel.  The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.

 

(c)           The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a 

 

  

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custodian or nominee so long as the Indenture Trustee remains liable to the Issuing Entity, the Noteholders and the Securities Insurer for the performance of its duties hereunder.

 

(d)           The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that such action or omission by the Indenture Trustee does not constitute willful misconduct, negligence or bad faith.

 

(e)           The Indenture Trustee may, at the expense of the Transferor as provided under Section 6.07, consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.

 

Section 6.03   Individual Rights of Indenture Trustee.  The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuing Entity or its Affiliates with the same rights it would have if it were not Indenture Trustee.  Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights.  However, the Indenture Trustee must comply with Sections 6.11 and 6.12 hereof.

 

Section 6.04   Indenture Trustee’s Disclaimer.  The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, shall not be accountable for the Issuing Entity’s use of the proceeds from the Notes, or responsible for any statement of the Issuing Entity in the Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee’s certificate of authentication.

 

Section 6.05   Notices of Default.  If a Default occurs and is continuing and if it is known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice of the Default within 90 days after it occurs [and to the Securities Insurer notice of such Default promptly after it occurs].  Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the mandatory redemption provisions of such Note), the Indenture Trustee may withhold the notice to Noteholders if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Noteholders.

 

Section 6.06   Reports by Indenture Trustee to Holders.  The Indenture Trustee shall deliver to each Noteholder such information reasonably available to the Indenture Trustee as may be required to enable such Holder to prepare its federal and state income tax returns.

 

Section 6.07   Compensation and Indemnity.  As compensation for its services hereunder, the Indenture Trustee shall be entitled to receive, on each Payment Date, the Indenture Trustee’s Fee pursuant to Section 8.02(c) hereof (which compensation shall not be limited by any law on compensation of a trustee of an express trust) and shall be entitled to reimbursement by the Master Servicer for all reasonable out-of-pocket expenses incurred or made by it, including costs of collection, in addition to the compensation for its services.  Such 

 

  

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expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts and Opinions of Counsel hereunder.  The Issuing Entity agrees to cause the Master Servicer, at its expense, to indemnify the Indenture Trustee against any and all loss, liability or expense (including attorneys’ fees) incurred by it in connection with the administration of this trust and the performance of its duties hereunder.  The Indenture Trustee shall notify the Issuing Entity, the Servicer and the Master Servicer promptly of any claim for which it may seek indemnity.  Failure by the Indenture Trustee so to notify the Issuing Entity, the Servicer and the Master Servicer shall not relieve the Issuing Entity of its obligations hereunder.  The Issuing Entity shall or shall cause the Master Servicer to defend any such claim, and the Indenture Trustee may have separate counsel reasonably acceptable to the Master Servicer and the Issuing Entity shall or shall cause the Master Servicer to pay the reasonable fees and expenses of such counsel.  Neither the Issuing Entity, the Servicer nor the Master Servicer need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee through the Indenture Trustee’s own willful misconduct, negligence or bad faith.

 

The Issuing Entity’s payment obligations to the Indenture Trustee pursuant to this Section 6.07 shall survive the discharge of this Indenture.  When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01(a) (v) hereof with respect to the Issuing Entity, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law.

 

Section 6.08   Replacement of Indenture Trustee.  No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section 6.08.  The Indenture Trustee may resign at any time by so notifying the Issuing Entity [and the Securities Insurer].  [The Securities Insurer or the Holders of a majority of the Outstanding Notes with the consent of the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing) may remove the Indenture Trustee by so notifying the Indenture Trustee and may appoint a successor Indenture Trustee subject to Section 6.11.] The Issuing Entity shall remove the Indenture Trustee [upon the prior written consent of the Securities Insurer] if:

 

(a)           the Indenture Trustee fails to comply with Section 6.11 hereof;

 

(b)           the Indenture Trustee is adjudged a bankrupt or insolvent;

 

(c)           a receiver or other public officer takes charge of the Indenture Trustee or its property; or

 

(d)           the Indenture Trustee otherwise becomes incapable of acting.

 

If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuing Entity shall promptly appoint a successor Indenture Trustee [acceptable to the Securities Insurer].

 

  

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A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee[, the Securities Insurer] and to the Issuing Entity.  Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture.  The successor Indenture Trustee shall mail a notice of its succession to Noteholders.  The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.

 

If a successor Indenture Trustee does not take office within 60 days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee[, the Securities Insurer], the Issuing Entity or the Holders of a majority of the Outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.

 

If the Indenture Trustee fails to comply with Section 6.11 hereof, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee [acceptable to the Securities Insurer].

 

Notwithstanding the replacement of the Indenture Trustee pursuant to this Section 6.08, the Issuing Entity’s and the Master Servicer’s obligations under Section 6.07 hereof shall continue for the benefit of the retiring Indenture Trustee [acceptable to the Securities Insurer].

 

Section 6.09   Successor Indenture Trustee by Merger.  If the Indenture Trustee consolidates with, merges or converts into, or transfers all or substantially all its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or transferee corporation without any further act shall be the successor Indenture Trustee; provided, however, that such corporation or banking association shall otherwise be qualified and eligible under Section 6.11 hereof.  The Indenture Trustee shall provide [the Securities Insurer and] the Rating Agencies prior written notice of any such transaction.

 

In case at the time such successor or successors by merger, conversion or consolidation to the Indenture Trustee shall succeed to the trusts created by this Indenture any of the Notes shall have been authenticated but not delivered, any such successor to the Indenture Trustee may adopt the certificate of authentication of any predecessor trustee, and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force which it is anywhere in the Notes or in this Indenture provided that the certificate of the Indenture Trustee shall have.

 

Section 6.10   Appointment of Co-Indenture Trustee or Separate Indenture Trustee.

 

(a)           Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Collateral may at the time be located, the Indenture Trustee shall have the power, [with the prior written consent of the Securities Insurer (so long as no Securities Insurer Default has occurred 

 

  

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and is continuing),] and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Collateral, or any part hereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee [or the Securities Insurer] may consider necessary or desirable.  No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 6.11 hereof and no notice to Noteholders of the appointment of any co-trustee or separate trustee shall be required under Section 6.08 hereof[; provided that the Indenture Trustee shall deliver notice of any such co-trustee or separate trustee to the Securities Insurer].

