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Household Mortgage Loan Trust 2004-HC1
·
8-K
Sep 8, 5:23 PM ET
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Household Mortgage Loan Trust 2004-HC1 8-K
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Contents
311
ARTICLE I
DEFINITIONS
Section 1.1. Definitions.
(a) For all purposes of this Indenture, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Sale and Servicing Agreement. All other capitalized terms used herein shall have the meanings specified herein.
Section 1.2. Incorporation by Reference of Trust Indenture Act. 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:
Section 1.3. Rules of Construction.
ARTICLE II
THE NOTES
Section 2.1. Form. The Notes shall be designated as the “HOUSEHOLD MORTGAGE LOAN TRUST 2004-HC1, Closed-End Mortgage Loan Asset Backed Notes, Series 2004-HC1”. Each Note shall be in substantially the form set forth in Exhibit A or Exhibit B, as applicable, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and which do not affect the rights, duties or obligations of the Administrator without the consent of the Administrator, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistent 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.
Section 2.2. Execution, Authentication, Delivery and Dating. The Notes shall be executed on behalf of the Issuer by an Authorized Officer of the Issuer. The signature of any such Authorized Officer on the Notes may be manual or facsimile.
Section 2.3. Registration; Registration of Transfer and Exchange. The Issuer shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Administrator initially shall be the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided. Upon any resignation of any Note Registrar, the Issuer shall promptly appoint a successor or, if it elects not to make such an appointment, assume the duties of the Note Registrar.
Section 2.4. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note is surrendered to the Administrator or the Note Registrar, or the Administrator or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (ii) there is delivered to the Note Registrar and the Administrator such security or indemnity as may be reasonably required by it to hold the Issuer, the Administrator and the Note Registrar harmless, then, in the absence of notice to the Issuer, the Note Registrar or the Administrator that such Note has been acquired by a bona fide purchaser, and an Authorized Officer of the Issuer shall execute, and upon its request the Administrator 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 Issuer may pay such destroyed, lost or stolen Note when so due or payable or upon the Redemption Date without surrender thereof. If, after the delivery of such replacement Note or payment of a destroyed, lost or stolen Note pursuant to the proviso to the preceding sentence, a bona fide purchaser of the original Note in lieu of which such replacement Note was issued presents for payment such original Note, the Issuer, the Administrator and the Note Registrar shall be entitled to recover such replacement Note (or such payment) from the Person to whom it was delivered or any Person taking such replacement Note from such Person to whom such replacement Note was delivered or any assignee of such Person, except a bona fide purchaser, and shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expense incurred by the Issuer or the Administrator in connection therewith.
Section 2.5. Persons Deemed Owner. Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee, the Administrator, the Note Registrar and any agent of the Issuer, the Indenture Trustee, the Administrator or the Note Registrar may treat
Section 2.6. Payment of Principal and Interest.
(a) Each Note shall accrue interest at the related Note Rate and such interest shall be payable on each Payment Date as specified in Exhibit A or Exhibit B hereto, as applicable, subject to Section 3.1 hereof. Any installment of interest or principal, if any, payable on any Note that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date in the manner set forth in Section 5.01(c) of the Sale and Servicing Agreement.
(b) The principal of each Note shall be payable in installments on each Payment Date as provided in the forms of the Notes set forth in Exhibit A or Exhibit B hereto, as applicable. Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable, if not previously paid, on the earliest of (i) the Final Scheduled Payment 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 Holders of Notes representing not less than 66- 2/3% of the Outstanding Amount of the Notes have declared the Notes to be immediately due and payable in the manner provided in Section 5.2 hereof. All principal payments on the Notes shall be in the manner set forth in the Sale and Servicing Agreement. Upon receiving notice from the Issuer, the Administrator shall notify the Person in whose name a Note is registered at the close of business on the Record Date preceding the Payment Date on which the Issuer expects that the final installment of principal of and interest on such Note will be paid. Such notice shall be mailed or transmitted by facsimile prior to such final 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. Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 8.01 of the Sale and Servicing Agreement.
Section 2.7. Cancellation. All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Administrator, be delivered to the Note Registrar and shall be promptly canceled by the Note Registrar. The Issuer may at any time deliver to the Note Registrar for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Note Registrar. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section, except as expressly permitted by this Indenture. All canceled Notes may be held or disposed of by the Note Registrar in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it; provided, that such Issuer Order is timely and the Notes have not been previously disposed of by the Note Registrar.
Section 2.8. [Reserved].
Section 2.9. Release of Trust Estate.
(a) Except as otherwise provided in subsections (b) and (c) of this Section 2.9 and Section 11.1 hereof and the terms of the Transaction 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)(l) 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 Master Servicer, on behalf of the Issuer, shall be entitled to obtain a release from the lien of this Indenture for any Mortgage Loan and the related Mortgaged Property at any time in accordance with the provisions of Section 3.08 of the Sale and Servicing Agreement.
(c) The Indenture Trustee shall, if requested by the Master Servicer, temporarily release to the Master Servicer any Mortgage File pursuant to the provisions of Section 3.08 of the Sale and Servicing Agreement upon compliance by the Master Servicer of the provisions thereof provided that such Mortgage File shall have been stamped to signify the Issuer’s pledge to the Indenture Trustee under the Indenture.
Section 2.10. Book-Entry Notes. The Notes, upon original issuance, 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 or its custodian, by, or on behalf of, the Issuer. The Book-Entry Notes shall be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner thereof will receive a definitive Note representing such Note Owner’s interest in such Note, except as provided in Section 2.12 below. Unless and until definitive, fully registered Notes (the “Definitive Notes”) have been issued to such Note Owners pursuant to Section 2.12 below:
Section 2.11. Notices to Clearing Agency. Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to such Note Owners pursuant to Section 2.12, the Indenture Trustee or the Administrator, as the case may be, 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 Clearing Agency or the Depositor advises the Indenture Trustee or the Administrator in writing that the Clearing Agency is no longer willing, qualified or able to properly discharge its responsibilities with respect to the Book-Entry Notes and none of the Clearing Agency, the Depositor, the Issuer or the Indenture Trustee is able to locate a qualified successor, (ii) the Depositor at its option advises the Indenture Trustee and the Administrator in writing that it elects to initiate the termination of 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 51% of the Outstanding Amount of such 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 Indenture Trustee and the Administrator of the occurrence of such event and of the availability of Definitive Notes to Note Owners requesting the same. Upon surrender to the Administrator of the typewritten Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer shall execute and the Administrator shall authenticate the Definitive Notes in accordance with the instructions of the Clearing Agency. None of the Issuer, the Note Registrar, the Indenture Trustee or the Administrator shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Notes, the Indenture Trustee, the Administrator and the Note Registrar shall recognize the Holders of the Definitive Notes as Noteholders.
Section 2.13. Tax Treatment. The Issuer has entered into this Indenture, and the Notes will be issued, with the intention that, for all tax purposes, the Notes will qualify as indebtedness secured by the Trust Estate. The Issuer, by entering into this Indenture, and each Noteholder, by its acceptance of a Note (and each Note Owner by its acceptance of an interest in the applicable Book-Entry Note), agree to treat the Notes for all purposes as indebtedness of the Issuer.
