EXHIBIT 4.2
TACONIC ASSET ACCEPTANCE COMPANY, L.L.C.
Company,
[NAME OF CERTIFICATE ADMINISTRATOR]
Certificate Administrator
and
[NAME OF TRUSTEE]
Trustee
------------------------------
TRUST AGREEMENT
Dated as of [_______ __, 20__]
-------------------------------
Mortgage Pass-Through Certificates, Series 20[___-__]
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.01 Defined Terms.........................................................................2
ARTICLE II
CONVEYANCE OF THE UNDERLYING MORTGAGE SECURITIES; ORIGINAL ISSUANCE OF THE CERTIFICATES
SECTION 2.01 Conveyance of the Underlying Agency Securities.......................................11
SECTION 2.02 Acceptance by Trustee................................................................11
SECTION 2.03 Execution and Authentication of Certificates.........................................12
ARTICLE III
ADMINISTRATION OF THE UNDERLYING AGENCY SECURITIES; REPORTS TO CERTIFICATEHOLDERS
SECTION 3.01 Administration of the Trust Fund and the Underlying Agency Securities................12
SECTION 3.02 Collection of Monies.................................................................12
SECTION 3.03 Establishment of Certificate Account; Deposits in Certificate Account................13
SECTION 3.04 Permitted Withdrawals From the Certificate Account...................................13
SECTION 3.05 Annual Statement as to Compliance....................................................14
SECTION 3.06 Rights of the Company in Respect of the Certificate Administrator....................14
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01 Distributions........................................................................14
SECTION 4.02 Statements to Certificateholders.....................................................16
SECTION 4.03 Access to Certain Documentation and Information......................................17
SECTION 4.04 Permitted Investments................................................................17
ARTICLE V
THE CERTIFICATES
SECTION 5.01 The Certificates.....................................................................18
SECTION 5.02 Registration of Transfer and Exchange of Certificates................................18
SECTION 5.03 Mutilated, Destroyed, Lost or Stolen Certificates....................................22
SECTION 5.04 Persons Deemed Owners................................................................23
SECTION 5.05 Appointment of Paying Agent..........................................................23
ARTICLE VI
THE COMPANY AND THE CERTIFICATE ADMINISTRATOR
SECTION 6.01 Respective Liabilities of the Company and the Certificate Administrator..............23
SECTION 6.02 Merger, Consolidation or Conversion of the Company or the Certificate
Administrator........................................................................23
SECTION 6.03 Limitation on Liability of the Company, the Certificate Administrator and
Others...............................................................................24
SECTION 6.04 Company and Certificate Administrator Not to Resign..................................24
ARTICLE VII
DEFAULT
SECTION 7.01 Events of Default....................................................................25
SECTION 7.02 Trustee or Company to Act; Appointment of Successor..................................26
SECTION 7.03 Notification to Certificateholders...................................................27
SECTION 7.04 Waiver of Events of Default..........................................................27
ARTICLE VIII
THE TRUSTEE
SECTION 8.01 Duties of Trustee....................................................................27
SECTION 8.02 Certain Matters Affecting the Trustee................................................29
SECTION 8.03 Trustee Not Liable for Certificates or Underlying Agency Securities..................30
SECTION 8.04 Trustee May Own Certificates.........................................................31
SECTION 8.05 Certificate Administrator to Pay Trustee's Fees and Expenses; Indemnification........31
SECTION 8.06 Eligibility Requirements for Trustee.................................................32
SECTION 8.07 Resignation and Removal of the Trustee...............................................32
SECTION 8.08 Successor Trustee....................................................................33
SECTION 8.09 Merger or Consolidation of Trustee...................................................33
SECTION 8.10 Appointment of Co-Trustee or Separate Trustee........................................33
SECTION 8.11 Appointment of Office or Agency......................................................34