 

(b)           Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:

 

(i)           all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Collateral or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;

 

(ii)           no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and

 

(iii)           the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.

 

(c)           Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them.  Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VI.  Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, jointly with the Indenture Trustee, subject to all the provisions of this Indenture, specifically including every provision of this Indenture relating to the conduct of, affecting the liability of, or affording protection to, the Indenture Trustee.  Every such instrument shall be filed with the Indenture Trustee.

 

(d)           Any separate trustee or co-trustee may at any time constitute the Indenture Trustee its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name.  If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the 

 

  

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Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.

 

Section 6.11  Eligibility; Disqualification.  The Indenture Trustee shall at all times satisfy the requirements of TIA Section 310(a).  The Indenture Trustee shall [be acceptable to the Securities Insurer and shall] have a combined capital and surplus of at least $50,000,000 as set forth in its most recent published annual report of condition.  The Indenture Trustee shall comply with TIA Section 310(b), including the optional provision permitted by the second sentence of TIA Section 310(b) (9); provided, however, that there shall be excluded from the operation of TIA Section 310(b) (1) any indenture or indentures under which other securities of the Issuing Entity are outstanding if the requirements for such exclusion set forth in TIA Section 310(b) (1) are met.

 

Section 6.12   Preferential Collection of Claims Against Issuing Entity.  The Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b).  An Indenture Trustee which has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.

 

Section 6.13   Waiver of Setoff.  The Indenture Trustee hereby expressly waives any and all rights of setoff that the Indenture Trustee may otherwise at any time have under the applicable law with respect to any Trust Account and agrees that amounts in the Trust Accounts shall at all times be held and applied solely in accordance with the Basic Documents.

 

ARTICLE VII

 

NOTEHOLDERS’ LISTS AND REPORTS

 

Section 7.01   Issuing Entity to Furnish Indenture Trustee Names and Addresses of Noteholders.  The Issuing Entity will furnish or cause to be furnished to the Indenture Trustee (a) not more than five days after the earlier of (i) each Record Date and (ii) three months after the last Record Date, a list, in such form as the Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes as of such Record Date, (b) at such other times as the Indenture Trustee may request in writing, within 30 days after receipt by the Issuing Entity of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished.  The Indenture Trustee, [or if the Indenture Trustee is not the Note Register, the Issuing Entity, shall furnish to the Securities Insurer] in writing on an annual basis[, and at such other times as the Securities Insurer may request, a copy of the list of Noteholders].

 

Section 7.02   Preservation of Information; Communications to Noteholders.

 

(a)           The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 hereof and the names and addresses of Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar.  The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon 

 

  

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receipt of a new list so furnished.  [The Indenture Trustee shall make such list available to the Securities Insurer on request.]

 

(b)           Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes.

 

(c)           The Issuing Entity, the Indenture Trustee and the Note Registrar shall have the protection of TIA Section 312(c).

 

Section 7.03   Reports by Issuing Entity.

 

(a)           The Issuing Entity shall:

 

(i)           file with the Indenture Trustee [and the Securities Insurer], within 15 days after the Issuing Entity is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Issuing Entity may be required to file with the Commission pursuant to Section 13 OR 15(d) of the Exchange Act;

 

(ii)           file with the Indenture Trustee[, the Securities Insurer] and the Commission in accordance with the rules and regulations prescribed from time to time by the Commission such additional information, documents and reports with respect to compliance by the Issuing Entity with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and

 

(iii)           supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to all Noteholders described in TIA Section 313(c)) such summaries of any information, documents and reports required to be filed by the Issuing Entity pursuant to clauses (i) and (ii) of this Section 7.03(a) and by rules and regulations prescribed from time to time by the Commission.

 

(b)           Unless the Issuing Entity otherwise determines, the fiscal year of the Issuing Entity shall end on December 31 of each year.

 

Section 7.04   Reports by Indenture Trustee.  If required by TIA Section 313(a), within 60 days after each __________, beginning with __________, 20__, the Indenture Trustee shall mail [to the Securities Insurer and] to each Noteholder as required by TIA Section 313(c) a brief report dated as of such date that complies with TIA Section 313(a).  The Indenture Trustee also shall comply with TIA Section 313(b).

 

A copy of each report at the time of its mailing to Noteholders shall be filed by the Indenture Trustee with the Commission and each securities exchange, if any, on which the Notes are listed.  The Issuing Entity shall notify the Indenture Trustee if and when the Notes are listed on any securities exchange.

 

  

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ARTICLE VIII

 

ACCOUNTS, DISBURSEMENTS AND RELEASES

 

Section 8.01   Collection of Money and Claims Under the Guaranty Policy.

 

(a)           Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture.  The Indenture Trustee shall apply all such money received by it as provided in this Indenture.  Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Collateral, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings.  Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V hereof.

 

(b)           [The Notes will be insured by the Guaranty Policy pursuant to the terms set forth therein, notwithstanding any provisions to the contrary contained in this Indenture or the Sale and Servicing Agreement.  All amounts received under the Guaranty Policy shall be used solely for the payment to Noteholders of principal and interest on the Notes.]

 

Section 8.02   Trust Accounts; Payments.

 

(a)           On or prior to the Closing Date, the Issuing Entity shall cause the Master Servicer to establish and maintain, in the name of the Indenture Trustee for the benefit of the Noteholders [and the Securities Insurer], or on behalf of the Owner Trustee for the benefit of the Securityholders, the Collection Account as provided in Article V of the Sale and Servicing Agreement.  The Indenture Trustee shall establish and maintain, in the name of the Indenture Trustee on behalf of the holders of the Notes, the Note Payment Account as provided in Article V of the Sale and Servicing Agreement.  The Indenture Trustee shall establish and maintain, in the name of the Indenture Trustee on behalf of the holders of the Notes, the Policy Payments Account as provided in Article V of the Sale and Servicing Agreement.  The Indenture Trustee shall also establish and maintain an account (the “Certificate Distribution Account”) in the name of the Owner Trustee on behalf of the holders of the Residual Interest Certificates.  The Indenture Trustee shall deposit amounts into each of the accounts in accordance with the terms hereof, the Sale and Servicing Agreement and the Servicer’s Monthly Remittance Report.