Section 2.14. ERISA Representation. Each Person that acquires a Note shall be required to represent, or in the case of a Book-Entry Note, will be deemed to represent by its acceptance
ARTICLE III
COVENANTS
Section 3.1. Payment of Principal and Interest. The Issuer will duly and punctually pay (or will cause to be duly and punctually paid) the principal of and interest, if any, on the Notes in accordance with the terms of the Notes and this Indenture. Without limiting the foregoing, on each Payment Date, the Administrator or the Paying Agent shall, pursuant to Section 5.01 of the Sale and Servicing Agreement, pay all amounts on deposit in the Collection Account pursuant to the Sale and Servicing Agreement. Amounts properly withheld under the Code by any Person from a payment to any Noteholder of interest and/or principal shall be considered as having been paid by the Issuer to such Noteholder for all purposes of this Indenture.
Section 3.2. Maintenance of Office or Agency. The Issuer will maintain in New York, New York an office or agency where Notes may be surrendered for registration of transfer or exchange, and where notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be served. The Issuer hereby initially appoints the Administrator to serve as its agent for the foregoing purposes and to serve as Paying Agent with respect to the Notes. If at any time the Issuer shall fail to maintain any such office or agency or shall fail to furnish the Administrator with the address thereof, such surrenders, notices and demands may be made or served at the Corporate Trust Office of the Administrator, and the Issuer hereby appoints the Administrator as its agent to receive all such surrenders, notices and demands.
Section 3.3. Money for Payments To Be Held in Trust. As provided in Section 8.2(a) and (b), all payments of amounts due and payable with respect to any Notes that are to be remitted from amounts withdrawn from the Collection Account pursuant to Section 8.2(c) shall be made on behalf of the Issuer by the Indenture Trustee, by the Paying Agent or the Administrator, and no amounts so withdrawn from the Collection Account for payments on the Notes shall be paid over to the Issuer.
Section 3.4. Existence.
(a) Subject to Section 3.4(b) below, the Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States of America, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes and the Trust Estate.
(b) Any successor to the Owner Trustee or the Delaware Trustee appointed pursuant to Section 10.2 of the Trust Agreement shall be the successor Owner Trustee or successor Delaware Trustee, respectively, under this Indenture without the execution or filing of any paper, instrument or further act to be done on the part of the parties hereto.
(c) Upon any consolidation or merger of or other succession to the Owner Trustee, the Person succeeding to the Owner Trustee under the Trust Agreement may exercise every right and power of the Owner Trustee under this Indenture with the same effect as if such Person had been named as the Owner Trustee herein.
Section 3.5. Protection of Trust Estate. The Issuer and the Co-Trustee will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action necessary or advisable to:
Section 3.6. Annual Opinions as to the Trust Estate.
Section 3.7. Performance of Obligations; Servicing of Mortgage Loans.
(a) The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s material covenants or obligations under any instrument or agreement included in the Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture, the Sale and Servicing Agreement or such other instrument or agreement.
(b) The Issuer may contract with or otherwise obtain the assistance of other Persons to assist it in performing its duties under this Indenture, and any performance of such duties by a Person identified to the Indenture Trustee in an Officer’s Certificate of the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer will punctually perform and observe all of its obligations and agreements contained in this Indenture, the Transaction Documents and in the instruments and agreements included in the Trust Estate, 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, the Transfer Agreement 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 and the Transfer Agreement, in accordance with and within the time periods provided for in this Indenture and/or the Sale and Servicing Agreement, as applicable. Except as otherwise expressly provided therein, the Issuer shall not waive, amend, modify, supplement or terminate any Transaction Document or any provision thereof without the consent of the Indenture Trustee and the Majority Noteholder or such other percentage of Noteholders as is set forth in the applicable Transaction Document.
(d) Subject to the terms of the Sale and Servicing Agreement, if the Issuer shall have knowledge of the occurrence of a Master Servicer Termination Event under the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture Trustee, the Depositor, the Master Servicer and the Rating Agencies thereof, and shall specify in such notice the action, if any, the Master Servicer is taking with respect of such default. If such a Master Servicer Termination Event 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 Mortgage Loans, the
(e) Subject to the terms of the Sale and Servicing Agreement, as promptly as possible after the giving of notice of termination to the Master Servicer of the Master Servicer’s rights and powers pursuant to Section 7.01 of the Sale and Servicing Agreement, a successor master servicer (the “Successor Master Servicer”) shall be appointed pursuant to Section 7.02 of the Sale and Servicing Agreement. If the Indenture Trustee shall succeed to the Master Servicer’s duties as master servicer of the Mortgage Loans as provided therein, it shall do so in its individual capacity and not in its capacity as Indenture Trustee and, accordingly, the provisions of Article VI hereof shall be inapplicable to the Indenture Trustee in its duties as Successor Master Servicer and the servicing of the Mortgage Loans. In case the Indenture Trustee shall become Successor Master Servicer under the Sale and Servicing Agreement, the Indenture Trustee shall be entitled to appoint as Successor Master Servicer any one of its Affiliates, provided that it shall be fully liable for the actions and omissions of such Affiliate in such capacity as Successor Master Servicer.
(f) Without derogating from the absolute nature of the assignment granted to the Indenture Trustee under this Indenture or the rights of the Indenture Trustee hereunder, the Issuer agrees (i) that it will not, without the prior written consent of the Indenture Trustee (which consent shall not be unreasonably withheld), amend, modify, waive, supplement, terminate or surrender, or agree to any amendment, modification, supplement, termination, waiver or surrender of, the terms of the Trust Estate (except to the extent otherwise provided in the Sale and Servicing Agreement or the other Transaction Documents), or waive timely performance or observance by the Master Servicer or the Depositor under the Sale and Servicing Agreement; and (ii) that any such amendment (not otherwise provided for in the Sale and Servicing Agreement or the other Transaction Documents) shall not (A) reduce in any manner the amount of, or delay the timing of, collections of payments on mortgage loans, (B) reduce in any manner the amount of, or delay the timing of, payments that are required to be made on a Note without the consent of the affected Noteholder, (C) impair the right of any Noteholder to institute suit for the enforcement of the provisions of the Sale and Servicing Agreement, or (D) reduce the aforesaid percentage of the Notes that is required to consent to any such amendment, without the consent of the Holders of all the outstanding Notes. If any such amendment, modification, supplement or waiver shall be so consented to by the Indenture Trustee or the Majority Noteholder (or such other percentage of Noteholders as required by the applicable Transaction Document), the Issuer agrees, promptly following a request by the Indenture Trustee 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 3.8. Negative Covenants. So long as any Notes are Outstanding, the Issuer shall not:
Section 3.9. Annual Statement as to Compliance. The Issuer will deliver to the Indenture Trustee, within 120 days after the end of each fiscal year of the Issuer (commencing with the fiscal year 2004), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:
Section 3.10. Covenants of the Issuer.
Section 3.11. Master Servicer’s Obligations. The Issuer shall cause the Master Servicer to comply with its obligations under the terms of the Sale and Servicing Agreement.
Section 3.12. Restricted Payments. The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee, the Delaware Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Master Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made payments or distributions to the Master Servicer, the Indenture Trustee, the Owner Trustee, the Delaware Trustee, the Administrator, the Ownership Interest and the Noteholders as contemplated by, and to the extent funds are available for such purpose under, the Sale and Servicing Agreement or the Trust Agreement. The Issuer 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 Transaction Documents.
Section 3.13. Treatment of Notes as Debt for All Purposes.
Section 3.14. Notice of Events of Default. The Issuer shall give the Indenture Trustee, the Administrator and the Rating Agencies prompt written notice of each Event of Default hereunder. The Issuer shall also give the Indenture Trustee, the Administrator and the Rating Agencies prompt written notice of each default on the part of the Depositor of its obligations under the Sale and Servicing Agreement.
Section 3.15. Further Instruments and Acts. Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
Section 3.16. Issuer May Consolidate, etc.
(a) The Issuer shall not consolidate or merge with or into any other Person, unless:
(i) the Person (if other than the Issuer) formed by or surviving such consolidation or merger shall be a Person organized and existing under the laws of the United States of America or any state or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee and to the Administrator and in form reasonably satisfactory to the Indenture Trustee, the due and punctual payment of the principal of and interest on all Notes and the performance or observance of every agreement and covenant of this Indenture on the part of the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no Event of Default shall have occurred and be continuing;
(iii) each Rating Agency shall have notified the Issuer that such transaction will not cause a reduction or withdrawal by such Rating Agency of either of its then current ratings of the Notes;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse tax consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such consolidation or merger and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer any of its properties or assets, including those included in any Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the properties and assets of the Issuer, the conveyance or transfer of which is hereby restricted, shall (A) be a United States citizen or a Person organized and existing under the laws of the United States of America or any state, (B) expressly assumes, by an indenture supplemental hereto, executed and delivered to the Indenture Trustee, in
(ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;
(iii) each Rating Agency shall have notified the Issuer that such transaction will not cause a reduction or withdrawal by such Rating Agency of either of its then current ratings of the Notes;
(iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse tax consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the lien and security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each stating that such conveyance or transfer and such supplemental indenture comply with this Article III and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act).
Section 3.17. Successor or Transferee.
(a) Upon any consolidation or merger of the Issuer in accordance with Section 3.16(a) above, the Person formed by or surviving such consolidation or merger (if other than the Issuer) shall succeed to, and be substituted for, and may exercise every right and power of, the Issuer under this Indenture with the same effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of the Issuer pursuant to Section 3.16(b) above, the Issuer shall be released from every covenant and agreement (except such obligations that survive such transfer) of this Indenture to be observed or performed on the part of the Issuer with respect to the Notes immediately upon the delivery of written notice to the Indenture Trustee of such conveyance or transfer.
Section 3.18. No Other Business. The Issuer shall not engage in any business other than financing, purchasing, owning, selling and managing the Mortgage Loans, owning Preferred Stock of the Depositor and the issuance of the Notes in the manner contemplated by this Indenture and the Transaction Documents and all activities incidental thereto.
Section 3.19. Guarantees, Loans, Advances and Other Liabilities. Except as contemplated by this Indenture or the other Transaction Documents, the Issuer shall not make any loan or advance or credit to, or guarantee (directly or indirectly or by an instrument having the effect of assuring another’s payment or performance on any obligation or capability of so doing or otherwise), endorse or otherwise become contingently liable, directly or indirectly, in connection with the obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or agree contingently to do so) any stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.
Section 3.20. Capital Expenditures. The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).
Section 3.21. Representations and Warranties of the Issuer. The Perfection Representations shall be a part of this Indenture.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.1. Satisfaction and Discharge of Indenture. Subject to and in accordance with Section 8.01 of the Sale and Servicing Agreement, this Indenture shall cease to be of further effect with respect to the Notes (except as to (i) rights of registration of transfer and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments of principal thereof and interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8 and 3.10 hereof, (v) the rights, obligations and immunities of the Indenture Trustee and the Administrator hereunder (including the rights of the Indenture Trustee and the Administrator under Section 6.7 hereof and the obligations of the Indenture Trustee and the Administrator under Section 4.2 hereof) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee or the Administrator payable to all or any of them), and the Indenture Trustee, on demand of and at the expense of the Issuer, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture with respect to the Notes, when all of the following have occurred:
Section 4.2. Application of Trust Money. All moneys deposited with the Indenture Trustee and/or the Administrator pursuant to Sections 3.3 and 4.1 hereof shall be held in trust and applied by it, in accordance with the provisions of the Sale and Servicing Agreement, to the payment, either directly or through any Paying Agent to the Holders of the particular Notes for the payment or redemption of which such moneys have been deposited with the Indenture Trustee and/or the Administrator, as the case may be, of all sums due and to become due thereon for principal and interest; but such moneys need not be segregated from other funds except to the extent required herein or in the Sale and Servicing Agreement or required by law.
Section 4.3. 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
ARTICLE V
REMEDIES
Section 5.1. Events of Default. “Event of Default,” wherever used herein, means with respect to the Notes 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):
(a) 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
(b) default in the payment in full of the principal of the Note Principal Amounts of the Class A and Class M Notes on the Final Scheduled Payment Date which default continues for a period of five (5) days; or
(c) default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section 5.1 specifically dealt with) that has a material adverse effect on the Noteholders, or any representation or warranty of the Issuer made in this Indenture, 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 has a material adverse effect on Noteholders, 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 60 days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders of at least 51% of the Outstanding Amount of the Notes, a written notice specifying such default or incorrect representation or warranty and requiring it to be remedied and stating that such notice is a notice of Default hereunder; or
(d) [reserved]; or
(e) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Trust Estate in an involuntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or ordering the winding-up or liquidation of the Issuer’s affairs, and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or
(f) the commencement by the Issuer of a voluntary case under any applicable federal or state bankruptcy, insolvency or other similar law now or hereafter in effect, or the consent by the Issuer to the entry of an order for relief in an involuntary case under any such law, or the consent by the Issuer to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official of the Issuer or for any substantial part of the Trust Estate, or the making by the Issuer of any general assignment for the benefit of creditors, or the failure by the Issuer generally to pay its debts as such debts become due, or the taking of any action by the Issuer in furtherance of any of the foregoing.
Section 5.2. Acceleration of Maturity; Rescission and Annulment. If an Event of Default should occur and be continuing of which a Responsible Officer of the Indenture Trustee has received written notice or has actual knowledge thereof, then and in every such case the Indenture Trustee may, and shall, upon the prior written direction of the Holders of Notes representing not less than 66-2/3% of the Outstanding Amount of the Notes, declare all the Notes to be immediately due and payable, by a notice in writing to the Issuer (and to the Indenture Trustee if given by Noteholders), and upon any such declaration the unpaid principal amount of such Notes, together with accrued and unpaid interest thereon through the date of acceleration, shall become immediately due and payable.
Section 5.3. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) The Issuer covenants that if (i) default occurs 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 occurs in the payment of the principal of or any installment of the principal of any Note when the same becomes due and payable, and such default continues for a period of five days, the Issuer will, upon demand of the Indenture Trustee, pay to the Indenture Trustee or the Administrator, for the benefit of the Holders of the Notes, the whole amount then due and payable on such Notes for principal and 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 its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee may and, at the direction of Holders of 66-2/3% of the Outstanding Amount of the Notes, shall institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree, and may enforce the same against the Issuer or other obligor upon such Notes and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Notes, wherever situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture Trustee may, and shall at the written direction of the Holders of 66-2/3% of the Outstanding Amount of the Notes, as more particularly provided in Section 5.4 below, proceed to protect and enforce its rights and the rights of the Noteholders, by such appropriate Proceedings as the Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other obligor upon the Notes or any Person having or claiming an ownership interest in the Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, liquidator, sequestrator or similar official shall have been appointed for or taken possession of the Issuer or its property or such other obligor or Person, or in case of any other comparable judicial Proceedings relative to the Issuer or other obligor upon the Notes, or to the creditors or property of the Issuer or such other obligor, the Indenture Trustee, irrespective of whether the principal of any Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand pursuant to the provisions of this Section 5.3, shall be entitled and empowered by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of principal and interest owing and unpaid in respect of the Notes and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and its 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)), and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on behalf of the Holders of Notes in any election of a trustee, a standby trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute all amounts received with respect to the claims of the Noteholders 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 or the Holders of Notes allowed in any judicial proceedings relative to the Issuer, its creditors and its property; and any trustee, receiver, liquidator, custodian or other similar official in any such Proceeding is hereby authorized by each of such Noteholders to make payments to the Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or vote for or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder thereof or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such proceeding except, as aforesaid, to vote for the election of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or under any of the Notes, may be enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any trial or other Proceedings relative thereto, and any such action or Proceedings instituted by the Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the Noteholders, and it shall not be necessary to make any Noteholder a party to any such Proceedings.