 

(b)           On the _____ Business Day prior to each Payment Date, the Servicer will remit to the Indenture Trustee for deposit into the Note Payment Account, the applicable portions of the Available Collection Amount from the Collection Account, pursuant to Section 5.01(b)(2) of the Sale and Servicing Agreement and the Indenture Trustee will deposit such amount in the Note Payment Account.  On each Payment Date, to the extent funds are available in the Note Payment Account, the Indenture Trustee shall either retain funds in the Note Payment Account for payment on such day or make the withdrawals from the Note Payment Account and deposits 

 

  

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into the Certificate Distribution Account for distribution on such Payment Date as required pursuant to Section 5.01(c) of the Sale and Servicing Agreement.

 

(c)           On each Payment Date and Redemption Date, to the extent funds are available in the Note Payment Account, the Indenture Trustee shall make the following payments from the amounts on deposit in the Note Payment Account in the following order of priority (except as otherwise provided in Section 5.04(b) hereof):

 

(i)           (A) to the Indenture Trustee, an amount equal to the Indenture Trustee Fee and all unpaid Indenture Trustee Fees from prior Payment Dates; (B) to the Master Servicer, an amount equal to the Master Servicer Compensation and all unpaid Master Servicing Compensation from prior Payment Dates; (C) to the Servicer, on behalf of the Owner Trustee, an amount equal to the Servicing Compensation (net of the sum of any amounts retained prior to deposit into the Collection Account pursuant to Section 5.01(b)(1) of the Sale and Servicing Agreement) and all unpaid Servicing Compensation from prior Payment Dates; [(D) to the Securities Insurer, an amount equal to the Guaranty Insurance Premium and all unpaid Guaranty Insurance Premiums from prior Payment Dates;] and

 

(ii)           to the Noteholders [and the Securities Insurer], the amounts set forth in Sections 5.01(d) and (e) of the Sale and Servicing Agreement.

 

(d)           On each Payment Date and each Redemption Date, to the extent of the interest of the Indenture Trustee in the Certificate Distribution Account (as described in Section 5.03(a) of the Sale and Servicing Agreement), the Indenture Trustee hereby authorizes the Owner Trustee or the Paying Agent, as applicable, to make the distributions from the Certificate Distribution Account as required pursuant to Sections 5.01(d) and (e) of the Sale and Servicing Agreement.

 

Section 8.03   General Provisions Regarding Accounts.

 

(a)           So long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Trust Accounts shall be invested in Permitted Investments and reinvested by the Indenture Trustee at the direction of the Master Servicer in accordance with the provisions of Article V of the Sale and Servicing Agreement.  All income or other gain from investments of moneys deposited in the Trust Accounts shall be deposited by the Indenture Trustee into the Note Payment Account, and any loss resulting from such investments shall be charged to such account.

 

(b)           Subject to Section 6.01(c) hereof, the Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any of the Trust Accounts resulting from any loss on any Permitted Investment included therein except for losses attributable to the Indenture Trustee’s failure to make payments on such Permitted Investments issued by the Indenture Trustee, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms.

 

(c)           If (i) the Issuing Entity shall have failed to give investment directions for any funds on deposit in the Trust Accounts to the Indenture Trustee by 11:00 a.m. Eastern Time 

 

  

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(or such other time as may be agreed by the Issuing Entity and Indenture Trustee) on any Business Day or (ii) a Default or Event of Default shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable pursuant to Section 5.02 hereof or (iii) if such Notes shall have been declared due and payable following an Event of Default, amounts collected or receivable from the Collateral are being applied in accordance with Section 5.05 hereof as if there had not been such a declaration, then the Indenture Trustee shall, to the fullest extent practicable, invest and reinvest funds in the Trust Accounts in one or more Permitted Investments.

 

Section 8.04   Servicer’s Monthly Statements.  On each Payment Date, the Indenture Trustee shall deliver the Servicer’s Monthly Remittance Report (as defined in the Sale and Servicing Agreement) with respect to such Payment Date to DTC, the Master Servicer, the Rating Agencies [and the Securities Insurer].

 

Section 8.05   Release of Collateral.

 

(a)           Subject to Section 11.01 and the terms of the Basic Documents, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the Indenture Trustee’s interest in the same, in a manner and under circumstances that are not inconsistent with the provisions of this Indenture.  No party relying upon an instrument executed by the Indenture Trustee as provided in this Article VIII shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.  [The Indenture Trustee shall surrender the Guaranty Policy to the Securities Insurer upon the conditions in Section 4.01 hereof.]

 

(b)           The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due to the Certificateholders pursuant to Section 5.02(b) of the Sale and Servicing Agreement, to the Servicer pursuant to Section 8.02(c)(i)(A) hereof, to the Master Servicer pursuant to Section 8.02(c)(i)(B) hereof, [to the Securities Insurer pursuant to Section 8.02(c)(i)(C) hereof,] to the Indenture Trustee pursuant to Section 8.02(c)(i)(D) hereof, to the Owner Trustee pursuant to Section 8.02(c)(i)(E) hereof and to the Custodian pursuant to Section 8.02(c)(i)(F) hereof have been paid, release any remaining portion of the Collateral that secured the Notes from the lien of this Indenture and release to the Issuing Entity or any other Person entitled thereto any funds then on deposit in the Trust Accounts.  The Indenture Trustee shall release property from the lien of this Indenture pursuant to this Subsection (B) only upon receipt by it [and the Securities Insurer] of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA) Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01 hereof.

 

Section 8.06   Opinion of Counsel.  The Indenture Trustee [and the Securities Insurer] shall receive at least seven days’ prior notice when requested by the Issuing Entity to take any action pursuant to Section 8.05(a) hereof, accompanied by copies of any instruments involved, and the Indenture Trustee [and the Securities Insurer] may also require, as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee [and the Securities Insurer], stating the legal effect of any such action, outlining the steps 

 

  

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required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in contravention of the provisions of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Collateral.  Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action.

 

ARTICLE IX

 

SUPPLEMENTAL INDENTURES

 

Section 9.01   Supplemental Indentures Without Consent of Noteholders.