Section 5.4. Remedies; Priorities.
(a) If an Event of Default shall have occurred and be continuing of which a Responsible Officer of the Indenture Trustee has actual knowledge, the Indenture Trustee may and, at the direction of Holders of 66-2/3% of the Outstanding Amount of the Notes, shall do one or more of the following (subject to Section 5.5 below):
(i) institute Proceedings in its own name and as trustee of an express trust for the collection of all amounts then payable on the related Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee or the related Noteholders; and
(iv) sell the Trust Estate 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;
(b) If the Indenture Trustee collects any money or property pursuant to this Article V, the Indenture Trustee shall pay out the money or property (or shall remit the money or property to the Paying Agent, who shall pay out the money or property in accordance with the instructions of the Indenture Trustee) in the following order:
Section 5.5. Optional Preservation of the Trust Estate. If the Notes have been declared to be due and payable under Section 5.2 above following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may and, at the written direction of Holders of 66-2/3% of the Outstanding Amount of the Notes, shall elect to maintain possession of the Trust Estate. It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of principal of and interest on the Notes (although the parties hereto understand that there exists the possibility of a shortfall in collections of the Mortgage Loans), and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Collateral. In determining whether to maintain possession of the Collateral, the Indenture Trustee may, but need not, obtain and rely upon an opinion of an Independent investment banking or accounting firm of national reputation as to the feasibility of such proposed action and as to the sufficiency of the Collateral for such purpose.
Section 5.6. Limitation of Suits. No Holder of any Note shall have any right to institute any Proceeding, judicial or otherwise, with respect to this Indenture or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless:
(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 Amount of the Notes have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request;
(d) the Indenture Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and
(e) no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Majority Noteholder.
Section 5.7. Unconditional Rights of Noteholders To Receive Principal and Interest. Notwithstanding any other provisions in this Indenture, the Holder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due date thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) to the extent funds are available therefor out of the Trust Estate and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder.
Section 5.8. Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.
Section 5.9. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of the Indenture Trustee or any Noteholder 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
Section 5.11. Control by Noteholders. The Holders of 66-2/3% of the Outstanding Amount of the Notes shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that:
(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 5.4 above, any direction to the Indenture Trustee to sell or liquidate the Trust Estate shall be in writing by the Holders of Notes representing not less than 100% of the Outstanding Amount of the Notes;
(c) if the conditions set forth in Section 5.5 above have been satisfied and the Indenture Trustee elects to retain the Trust Estate pursuant to such Section 5.5, then any direction to the Indenture Trustee by Holders of Notes representing less than 100% of the Outstanding Amount of the Notes to sell or liquidate the Trust Estate shall be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the acceleration of the maturity of the Notes as provided in Section 5.2 above, the Majority Noteholder 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 Holder of each Note. In the case of any such waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be restored to their former positions and rights hereunder, respectively; but no such waiver shall extend to any subsequent or other 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
Section 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead or in any manner whatsoever, claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, 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 or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.4(b) above.
Section 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Depositor and the Master Servicer, as applicable, of each of their obligations to the Issuer 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 Issuer under or in connection with the Sale and Servicing Agreement to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of the Depositor or the Master Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Depositor or the Master 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 may, and at the direction (which direction shall be in writing) of the Holders of 66-2/3% of the Outstanding Amount of the Notes shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Depositor 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
ARTICLE VI
THE INDENTURE TRUSTEE AND THE ADMINISTRATOR
Section 6.1. 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 the other Transaction Documents to which it is a party 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 the other Transaction Documents to which it is a party and no implied covenants or obligations shall be read into this Indenture, or any other Transaction Document to which it is a party, against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture and the other Transaction Documents to which it is a party; however, the Indenture Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture and the other Transaction Documents to which it is a party. If any such instrument is found not to conform in any material respect to the requirements of this Indenture and the other Transaction Documents to which it is a party, the Indenture Trustee shall notify the Noteholders of such instrument in the event that the Indenture Trustee, after so requesting, does not receive a satisfactory corrected instrument.
(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 6.1;
(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 above.
(d) Every provision of this Indenture and the other Transaction Documents to which the Indenture Trustee is a party that in any way relates to the Indenture Trustee is subject to paragraphs (a), (b), (c) and (g) of this Section 6.1.
(e) The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Indenture Trustee shall be segregated from other funds except to the extent permitted by law or the terms of this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture or any other Transaction Document to which the Indenture Trustee is a party 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; and none of the provisions contained in this Indenture or any other Transaction Document to which the Indenture Trustee is a party shall in any event require the Indenture Trustee to perform, or be responsible for the manner of performance of, any of the obligations of the Master Servicer, the Issuer or Transferor under this Indenture or such other Transaction Document, as the case may be, except during such time, if any, as the Indenture Trustee shall be the successor to, and be vested with the rights, duties, powers and privileges of, the Master Servicer in accordance with the terms of this Indenture and the Sale and Servicing Agreement.
(h) The Indenture Trustee shall challenge or cause to be challenged any attempt at substantive consolidation of the assets and liabilities of the Issuer with those of any Owner (as the term “Owner” is defined in the Trust Agreement) in connection with any insolvency proceeding of the Issuer.
(i) Every provision of this Indenture or any other Transaction Document to which the Indenture Trustee is a party 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 6.1 and to the provisions of the TIA.
(j) Subject to the other provisions of this Indenture and the other Transaction Documents to which the Indenture Trustee is a party and without limiting the generality of this Section 6.1, the Indenture Trustee, unless it is acting as the Master Servicer under the Sale and Servicing Agreement, shall have no duty (A) to see to any recording, filing, or depositing of this Indenture or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance, (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or
Section 6.2. Rights of Indenture Trustee.
(a) The Indenture Trustee may conclusively rely and shall be fully protected in acting or refraining from acting on any resolution, certificate of auditors or any other certificate, statement, instrument, opinion, report, notice, request, consent, order, appraisal, bond or other paper or 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 and shall be entitled to receive an Officer’s Certificate or an Opinion of Counsel. The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on an Officer’s Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or a custodian or nominee.
(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 consult with counsel, and the advice or opinion of counsel selected by it with due care with respect to legal matters relating to this Indenture, the Notes and the Transaction Documents to which it is a party, 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.
(f) The Indenture Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture or the other Transaction Documents to which it is a party or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders, pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; nothing contained herein shall, however, relieve the Indenture Trustee of the obligation, upon the occurrence of an Event of Default of which a Responsible Officer of the Indenture Trustee shall have actual knowledge (which has not been cured), to exercise such of the rights and powers vested in it by this Indenture, and to 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.
(g) The Indenture Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Majority Noteholder; provided, however, that if the payment within a reasonable time to the Indenture Trustee of the costs, expenses or liabilities likely to be incurred by it in the making of such investigation is, in the opinion of the Indenture Trustee, not reasonably assured to the Indenture Trustee by the security afforded to it by the terms of this Indenture, the Indenture Trustee may require reasonable indemnity against such cost, expense or liability as a condition to taking any such action. The reasonable expense of every such examination shall be paid by the Issuer or, if paid by the Indenture Trustee, shall be repaid by the Issuer upon demand.
(h) The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture or in any other Transaction Document to which the Indenture Trustee is a party shall not be construed as a duty, and the Indenture Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act.
(i) The Indenture Trustee shall not be required to give any bond or surety in respect of the execution of the Trust Fund created hereby or the powers granted hereunder.
(j) The Indenture Trustee shall have no liability in connection with the malfeasance or nonfeasance by the Issuer or the Master Servicer. The Indenture Trustee shall have no liability in connection with compliance by the Issuer or the Master Servicer with statutory or regulatory requirements related to the Collateral or the Trust Estate. The Indenture Trustee shall not make or be deemed to have made any representations or warranties with respect to the Collateral or the Trust Estate or the validity or sufficiency of any assignment of the Collateral or the Trust Estate to the Indenture Trustee.
Section 6.3. Individual Rights of Indenture Trustee. The Indenture Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates with the same rights it would have if it were not Indenture Trustee. Any 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 below.
Section 6.4. Indenture Trustee’s Disclaimer. The Indenture Trustee shall not be (i) responsible for and makes no representation as to the validity or adequacy of this Indenture, any other Transaction Document to which it is a party or the Notes, (ii) shall not be accountable for the Issuer’s use of the proceeds from the Notes or (iii) responsible for any statement of the Issuer in the Indenture, any other Transaction Document to which it is a party or in any document issued in connection with the sale of the Notes or in the Notes.
Section 6.5. Notice of Defaults. The Indenture Trustee shall not be charged with the knowledge of any Default or an Event of Default unless a Responsible Officer has received written notice or has actual knowledge thereof. The Indenture Trustee shall mail to each Noteholder, the Master Servicer, and the Depositor notice of the Default within 30 days after it occurs at the expense of the Issuer. Except in the case of a Default in payment of principal of or
Section 6.6. Provision of Information. The Administrator shall deliver, to the extent provided by the Master Servicer, to each Noteholder, such information as may be required to enable such Holder to prepare its federal and state income tax returns. In addition, upon Issuer Request, the Administrator shall promptly furnish such information reasonably requested by the Issuer that is reasonably available to the Administrator to enable the Issuer to perform its federal and state income tax reporting obligations.
Section 6.7. Compensation and Indemnity. The Issuer shall, or shall cause the Master Servicer to, pay to the Indenture Trustee from time to time as compensation for its services, including but not limited to its services, if any, (i) as successor custodian of the Mortgage Files pursuant to Section 2.01 of the Sale and Servicing Agreement and (ii) in conducting the auction process for the Trust Estate pursuant to Section 8.01 of the Sale and Servicing Agreement and Section 10.2 hereof, a fee agreed to by the Master Servicer and the Indenture Trustee. The Indenture Trustee’s compensation shall not be limited by any law on compensation of a trustee of an express trust. The Issuer shall or shall cause the Master Servicer to reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it, including but in no way limited to costs of collection, in addition to the compensation for its services. Such expenses shall include but shall in no way be limited to the reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, outside counsel, accountants and experts. The Issuer shall or shall cause the Master Servicer to indemnify the Indenture Trustee, and its respective officers, directors, employees and agents against any and all loss, liability or expense (including but in no way limited to attorneys’ fees and expenses) incurred by each of them in connection with the acceptance or the administration of this trust and the performance of its duties hereunder. The Indenture Trustee shall notify the Issuer and the Master Servicer promptly of any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the Master Servicer shall not relieve the Issuer or the Master Servicer of its obligations hereunder. The Issuer shall defend or shall cause the Master Servicer to defend any claim for indemnity that may arise against the Indenture Trustee, or the Indenture Trustee may have separate counsel and the Issuer shall or shall cause the Master Servicer to pay the fees and expenses of such counsel. Neither the Issuer 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. HFC’s payment obligations to the Indenture Trustee pursuant to this Section 6.7 shall survive the discharge of this Indenture.
Section 6.8. 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. The Indenture Trustee may resign at any time by so notifying the Issuer. The Majority Noteholder may remove the Indenture Trustee by so notifying the Indenture Trustee and Depositor and may appoint a successor Indenture Trustee. The Issuer shall remove the Indenture Trustee if:
(a) the Indenture Trustee fails to comply with Section 6.11 below;
(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.
Section 6.9. 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, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11 below.
Section 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any part of the Trust Estate may at the time be located, the Indenture Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or any part of the Trust, and to vest in such Person or
(b) Every separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the Indenture Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Indenture Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Indenture Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Estate or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Indenture 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 Indenture on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. The Indenture Trustee shall remain primarily liable for all actions of a co-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 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 Issuer are outstanding if the requirements for such exclusion set forth in TIA Section 310(b)(1) are met.
Section 6.12. Preferential Collection of Claims Against Issuer. The Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated.
Section 6.13. Representations and Warranties. The Indenture Trustee and the Administrator each hereby represents and warrants as to itself that:
(a) It is duly organized, validly existing and in good standing under the laws of the United States, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is currently conducted.
(b) It has the power and authority to execute and deliver this Indenture and the other Transaction Documents to which it is a party and to carry out its terms; and the execution, delivery and performance of this Indenture have been duly authorized by it by all necessary corporate action.
(c) The consummation of the transactions contemplated by this Indenture and the other Transaction Documents to which it is a party and the fulfillment of the terms hereof and thereof 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, its certificate of incorporation or bylaws or any agreement or other instrument to which it is a party or by which it is bound.
Section 6.14. Directions to Indenture Trustee. The Indenture Trustee is hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of the Trust in trust for the Noteholders;
(b) to appoint, and the Indenture Trustee hereby appoints, the Administrator as authentication agent to authenticate and deliver the Notes substantially in the form prescribed by Exhibit A or Exhibit B hereto, as applicable, in accordance with the terms of this Indenture; and
(c) to take all other actions as shall be required to be taken by the terms of this Indenture.
Section 6.15. Duties, Liabilities and Limitations on Liability of Administrator.
(a) The Administrator shall undertake to perform such duties and only such duties as are specifically set forth in this Indenture and the other Transaction Documents to which it is a party. The duties and obligations of the Administrator with respect to the Notes and the Ownership Interest and the Transaction Documents to which it is a party shall be determined solely by the express provisions of such Transaction Documents, the Administrator shall not be liable except for the performance of such duties and obligations as are specifically set forth in the Transaction Documents to which it is a party, and no implied covenants or obligations shall be read into the Transaction Documents against the Administrator.
(b) The Administrator shall have all of the rights and benefits of and limitations on liability afforded to the Indenture Trustee under this Article VI to the same extent as though the Administrator had been named in the various provisions of Article VI, except (i) to the extent otherwise provided in Sections 6.15, 6.16, 6.17, 6.18 and 6.19 (for example, Section 6.16 shall apply instead of Section 6.7) and (ii) with respect to Section 6.4, the Administrator shall be responsible for the Administrator’s certificate of authentication.
(c) In acting under this Indenture and the other Transaction Documents to which it is a party and in connection with the Notes and the Ownership Interest, the Administrator is acting solely as an agent of the Issuer and does not assume any obligation or relationship of agency for or with, or any fiduciary obligation towards, any of the Holders of the Notes.
(d) The Administrator shall be obligated to make payments pursuant to the terms of the Transaction Documents only if, and only to the extent that, sufficient funds are available therefor in the Collection Account. In no event shall the Administrator, in its capacity as Administrator or Paying Agent or in its individual capacity, be liable for any such payments.