 

(a)          Without the consent of the Holders of any Notes but with prior notice to the Rating Agencies [and with the prior written consent of the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing),] the Issuing Entity and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:

 

(i)           to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

 

(ii)          to evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuing Entity, and the assumption by any such successor of the covenants of the Issuing Entity herein and in the Notes contained;

 

(iii)         to add to the covenants of the Issuing Entity, for the benefit of the Holders of the Notes, or to surrender any right or power herein conferred upon the Issuing Entity;

 

(iv)         to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;

 

(v)          to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, however, that such action shall not adversely affect the interests of the Holders of the Notes;

 

(vi)         to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the 

 

  

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trusts hereunder by more than one trustee, pursuant to the requirements of Article VI hereof; or

 

(vii)        to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA.

 

The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.

 

(b)          The Issuing Entity and the Indenture Trustee, [with the prior written consent of the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing)], when authorized by an Issuer Order, may, also without the consent of any of the Holders of the Notes but with prior consent of the Rating Agencies, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that such action shall not, as evidenced by (i) an Opinion of Counsel or (ii) satisfaction of the Rating Agency Condition, adversely affect in any material respect the interests of any Noteholder [including the interests of the Securities Insurer] to the extent it is, or will become, upon payment in full of all amounts due to any Noteholder hereunder or pursuant to a Note, a Noteholder pursuant to Section 2.06(b) hereof.

 

Section 9.02   Supplemental Indentures with Consent of Noteholders.  The Issuing Entity and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior consent of the Rating Agencies,[ the Securities Insurer (so long as no Securities Insurer Default has occurred and is continuing)] and with the consent of the Holders of not less than a majority of the Outstanding Notes, by Act of such Holders delivered to the Issuing Entity and the Indenture Trustee, enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby[ and the Securities Insurer]:

 

(a)           change the date of payment of any installment of principal of or interest on any Note, or reduce the Note Principal Balance thereof, the interest rate thereon or the Termination Price with respect thereto, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Collateral to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V hereof, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);

 

  

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(b)           reduce the percentage of the Outstanding Notes, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;

 

(c)           modify or alter the provisions of the proviso to the definition of the term “Outstanding” or “Voting Rights”;

 

(d)           reduce the percentage of the Outstanding Notes required to direct the Indenture Trustee to direct the Issuing Entity to sell or liquidate the Collateral pursuant to Section 5.04 hereof;

 

(e)           modify any provision of this Section except to increase any percentage specified herein or to provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Holder of each Outstanding Note affected thereby;

 

(f)           modify any of the provisions of this Indenture in such manner as to affect the calculation of the amount of any payment of interest or principal due on any Note on any Payment Date (including the calculation of any of the individual components of such calculation) or to affect the rights of the Holders of Notes to the benefit of any provisions for the mandatory redemption of the Notes contained herein; or

 

(g)           permit the creation of any lien ranking prior to or on a parity with the lien of this Indenture with respect to any part of the Collateral or, except as otherwise permitted or contemplated herein, terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security provided by the lien of this Indenture.

 

The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder.  The Indenture Trustee shall not be liable for any such determination made in good faith.

 

In connection with requesting the consent of the Noteholders pursuant to this Section 9.02, the Indenture Trustee shall mail to the Holders of the Notes to which such amendment or supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture.  It shall not be necessary for any Act of Noteholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.

 

Section 9.03   Execution of Supplemental Indentures.  In executing, or permitting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modification thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and subject to Sections 6.01 and 6.02 hereof, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture.  The Indenture Trustee may, but shall not be obligated 

 

  

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to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise.

 

Section 9.04   Effect of Supplemental Indentures.  Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture shall be and shall be deemed to be modified and amended in accordance therewith with respect to the Notes affected thereby, and the respective rights, limitations of rights, obligations, duties, liabilities and immunities under this Indenture of the Indenture Trustee, the Issuing Entity and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such supplemental indenture shall be and be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

 

Section 9.05   Conformity with Trust Indenture Act.  Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the Trust Indenture Act as then in effect so long as this Indenture shall then be qualified under the Trust Indenture Act.

 

Section 9.06   Reference in Notes to Supplemental Indentures.  Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture.  If the Issuing Entity or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuing Entity, to any such supplemental indenture may be prepared and executed by the Issuing Entity and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.

 

Section 9.07   Amendments to Owner Trust Agreement.  Subject to Section 11.1 of the Owner Trust Agreement, the Indenture Trustee shall, upon Issuer Order, consent to any proposed amendment to the Owner Trust Agreement or an amendment to or waiver of any provision of any other document relating to the Owner Trust Agreement, such consent to be given without the necessity of obtaining the consent of the Holders of any Notes upon satisfaction of the requirements under Section 11.1 of the Owner Trust Agreement.  Nothing in this Section shall be construed to require that any Person obtain the consent of the Indenture Trustee to any amendment or waiver or any provision of any document where the making of such amendment or the giving of such waiver without obtaining the consent of the Indenture Trustee is not prohibited by this Indenture or by the terms of the document that is the subject of the proposed amendment or waiver.

 

ARTICLE X

 

REDEMPTION OF NOTES

 

Section 10.01   Redemption.  The Majority Residual Interestholders (as defined in the Owner Trust Agreement) may, at its option, effect an early redemption of the Notes on any Payment Date on or after the Payment Date on which the Pool Principal Balance declines to ___% or less of the Original Pool Principal Balance.  The [Securities Insurer or the] Master 

 

  

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Servicer may, at their respective options, effect an early termination of the Notes on any Payment Date on which the Pool Principal Balance declines to ___% or less of the Original Pool Principal Balance.  The Majority Residual Interestholders, the Servicer [or the Securities Insurer], as applicable, shall effect such early termination in the manner specified in and subject to the provisions of Section 11.02(b) of the Sale and Servicing Agreement.

 

The Master Servicer or the Issuing Entity shall furnish the Rating Agencies, the Servicer [and, if redemption is effected by the Majority Residual Interestholders, the Securities Insurer] notice of any such redemption in accordance with Section 10.02 hereof.