(e) In each case that the Administrator (including in its capacity as Paying Agent hereunder) may or is required hereunder or under any other Transaction Document to which it is a party to take any action (an “Action”), including without limitation to make any determination or judgment (including without limitation the proper reporting and/or withholding for Federal income tax purposes required with respect to any payment made under any Transaction Document for which the Administrator has a reporting and/or withholding obligation for Federal income tax purposes), to exercise rights or powers or otherwise act hereunder or thereunder, the Administrator may seek direction from the Master Servicer. The Administrator shall not be liable with respect to any Action taken or omitted to be taken by it in good faith in accordance with the direction from the Master Servicer. If the Administrator shall request direction from the Master Servicer with respect to any Action, the Administrator shall be entitled to refrain from such Action unless and until such Administrator shall have received direction from the Master Servicer, and the Administrator shall not incur liability to any Person by reason of so refraining.
(f) The Administrator may rely, and shall be fully protected in relying, on any direction or instruction received from the Master Servicer, the Indenture Trustee or any other party hereto or to the other Transaction Documents.
(g) The Administrator shall not be responsible for filing any financing or continuation statement or otherwise taking any action in connection with any security interest or lien granted pursuant to the Transaction Documents.
Section 6.16. Administrator Compensation and Indemnification.
(a) The Administrator shall be entitled to such compensation as shall be mutually agreed upon between it and the Master Servicer for its services hereunder and under the other Transaction Documents to which it is a party, including its roles as Paying Agent and Registrar under the Trust Agreement. The Administrator agrees and acknowledges that it shall look solely to the Master Servicer for payment of such compensation and it shall not be entitled to payment of such compensation from the Issuer, the Indenture Trustee or out of the Trust Estate.
(b) The Administrator and any director, officer, employee or agent of the Administrator shall be indemnified by the Master Servicer and held harmless by the Master Servicer against any loss, liability or expense (including reasonable attorney’s fees and expenses) arising out of, relating to or in connection with (i) this Indenture, the Notes and the other Transaction Documents to which it is a party or in connection with their respective duties hereunder or any legal action relating thereto, other than any loss, liability or expense incurred by reason of willful misconduct, negligence or bad faith in the performance of the Administrator’s duties hereunder or thereunder and (ii) any audit, controversy or judicial proceeding relating to a governmental taxing authority.
(c) Notwithstanding anything contained in this Indenture or any of the other Transaction Documents to the contrary, the indemnification provided for in this Section 6.16 shall survive the payment of the Notes, the resignation or removal of the Administrator and/or the satisfaction and discharge of this Indenture.
Section 6.17. Replacement of Administrator. No resignation or removal of the Administrator and no appointment of a successor Administrator shall become effective until the acceptance of appointment by the successor Administrator pursuant to this Section. The Administrator may resign at any time by so notifying the Issuer. The Issuer shall remove the Administrator if:
(a) the Administrator fails to comply with Section 6.11 above;
(b) the Administrator is adjudged bankrupt or insolvent;
(c) a receiver or other public officer takes charge of the Administrator or its property; or
(d) the Administrator otherwise becomes incapable of acting.
Section 6.18. Successor Administrator by Merger. If the Administrator 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 Administrator; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11 above.
Section 6.19. Directions to Administrator. The Administrator is hereby directed to authenticate and deliver the Notes substantially in the form prescribed by Exhibit A and Exhibit B hereto, as applicable, in accordance with the terms of this Indenture.
ARTICLE VII
NOTEHOLDERS’ LISTS AND REPORTS
Section 7.1. Issuer To Furnish Indenture Trustee and Administrator Names and Addresses of Noteholders. The Issuer will furnish or cause to be furnished to the Indenture Trustee and the Administrator (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 and the Administrator may reasonably require, of the names and addresses of the Noteholders as of such Record Date, (b) at such other times as the Indenture Trustee and/or the Administrator may request in writing, within 30 days after receipt by the Issuer of any such request, a list of similar form and content as of a date not more than 10 days prior to the time such list is furnished; provided, however, that so long as the Administrator is the Note Registrar, no such list shall be required to be furnished to the Administrator.
Section 7.2. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee and the Administrator shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Noteholders contained in the most recent list furnished to the Indenture Trustee and the Administrator as provided in Section 7.1. The Indenture Trustee and the Administrator may destroy any list furnished to it as provided in such Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes.
(c) The Issuer, the Indenture Trustee, the Administrator and the Note Registrar shall have the protection of TIA Section 312(c).
Section 7.3. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after the Issuer is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) that the Issuer may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the Commission in accordance with the rules and regulations prescribed from time to time by the Commission such additional information, documents and reports with respect to compliance by the Issuer with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture Trustee shall transmit by mail to all Noteholders described in TIA Section 313(c)) such
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on December 31 of each year.
Section 7.4. Reports by Indenture Trustee. If required by TIA Section 313(a), within 60 days after each August 1, beginning with August 1, 2005, the Indenture Trustee shall mail 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).
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.1. Collection of Money. Except as otherwise expressly provided herein, the Indenture Trustee, or the Paying Agent on its behalf, 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 or the Paying Agent on its behalf shall apply all such money received by it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V herein.
Section 8.2. Accounts; Distributions.
(a) On or prior to the Closing Date, the Administrator shall establish and maintain or cause to be established and maintained with the Administrator, in the name of the Administrator on behalf of the Indenture Trustee for the benefit of the Noteholders and the Transferor, the Collection Account as provided in Article V of the Sale and Servicing Agreement into which amounts shall be deposited in accordance with the terms of the Sale and Servicing Agreement.
(b) The Indenture Trustee shall remit to the Administrator for deposit, and the Administrator shall deposit, into the Collection Account any amounts representing payments on and any collections in respect of the Mortgage Loans received by it, if any, and any other amounts required by the terms of the Transaction Documents to be deposited, immediately
(c) On each Payment Date and the Redemption Date, to the extent funds are available in the Collection Account, the Administrator shall make the distributions and payments in the amounts and in the priority set forth in Section 5.01 of the Sale and Servicing Agreement (except as otherwise provided in Section 5.4(b) herein).
(d) On each Payment Date and the Redemption Date, to the extent of the interest of the Indenture Trustee in the Collection Account (as described in Section 5.01 of the Sale and Servicing Agreement), the Indenture Trustee hereby authorizes the Administrator or the Paying Agent, as applicable, to make the distributions from the Collection Account as required pursuant to Section 5.01 of the Sale and Servicing Agreement.
Section 8.3. [Reserved].
Section 8.4. Servicing Certificates.
Section 8.5. [Reserved].
Section 8.6. Opinion of Counsel. The Indenture Trustee shall receive at least seven days notice when requested by the Issuer to take any action pursuant to Section 2.9(a) herein, accompanied by copies of any instruments involved, and the Indenture Trustee shall also require, as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee addressed to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with 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 market value of a Trust Estate. 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 9.1. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Holders of any Notes but with prior notice to the Rating Agencies, the Issuer and the Administrator, the Co-Trustee and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the Trust Indenture Act as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable provisions hereof, of another person to the Issuer, and the assumption by any such successor of the covenants of the Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of the Noteholders, or to surrender any right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision herein or in any supplemental indenture that may be inconsistent with any other provision herein or in any supplemental indenture or to make any other provisions with respect to matters or questions arising under this Indenture or in any supplemental indenture; provided, that such action shall not adversely affect the interests of the Noteholders;
(vi) to evidence and provide for the acceptance of the appointment hereunder by a successor trustee with respect to the Notes and to add to or change any of the provisions of this Indenture as shall be necessary to facilitate the administration of the trusts hereunder by more than one trustee, pursuant to the requirements of Article VI herein; 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.