 

Section 10.02   Form of Redemption Notice.  Notice of redemption under Section 10.01 hereof shall be given by the Indenture Trustee by first-class mail, postage prepaid, or by facsimile mailed or transmitted not later than 10 days prior to the applicable Redemption Date to [the Securities Insurer and] each Holder of Notes, as of the close of business on the Record Date preceding the applicable Redemption Date, at such Holder’s address or facsimile number appearing in the Note Register.

 

All notices of redemption shall state:

 

(i)           the Redemption Date;

 

(ii)          that on the Redemption Date Noteholders shall receive the Note Redemption Amount; and

 

(iii)         the place where such Notes are to be surrendered for payment of the Termination Price (which shall be the office or agency of the Issuing Entity to be maintained as provided in Section 3.02 hereof).

 

Notice of redemption of the Notes shall be given by the Indenture Trustee in the name of the Issuing Entity and at the expense of the Master Servicer.  Failure to give to any Holder of any Note notice of redemption, or any defect therein, shall not impair or affect the validity of the redemption of any other Note.

 

Section 10.03   Notes Payable on Redemption Date; Provision for Payment of Indenture Trustee [and Securities Insurer].  The Notes to be redeemed shall, following notice of redemption as required by Section 10.02 hereof (in the case of redemption pursuant to Section 10.01) hereof, on the Redemption Date become due and payable at the Note Redemption Amount and (unless the Issuing Entity shall default in the payment of the Note Redemption Amount) no interest shall accrue thereon for any period after the date to which accrued interest is calculated for purposes of calculating the Note Redemption Amount.  The Issuing Entity may not redeem the Notes unless (i) all outstanding obligations under the Notes have been paid in full and (ii) the Indenture Trustee has been paid all amounts to which it is entitled hereunder [and the Securities Insurer has been paid all Securities Insurer Reimbursement Amounts to which it is entitled as of the applicable Redemption Date].

 

  

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ARTICLE XI

 

MISCELLANEOUS

 

Section 11.01   Compliance Certificates and Opinions, Etc.

 

(a)           Upon any application or request by the Issuing Entity to the Indenture Trustee to take any action under any provision of this Indenture (except with respect to the Master Servicer’s servicing activity in the ordinary course of its business), the Issuing Entity shall furnish to the Indenture Trustee [and the Securities Insurer] (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA) an Independent Certificate from a firm of certified public accountants meeting the applicable requirements of this Section, except that, in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.

 

Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:

 

(1)           a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;

 

(2)           a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;

 

(3)           a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and

 

(4)           a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.

 

(b)           Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien of this Indenture, the Issuing Entity shall, in addition to any obligation imposed in Section 11.01(a) hereof or elsewhere in this Indenture, furnish to the Indenture Trustee [and the Securities Insurer] an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such deposit) to the Issuing Entity of the Collateral or other property or securities to be so deposited.

 

(c)           Whenever the Issuing Entity is required to furnish to the Indenture Trustee [and the Securities Insurer] an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in Subsection (b) above, the Issuing Entity shall also deliver 

 

  

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to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuing Entity of the securities to be so deposited and of all other such securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuing Entity, as set forth in the certificates delivered pursuant to Subsection (b) above and this Subsection (c), is ___% or more of the Outstanding Amount of the Notes, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuing Entity as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the Outstanding Amount of the Notes.

 

(d)           Whenever any property or securities are to be released from the lien of this Indenture, the Issuing Entity shall also furnish to the Indenture Trustee [and the Securities Insurer] an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.

 

(e)           Whenever the Issuing Entity is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in Subsection (d) above, the Issuing Entity shall also furnish to the Indenture Trustee [and the Securities Insurer] an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property, other than securities released from the lien of this Indenture since the commencement of the then-current calendar year, as set forth in the certificates required by Subsection (d) above and this Subsection (e), equals ___% or more of the Outstanding Amount of the Notes, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than $25,000 or less than one percent of the then Outstanding Amount of the Notes.

 

Section 11.02   Form of Documents Delivered to Indenture Trustee.  In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.

 

Any certificate or opinion of an Authorized Officer of the Issuing Entity may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which such officer’s certificate or opinion is based are erroneous.  Any such certificate of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, the Master Servicer, the Transferor, the Issuing Entity or the Administrator, stating that the information with respect to such factual matters is in the possession of the Servicer, the Master Servicer, the Transferor, the Issuing Entity or the Administrator, unless such counsel knows, or in the exercise of reasonable 

 

  

57

  

 

care should know, that the certificate or opinion or representations with respect to such matters are erroneous.

 

Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument.

 

Whenever in this Indenture, in connection with any application or certificate or report to the Indenture Trustee, it is provided that the Issuing Entity shall deliver any document as a condition of the granting of such application, or as evidence of the Issuing Entity’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 Issuing Entity to have such application granted or to the sufficiency of such certificate or report.  The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI hereof.

 

Section 11.03   Acts of Noteholders.

 

(a)           Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuing Entity.  Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments.  Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in favor of the Indenture Trustee and the Issuing Entity, if made in the manner provided in this Section 11.03.

 

(b)           The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.

 

(c)           The ownership of Notes shall be proved by the Note Register.

 

(d)           Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuing Entity in reliance thereon, whether or not notation of such action is made upon such Note.

 

Section 11.04   Notices, Etc., to Indenture Trustee, Issuing Entity, Rating Agencies [and Securities Insurer.  Any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture shall be in 

 

  

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writing and if such request, demand, authorization, direction, notice, consent, waiver or act of Noteholders is to be made upon, given or furnished to or filed with:

 

(i)           the Indenture Trustee by any Noteholder[, the Securities Insurer] or by the Issuing Entity shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Indenture Trustee at its Corporate Trust Office, or

 

(ii)           the Issuing Entity by the Indenture Trustee[, the Securities Insurer] or by any Noteholder shall be sufficient for every purpose hereunder if in writing and made, given, furnished or filed with the Issuing Entity addressed to:

 

	
  

	
_______ Home Loan Owner Trust 20__-_,

	
  

	
in care of

 

_________________________

_________________________

_________________________

 

or at any other address previously furnished in writing to the Indenture Trustee by the Issuing Entity or the Administrator.  The Issuing Entity shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee.

 

Notices required to be given to the Rating Agencies by the Issuing Entity, the Indenture Trustee[, the Securities Insurer] or the Owner Trustee shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to

 

in the case of ________, at the following address:

 

__________________________

__________________________

__________________________

 

and

 

in the case of ________:

 

__________________________

__________________________

__________________________

 

[Notices required to be given to the Securities Insurer by the Issuing Entity, the Indenture Trustee or the Owner Trustee shall be in writing, personally delivered or mailed by certified mail, return receipt requested, to the following address:

 

__________________________

__________________________

__________________________

  

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Re:  ______ Home Loan Owner Trust 20__-_,

Telephone No.:  ____________,

 

or at such other address as shall be designated by written notice to the other parties.]

 

Notices required to be given to the Master Servicer by the Issuing Entity, the Indenture Trustee[, the Securities Insurer] or the Owner Trustee shall be in writing, personally delivered or mailed by certified mail, return receipt requested to the following address:

 

__________________________

__________________________

__________________________

 

or to such other address as shall be designated by written notice to the other parties.

 

Notices required to be given to the Depositor by the Issuing Entity, the Indenture Trustee[, the Securities Insurer] or the Owner Trustee shall be in writing, personally delivered or mailed by certified mail, return receipt requested to the following address:

 

[__________________________________]

[200 Park Avenue

New York, New York 10166]

Attention:  [_________________]

 

or to such other address as shall be designated by written notice to the other parties.

 

Section 11.05   Notices to Noteholders; Waiver.  Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at his address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice.  In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have duly been given.

 

Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.  Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.

 

In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.

 

  

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Where this Indenture provides for notice to the Rating Agencies, failure to give such notice shall not affect any other rights or obligations created hereunder, and shall not under any circumstance constitute a Default or Event of Default.

 

Section 11.06   Conflict With Trust Indenture Act.  If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.

 

The provisions of TIA Sections 310 through 317 that impose duties on any person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.

 

Section 11.07   Effect of Headings and Table of Contents.  The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof.

 

Section 11.08   Successors and Assigns.  All covenants and agreements in this Indenture and the Notes by the Issuing Entity shall bind its successors and assigns, whether so expressed or not.  All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.

 

Section 11.09   Separability.  In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 11.10   Benefits of Indenture.  Nothing in this Indenture or in the Notes, express or implied, shall give to any Person (other than the parties hereto and their successors hereunder, the Noteholders, any other party secured hereunder, any other Person with an ownership interest in any part of the Collateral) any benefit or any legal or equitable right, remedy or claim under this Indenture[, except that the Securities Insurer is an express third party beneficiary to this Indenture as provided in Section 11.19].

 

Section 11.11   Legal Holidays.  In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.

 

Section 11.12   Governing Law.  THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

 

  

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Section 11.13   Counterparts.  This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

 

Section 11.14   Recording of Indenture.  If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuing Entity and at the expense of the Master Servicer accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee [and the Securities Insurer]) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.

 

Section 11.15   Owner Trust Obligation.  No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuing Entity, the Owner Trustee or the Indenture Trustee on the Notes or, except as expressly provided for in Article VI hereof, under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuing Entity 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 Issuing Entity, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may expressly have agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity.  For all purposes of this Indenture, in the performance of any duties or obligations of the Issuing Entity hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Owner Trust Agreement.

 

Section 11.16   No Petition.  The Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree that they will not at any time institute against the Transferor, the Servicer, the Master Servicer or the Issuing Entity, or join in any institution against the Transferor, the Servicer, the Master Servicer or the Issuing Entity of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law, in connection with any obligations relating to the Notes, this Indenture or any of the Basic Documents.

 

Section 11.17   Inspection.  The Issuing Entity agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee [or the Securities Insurer], during the Issuing Entity’s normal business hours, to examine all the books of account, records, reports and other papers of the Issuing Entity, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuing Entity’s affairs, finances and accounts with the Issuing Entity’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may reasonably be requested.  The Indenture Trustee shall and shall cause its representatives to hold 

 

  

62

  

 

in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.

 

Section 11.18   [Grant of Noteholder Rights to Securities Insurer.  In consideration for the guarantee of the Notes by the Securities Insurer pursuant to the Guaranty Policy, the Noteholders hereby grant to the Securities Insurer the right to act as the holder of 100% of the outstanding Notes for the purpose of exercising the rights of the Holders of the Notes hereunder, including the voting rights of such Holders, but excluding those rights requiring the consent of all such Holders under Section 9.02 and any rights of such Holders to payments under Section 8.02 hereof; provided that the preceding grant of rights to the Securities Insurer by the Noteholders shall be subject to Section 11.20 hereof.  The rights of the Securities Insurer to direct certain actions and consent to certain actions of the Noteholders hereunder will terminate at such time as the Note Principal Balance of the Notes has been reduced to zero and the Securities Insurer has been reimbursed for all Insured Payments and any other amounts owed under the Guaranty Policy and the Insurance Agreement, the Securities Insurer has no further obligation under the Guaranty Policy and the Guaranty Policy has been surrendered to the Securities Insurer.

 

Section 11.19   Third Party Beneficiary.  The parties hereto acknowledge that the Securities Insurer is an express third party beneficiary hereof entitled to enforce any rights reserved to it hereunder as if it were actually a party hereto.

 

Section 11.20   Suspension and Termination of Securities Insurer’s Rights.

 

(a)           During the continuation of a Securities Insurer Default, rights granted or reserved to the Securities Insurer hereunder shall vest instead in the Noteholders; provided that the Securities Insurer shall be entitled to any payments in reimbursement of the Securities Insurer Reimbursement Amount, and the Securities Insurer shall retain those rights under Sections 9.01 and 9.02 hereof to consent to any supplement to this Indenture.

 

(b)           At such time as the Note Principal Balance of the Notes has been reduced to zero and the Securities Insurer has been reimbursed for all Insured Payments and any other amounts owed under the Guaranty Policy and the Insurance Agreement (and the Securities Insurer no longer has any obligation under the Guaranty Policy, except for breach thereof by the Securities Insurer), then the rights and benefits granted or reserved to the Securities Insurer hereunder (including the rights to direct certain actions and receive certain notices) shall terminate and the Noteholders shall be entitled to the exercise of such rights and to receive such benefits of the Securities Insurer following such termination to the extent that such rights and benefits are applicable to the Noteholders.]