(b) The Issuer, the Administrator, the Co-Trustee and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Noteholders but with prior confirmation from 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 Noteholders under this Indenture; provided, however, that such action shall not, as evidenced by an Opinion of Counsel or satisfaction of the Rating Agency Condition, adversely affect in any material respect the interests of any Noteholder or cause the Issuer to be subject to entity level tax.
Section 9.2. Supplemental Indentures with Consent of Noteholders. The Issuer, the Administrator, the Co-Trustee and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior consent of the Rating Agencies, and with the consent of the Majority Noteholder, by Act of such Majority Noteholder delivered to the Issuer, the Administrator, the Co-Trustee 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:
(a) change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the interest rate thereon or the amount required to be paid on the Notes following the exercise of the option set forth in Section 8.01 of the Sale and Servicing Agreement, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V herein, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);
(b) reduce the percentage of the Outstanding Amount of the 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”;
(d) reduce the percentage of the Outstanding Amount of the Notes required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Trust Estate pursuant to Section 5.4 herein;
(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 Transaction 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
(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 Trust Estate or, except as otherwise permitted or contemplated herein, terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security provided by the lien of this Indenture provided further, that such action shall not, as evidenced by an Opinion of Counsel, cause the Issuer to be subject to an entity level tax.
Section 9.3. 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 and the Administrator shall be entitled to receive, and subject to Sections 6.1 and 6.2 herein, shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and all conditions precedent to the execution of such supplemental indenture have been met. The Indenture Trustee and the Administrator may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s or the Administrator’s, as the case may be, own rights, duties, liabilities or immunities, as the case may be, under this Indenture or otherwise.
Section 9.4. Effect of Supplemental Indenture. Upon the execution of any supplemental indenture pursuant to the provisions hereof, this Indenture 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 Co-Trustee, the Administrator, the Issuer and the Holders of the Notes shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terms and conditions of any such
Section 9.5. 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 9.6. Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Administrator in exchange for Outstanding Notes.
ARTICLE X
TERMINATION OF TRUST
Section 10.1. Early Termination.
Section 10.2. Mandatory Redemption.
(a) If the full amount of principal and interest then due on the Notes is not paid by the Payment Date in August 2014, the Indenture Trustee or an agent thereof shall at the expense of the Master Servicer begin a process for soliciting bids in connection with an auction of the Mortgage Loans. The Indenture Trustee shall provide the Master Servicer written notice of such auction at least ten (10) Business Days prior to the date bids must be received in such auction (the “Mandatory Auction Date”). The auction shall be conducted as follows and in accordance with the Auction Procedures set forth in Exhibit B to the Sale and Servicing Agreement:
(b) The Indenture Trustee or an agent thereof shall at the expense of the Master Servicer solicit new bids and, if more than one bid is received, the Indenture Trustee or an agent thereof shall at the expense of the Master Servicer solicit and resolicit new bids from all participating bidders until only one bid remains or the remaining bidders decline to resubmit bids. The Indenture Trustee or an agent thereof shall at the expense of the Master Servicer accept the highest of such remaining bids if it is equal to or in excess of the Mandatory Redemption Price. If the highest of such remaining bids is less than the Mandatory Redemption Price, then the Indenture Trustee shall neither accept such bid nor consummate such sale unless Holders of 66-2/3% of the Outstanding Amount of the Notes consent within 10 Business Days from the date that notice of such bid is distributed to such Holders.
(c) If the first auction conducted by the Indenture Trustee does not produce any bid at least equal to the Mandatory Redemption Price, then the Indenture Trustee or any agent thereof shall, at the expense of the Master Servicer, beginning on the Payment Date occurring approximately three months after the Mandatory Auction Date for the failed first auction, commence another auction in accordance with the requirements of this subsection (c). If such second auction does not produce any bid at least equal to the Mandatory Redemption Price and the Holders of 66-2/3% of the Outstanding Amount of the Notes do not consent to a sale at such price within 10 Business Days from the date that notice of such bid is distributed to such Holders, then the Indenture Trustee or an agent thereof shall, at the expense of the Master Servicer, beginning on the Payment Date occurring approximately three months after the Mandatory Auction Date for the failed second auction, commence another auction in accordance with the requirements of this subsection (c), and shall, at the expense of the Master Servicer, continue to conduct similar auctions approximately every three months thereafter until the earliest of (i) delivery by the Master Servicer of notice of exercise of its repurchase option pursuant to Section 8.01(b) of the Sale and Servicing Agreement, (ii) receipt by the Indenture Trustee of a bid meeting the conditions specified in the preceding paragraph or the Holders of 66-2/3% of the Outstanding Amount of the Notes consent to a sale at such price within 10 Business Days from the date that notice of such bid is distributed to such Holders, or (iii) the Payment Date on which the Principal Balance of all the Mortgage Loans is reduced to zero.
(d) If the Indenture Trustee receives a bid meeting the conditions specified in this Section 10.2, the Master Servicer and the Issuer shall promptly arrange for the sale of the Mortgage Loans to the winning bidder, the Indenture Trustee shall execute such agreements and termination statements as may be reasonably required or appropriate to release the lien of this Indenture with respect to the Mortgage Loans and Mortgage Files upon payment to the Indenture Trustee, or the Administrator on behalf of the Indenture Trustee, of the bid purchase price (which purchase price shall be deposited in the Collection Account) and satisfaction of any other terms and conditions of the auction sale. The Indenture Trustee shall cooperate with the Master Servicer and the Issuer in the sale of the Mortgage Loans, shall deliver to the winning bidder the related Mortgage Files in the Indenture Trustee’s possession (if any), and shall take such other actions as the winning bidder may reasonably request to effect the transfer of the Mortgage Loans.
(e) Notice of any termination, specifying the Payment Date (which shall be a date that would otherwise be a Payment Date) upon which the Noteholders may surrender their Notes to the Administrator for payment of the final distribution and cancellation (the
(f) Upon presentation and surrender of the Notes, to the extent of funds available therefor, the Administrator shall cause to be distributed to the Holders of the Notes on the Redemption Date, in proportion to the Percentage Interests of their respective Notes and to the extent that funds are available for such purpose, an amount equal to the amount required to be distributed to Noteholders pursuant to Section 5.01 of the Sale and Servicing Agreement for such Payment Date.
(g) In the event that all of the Noteholders shall not surrender their Notes for final payment and cancellation on or before such Redemption Date, the Administrator shall promptly following such date cause all funds in the Collection Account not distributed in final payment to Noteholders, to be withdrawn therefrom and credited to the remaining Noteholders by depositing such funds in a separate escrow account for the benefit of such Noteholders, and the Master Servicer (if the Master Servicer has exercised its right to purchase the Mortgage Loans) or the Administrator (in any other case) shall give a second written notice to the remaining Noteholders to surrender their Notes for cancellation and receive the final payment with respect thereto. If within nine months after the second notice all the Notes shall not have been surrendered for cancellation, the holder of the Ownership Interest will be entitled to all remaining unclaimed funds and other assets which remain subject hereto, and the Administrator upon transfer of such funds at the written request of the Transferor shall be discharged of any responsibility for such funds and the Noteholders shall look to the holder of the Ownership Interest for payment.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer made to the Indenture Trustee to take any action under any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an
(b) (i) Prior to the deposit of any Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any property or securities subject to the lien of this Indenture (except in the case of the release of Mortgage Loans in accordance with the Sale and Servicing Agreement), the Issuer shall, in addition to any obligation imposed in Section 11.1(a) herein or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee an Independent Certificate as to the same matters, if the fair value to the Issuer of the Collateral, other property or securities to be so deposited and of all other such Collateral, other property or securities made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the aggregate Note Principal Amount of the Notes, but such a certificate need not be furnished with respect to any securities so deposited, if the fair value thereof to the Issuer as set forth in the
(iii) Whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an Independent Certificate as to the same matters if the fair value of the property or securities and of all other property or securities released from the lien of this Indenture since the commencement of the then-current calendar year, as set forth in the certificates required by clause (iii) above and this clause (iv), equals 10% or more of the aggregate Note Principal 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 current aggregate Note Principal Amount of the Notes.