 

[SIGNATURE PAGE FOLLOWS]

 

  

63

  

IN WITNESS WHEREOF, the Issuing Entity and the Indenture Trustee have caused this Indenture to be duly executed by their respective officers, thereunto duly authorized and duly attested, all as of the day and year first above written.

 

 

	 	__________ HOME LOAN	 
	 	
OWNER TRUST 20__-_

	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	
not in its individual capacity but

	 
	 	 	
solely as Owner Trustee

	 
	 	 	 	 

 

	
 

	
By: 

	 	 
	 	 	
Name:

	 
	 	 	
Title:

	 
	 	 	 	 
	 	
not in its individual capacity, but solely as 

Indenture Trustee

	 

 

	
 

	
By: 

	 	 
	 	 	
Name:

	 
	 	 	
Title:

	 

 

  

64

  

 

 

	 STATE OF	)
	 	)ss.:
	 COUNTY OF	)

 

 

BEFORE ME, the undersigned authority, a Notary Public in and for said county and state, on this day personally appeared __________________________, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said _______________________, not in its individual capacity, but solely as Owner Trustee on behalf of ___________ HOME LOAN OWNER TRUST 20__-_, a Delaware business trust, and that such person executed the same as the act of said business trust for the purpose and consideration therein expressed, and in the capacities therein stated.

 

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of _______, 20__.

 

 

 

	 	 ______________________________________
	 	Notary Public

 

 

[SEAL]

 

My commission expires:

 

____________________________

  

65

  

 

	 STATE OF	)
	 	)ss.:
	 COUNTY OF	)

 

BEFORE ME, the undersigned authority, a Notary Public in and for said county and state, on this day personally appeared __________________________, known to me to be the person and officer whose name is subscribed to the foregoing instrument and acknowledged to me that the same was the act of the said _______________________, not in its individual capacity, but solely as Owner Trustee on behalf of ___________ HOME LOAN OWNER TRUST 20__-_, a Delaware business trust, and that such person executed the same as the act of said business trust for the purpose and consideration therein expressed, and in the capacities therein stated.

 

GIVEN UNDER MY HAND AND SEAL OF OFFICE, this ____ day of _______, 20__.

 

 

	 	 ______________________________________
	 	Notary Public

 

 

[SEAL]

 

My commission expires:

 

____________________________

 

 

  

66

  

 

EXHIBIT A

 

FORM OF NOTE

 

NOTE

 

Unless this Note is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Issuing Entity 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.

 

EACH TRANSFEREE OF THIS NOTE OR A BENEFICIAL INTEREST HEREIN THAT IS A PLAN, OR IS A PERSON ACTING ON BEHALF OF OR INVESTING THE ASSETS OF A PLAN, SHALL BE DEEMED TO REPRESENT THAT THE RELEVANT CONDITIONS FOR EXEMPTIVE RELIEF UNDER AT LEAST ONE OF THE FOLLOWING PROHIBITED TRANSACTION CLASS EXEMPTIONS HAVE BEEN SATISFIED:  PROHIBITED TRANSACTION CLASS EXEMPTION (“PTCE”) 96-23 (RELATING TO TRANSACTIONS EFFECTED BY AN “IN-HOUSE ASSET MANAGER”), PTCE 95-60 (RELATING TO TRANSACTIONS INVOLVING INSURANCE COMPANY GENERAL ACCOUNTS), PTCE 91-38 (RELATING TO TRANSACTIONS INVOLVING BANK COLLECTIVE INVESTMENT FUNDS), PTCE 90-1 (RELATING TO TRANSACTIONS INVOLVING INSURANCE COMPANY POOLED SEPARATE ACCOUNTS) AND PTCE 84-14 (RELATING TO TRANSACTIONS EFFECTED BY A “QUALIFIED PROFESSIONAL ASSET MANAGER”).

 

THE PRINCIPAL OF THIS NOTE IS PAYABLE 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.

 

 

 

 

 

 

 

  

A-1

  

 

$[---------------]

	No. ___	 CUSIP NO. _____

 

____________ HOME LOAN OWNER TRUST 20__-_

HOME LOAN ASSET BACKED NOTE

 

____________ HOME LOAN OWNER TRUST 20__-_, a business trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuing Entity”), 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 the initial principal amount of this Note and the denominator of which is the aggregate principal amount of all Notes by (ii) the aggregate amount, if any payable from the Note Payment Account in respect of principal on the Notes pursuant to Section 5.01(d) and (e) of the Sale and Servicing Agreement; provided, however, that the entire unpaid principal amount of this Note shall be due and payable on the earlier of (i) the applicable Maturity Date, (ii) the date of termination, if any, pursuant to Section 11.01 of the Sale and Servicing Agreement, (iii) the date on which either the Majority Residual Interestholders[, the Securities Insurer] or the Servicer, as applicable, exercises its option to terminate the Issuing Entity pursuant to Section 11.02 of the Sale and Servicing Agreement or (iv) the date on which an Event of Default shall have occurred and be continuing if [the Securities Insurer declares the Notes due and payable, or, if a Securities Insurer Default has occurred and is continuing, then if] the Indenture Trustee declares or is directed by the Majority Noteholders to declare the Notes to be immediately due and payable, in each case 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 (the “Indenture”) dated as of __________, 20__ between the Issuing Entity and ______________________________, a ____________________, which also contains rules as to construction that shall be applicable herein.

 

The Issuing Entity will pay interest on this Note at a per annum rate equal to the lesser of (i) One-Month LIBOR plus ____%, provided any Payment Date after the Call Option Date, this rate shall be One-month LIBOR plus ____% and (ii) the Net Interest Rate.

 

Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.

 

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 Issuing Entity with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.

 

Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.

 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any 

 

  

A-2

  

 

benefit under the Indenture referred to on the reverse hereof, or be valid or obligatory for any purpose.

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

A-3

  

IN WITNESS WHEREOF, the Issuing Entity has caused this instrument to be signed, manually or in facsimile, by its Authorized Officer, as of the date set forth below.

 

Date: ______________, 20__

 

	 	
___________ HOME LOAN OWNER TRUST 20__-_

	 
	 	 	 
	 	 	 	 
	
 

	
By: 

	 	 
	 	 	
not in its individual capacity but solely as 

Owner Trustee under the Owner Trust 

Agreement

	 
	 	 	 	 
	 	By:	 	 
	 	 	
Authorized Signatory

	 

 

 

 

INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the Notes designated above and referred to in the within-mentioned Indenture.

 

 

	Date: ______________, 20__	 	 
	 	 	 
	 	 	__________________________,
	 	 	not in its individual capacity but
	 	 	solely as Indenture Trustee
	 	 	 
	 	By:	 
	 	 	
Authorized Signatory

 

 

 

 

  

A-4

  

 

[REVERSE OF NOTE]

 

This Note is one of a duly authorized issue of Notes of the Issuing Entity, designated as its Home Loan Asset Backed Notes (herein called the “Notes”), as 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 Issuing Entity, the Indenture Trustee and the Holders of the Notes.  The Notes are subject to all terms of the Indenture.

 

The Notes will be secured by the collateral pledged as security therefor as provided in the Indenture.

 

Principal of the Notes will be payable on each Payment Date in an amount described on the face hereof.  “Payment Date” means the _____ day of each month, or, if any such date is not a Business Day, the next succeeding Business Day, commencing in _______ 20__.

 

As described on the face hereof, the entire unpaid principal amount of this Note shall be due and payable on the earlier of the applicable Maturity Date, the optional termination of the Issuing Entity pursuant to Section 11.02 of the Sale and Servicing Agreement and the termination of the Sale and Servicing Agreement pursuant to Section 11.01(a) thereof.  Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable on the date on which an Event of Default shall have occurred and be continuing and [if the Securities Insurer declares the Notes due and payable, or if a Securities Insurer Default has occurred and is continuing,] if the Indenture Trustee declares, or is directed by the Majority Noteholders to declare, 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 holders of the Notes entitled thereto.

 

Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date, except that with respect to Notes registered on the Record Date in the name of the nominee of the 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.  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 Issuing Entity, will notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable 

 

  

A-5

  

 

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 located in _______________________________.

 

[__________________________, as the Securities Insurer, has issued a Guaranty Policy for the benefit of the Noteholders, which policy guarantees payments on each Payment Date to the Indenture Trustee for the benefit of the Noteholders of the related Noteholders’ Interest Payment Amount and the Noteholders’ Principal Deficiency Amount then payable on the Notes.  Unless a Securities Insurer Default shall be continuing, the Securities Insurer shall be deemed to be the Holder of 100% of the outstanding Notes for the purpose of exercising certain rights, including voting rights, of the Noteholders under the Indenture and the Sale and Servicing Agreement.  In addition, on each Payment Date, after the Noteholders have been paid all amounts to which they are entitled, the Securities Insurer will be entitled to be reimbursed for any unreimbursed Insured Payments and any other amounts owed under the Guaranty Policy.]

 

As provided in the Indenture and the Sale and Servicing Agreement, the Notes may be redeemed in whole, but not in part, (a) at the option of the holders of greater than 50% of the Residual Interest Certificates on any Payment Date on and after the date on which the Pool Principal Balance is less than ___% of the Original Pool Principal Balance or (b) at the option of [the Securities Insurer or] the Servicer on any Payment Date on and after the date on which the Pool Principal Balance is less than ___% of the Original Pool Principal 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 Issuing Entity 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 to a Holder [or the Securities Insurer] for any registration of transfer or exchange of this Note, but the Issuing Entity may require 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.

 

Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note 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 Issuing Entity, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuing Entity 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 Issuing Entity, 

 

  

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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 Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not at any time institute against the Transferor, the Servicer, the Master Servicer or the Issuing Entity, or join in any institution against the Transferor, the Servicer, the Master Servicer or the Issuing Entity of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the Basic Documents.

 

The Issuing Entity 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 Issuing Entity secured by the Trust Estate.  Each Noteholder, by acceptance of a Note (and each Note 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 Issuing Entity.

 

Prior to the due presentment for registration of transfer of this Note, the Issuing Entity[, the Securities Insurer], the Indenture Trustee and any agent of the Issuing Entity[, the Securities Insurer] 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 Issuing Entity[, the Securities Insurer], 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 Issuing Entity and the rights of the Holders of the Notes under the Indenture at any time by the Issuing Entity with the consent of the Rating Agencies[, the Securities Insurer (provided that no Securities Insurer Default has occurred and is continuing)] and the Holders of Notes representing not less than a majority of the Outstanding Notes.  The Indenture also contains provisions permitting the [Securities Insurer, or if a Securities Insurer Default has occurred and is continuing,] the Holders of Notes representing not less than a majority of the Outstanding Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuing Entity with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Note (or any one 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 Indenture Trustee [or the Securities Insurer] to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of the Notes issued thereunder.

 

  

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The term “Issuing Entity” as used in this Note includes any successor to the Issuing Entity under the Indenture.

 

The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.

 

This Note and the Indenture shall be construed in accordance with the laws of the State of New York, without reference to its conflict of law provisions, and the obligations, rights and remedies of the parties hereunder and thereunder shall be determined in accordance with such laws.

 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuing Entity, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed.

 

Anything herein to the contrary notwithstanding, except as expressly provided in the Basic Documents, none of the Issuing Entity in its individual capacity, the Owner Trustee in its individual capacity, any owner of a beneficial interest in the Issuing Entity, or any of their respective partners, beneficiaries, agents, officers, directors, employees or successors or assigns shall be personally liable for, nor shall recourse be had to any of them for, the payment of principal of or interest on this Note or performance of, or omission to perform, any of the covenants, obligations or indemnifications contained in the Indenture.  The Holder of this Note by its acceptance hereof agrees that, except as expressly provided in the Basic Documents, in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein shall be taken to prevent recourse to, and enforcement against, the assets of the Issuing Entity for any and all liabilities, obligations and undertakings contained in the Indenture or in this Note.

 

 

 

 

 

 

 

  

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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.

 

 

 

 

 

 

 

 

 

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