Section 11.2. 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.
Section 11.3. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.1 hereof) conclusive in favor of the Indenture Trustee, the Administrator and the Issuer, if made in the manner provided in this Section 11.3.
(b) The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.
Section 11.4. Notices. Any request, demand, authorization, direction, instruction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture shall be in writing and if such request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders is to be made upon, given or furnished to or filed with:
(a) the Indenture Trustee or the Co-Trustee by any Noteholder, the Issuer or the Administrator shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (including via facsimile) to or with the Indenture Trustee at its Corporate Trust Office,
(b) the Administrator by any Noteholder, the Issuer or the Indenture Trustee shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing (including via facsimile) to or with the Administrator at its Corporate Trust Office, or
(c) the Issuer by the Indenture Trustee, the Administrator or any Noteholder shall be sufficient for every purpose hereunder if in writing (including via facsimile) and mailed first-class, postage prepaid to the Issuer addressed to: Household Mortgage Loan Trust 2004-HC1, in care of the Owner Trustee at 101 Barclay St., Floor 8W, New York, New York 10286, Attention: Asset Backed Securities (facsimile number (212) 815-3883), and the Delaware Trustee at 502 White Clay Center, Route 273, Newark, Delaware 19711, Attention: Corporate Trust Office (facsimile number (302) 325-8905) and to the Master Servicer addressed to: 2700 Sanders Road, Prospect Heights, Illinois 60070 (facsimile number (847) 205-7538), or at any other address previously furnished in writing to the Indenture Trustee by the Issuer.
Section 11.5. 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 been duly given.
Section 11.6. 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.
Section 11.7. 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 11.8. Successors and Assigns. All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents. All agreements of the Administrator in this Indenture shall bind its successors and agents.
Section 11.9. Separability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
Section 11.10. Benefits of Indenture. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder, and the Noteholders and any other party secured hereunder, and any other Person with an ownership interest in any part of the Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 11.11. Legal Holidays. In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.
Section 11.12. GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.13. Counterparts. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 11.14. Recording of Indenture. If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the Indenture Trustee) to the effect that such recording is necessary either for the protection of the Noteholders or any other Person secured hereunder or for the enforcement of any right or remedy granted to the Indenture Trustee under this Indenture.
Section 11.15. Trust Obligation. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee, the Administrator or the Indenture Trustee on the Notes or under this Indenture or the other Transaction Documents or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee, the Administrator or the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee, the Administrator or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee, the Administrator or the Indenture Trustee or of any successor or assign of the Indenture Trustee, the Administrator or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee, the Administrator and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement.
Section 11.16. No Petition. The Indenture Trustee and the Administrator, 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 (and any wholly-owned subsidiary thereof), the Depositor, the Master Servicer or the Issuer, or join in any institution against the Transferor (and any wholly-owned subsidiary thereof), the Depositor, the Master Servicer or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the Transaction Documents.
Section 11.17. Inspection. The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers, employees, and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested. The Indenture Trustee shall and shall cause its representatives to hold in confidence all such information except to the extent disclosure may be required by law (and all reasonable applications for confidential treatment are unavailing) and except to the extent that the Indenture Trustee may reasonably determine that such disclosure is consistent with its obligations hereunder.
Section 11.18. Inconsistencies With the Sale and Servicing Agreement. In the event certain provisions of this Indenture conflict with the provisions of the Sale and Servicing Agreement, the parties hereto agree that the provisions of the Sale and Servicing Agreement shall be controlling.
Section 11.19. Third-Party Beneficiaries. This Indenture will inure to the benefit of and be binding upon the parties hereto, the Noteholders, the Note Owners and their respective successors and permitted assigns. Except as otherwise provided in this Indenture, no other person will have any right or obligation hereunder.
Section 11.20. Limited Recourse.
(a) Notwithstanding anything in this Indenture to the contrary, the Notes constitute limited recourse obligations and are limited in recourse to the assets of the Trust. The Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a Note, agree that recourse for the Notes is limited to the assets of the Trust and, if the assets of the Trust shall prove to be insufficient to pay amounts due under the Notes, the Noteholders shall have no claim against the assets of the Depositor other than those which have been conveyed to the Trust.
(b) If, notwithstanding paragraph (a) above, the Noteholders are deemed to have any interest in any asset of the Depositor other than the Depositor’s interest in the assets of the Trust, including any interest in assets of the Depositor, or any assets sold by the Depositor to another trustee pursuant to a separate pooling and servicing agreement, sale and servicing agreement or similar agreement, pledged to secure debt obligations of the Depositor other than the Notes, the Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a Note, agree that any such interest is subordinate to the claims of the holders of any such debt obligations, and the Indenture Trustee and Noteholders shall have no rights in such assets until such debt obligations are indefeasibly paid in full. The agreement of the Indenture Trustee and the Noteholders pursuant to this Section 11.20 is intended to constitute a subordination agreement for the purposes of Section 510(a) of title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. (the “Bankruptcy Code”).
Section 11.21. Limitation on Voting of Preferred Stock. The Indenture Trustee shall hold all of the Preferred Stock in trust, for the benefit of the Noteholders, and shall vote such stock only pursuant to the written instructions of the Majority Noteholder; provided that:
(i) any direction provided by the Majority Noteholder shall not be in conflict with any rule of law or with any of the Transaction Documents; and
(ii) the Trust and Indenture Trustee may take any other action deemed proper by the Trust or the Indenture Trustee that is not inconsistent with any direction;
Section 11.22. Limitation of Liability. It is understood by each party hereto that the sole recourse of each party hereto in respect of the obligations of the Issuer and the Co-Trustee hereunder and under the other Transaction Documents to which it is a party shall be to the Trust Estate. In addition, The Bank of New York is entering into this Indenture and other Transaction Documents to which the Issuer is a party solely in its capacity as Owner Trustee and Delaware Trustee under the Trust Agreement and not in its individual capacity and in no case shall The Bank of New York (or any Person acting as successor Owner Trustee or Delaware Trustee under the Trust Agreement) be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of the Issuer hereunder or thereunder, all such liability, if any, being expressly waived by the parties hereto and any person claiming by, through or under such party. Moreover, U.S. Bank National Association, in entering into this Indenture as Co-Trustee under the Trust Agreement, is not entering into this Indenture in its individual capacity and in no case shall U.S. Bank National Association (or any Person acting as successor Co-Trustee under the Trust Agreement) be personally liable for or on account of any of the statements, representations, warranties, covenants or obligations stated to be those of the Co-Trustee hereunder or thereunder, all such liability, if any, being expressly waived by the parties hereto and any person claiming by, through or under such party.
Section 11.23. Entire Agreement. This Indenture sets forth the entire agreement between the parties with respect to the subject matter hereof and thereof, and this Indenture supersedes and replaces any agreement or understanding that may have existed between the parties prior to the date hereof in respect of such subject matter.
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