ARTICLE IX
TERMINATION
SECTION 9.01 Termination..........................................................................35
SECTION 9.02 Additional Termination Requirements..................................................36
ARTICLE X
REMIC PROVISIONS
SECTION 10.01 REMIC Administration.................................................................37
SECTION 10.02 Certificate Administrator and Trustee Indemnification................................40
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01 Amendment............................................................................40
SECTION 11.02 Counterparts.........................................................................42
SECTION 11.03 Limitation on Rights of Certificateholders...........................................42
SECTION 11.04 Governing Law........................................................................43
SECTION 11.05 Notices..............................................................................43
SECTION 11.06 Notices to Rating Agency.............................................................43
SECTION 11.07 Severability of Provisions...........................................................44
SECTION 11.08 Successors and Assigns...............................................................44
SECTION 11.09 Article and Section Headings.........................................................44
EXHIBITS
Exhibit A-1 Form of Class [A-1] [A-2] [A-3] [S] Certificate
Exhibit A-2 Form of Class R Certificate
Exhibit B-1 Form of Transfer Affidavit and Agreement
Exhibit B-2 Form of Transferor Certificate
THIS TRUST AGREEMENT, dated as of [___________ 1, 20__], by and among
Taconic Asset Acceptance Company, L.L.C., as the company (together with its
permitted successors and assigns, the "COMPANY"), [______________] (together
with its permitted successors and assigns, the "CERTIFICATE ADMINISTRATOR") and
[_____________], as trustee (together with its permitted successors and assigns
(the "TRUSTEE")).
PRELIMINARY STATEMENT
The Company is the owner of the Underlying Agency Securities being
conveyed by it to the Trustee for inclusion in the Trust Fund and has duly
authorized the execution and delivery of this Agreement to provide for the sale
and conveyance to the Trustee of the Underlying Agency Securities and the
issuance of the Mortgage Pass-Through Certificates, Series 20[__-__], Class
[A-l], Class [A-2], Class [A-3], Class [S] and Class R (collectively, the
"CERTIFICATES"), representing in the aggregate all of the "regular interests"
and "residual interests" in the Trust Fund, which Certificates are issuable as
provided in this Agreement. All covenants and agreements made by the Company,
the Certificate Administrator and the Trustee herein are for the benefit of the
Holders of the Certificates. The Company and the Certificate Administrator are
entering into this Agreement, and the Trustee is accepting the trusts created
hereby, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged.
The Underlying Agency Securities are [GNMA] [I] [II] Certificates and
are identified as [____________]. The Aggregate Underlying Certificate Balance
as of the Closing Date will be $[____________].
The following table sets forth the designation, Pass-Through Rate,
aggregate Initial Certificate Principal Balance, features, Maturity Date and
initial rating for each Class of Certificates comprising the interests in the
Trust Fund created hereunder.
Pass-Through Aggregate Initial
Designation Rate Rate Principal Balance Features
----------------------- ------------ ----------------- ------------------
Class [A-1] [ ]% $[ ] Sequential
Class [A-2] [ ]% $[ ] Sequential
Class [A-3] [ ]% $[ ] Sequential/Accrual
Class [S] [ ]% $[ ] Fixed Strip
Class R [ ]% $[ ] Residual
Maturity Initial Rating
Designation Date [S&P] [Fitch] [▇▇▇▇▇'▇]
----------------------- ------------ ----------- -------------- -----------
Class [A-1]
Class [A-2]
Class [A-3]
Class [S]
Class R
In consideration of the premises and the mutual agreements herein
contained, the Company, the Certificate Administrator and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. Whenever used in this Agreement, the
following words and phrases, unless the context otherwise requires, shall have
the following meanings:
"ACCRETION TERMINATION DATE": With respect to the Class [A-3]
Certificates, the first Distribution Date on which the Certificate Principal
Balances of the Class R, Class [A-1] and Class [A-2] Certificates have been
reduced to zero.
"ACCRETION AMOUNT": As to any Distribution Date, the amount set forth
in SECTION 4.01(b).
"ACCRUED CERTIFICATE INTEREST": With respect to each Distribution Date,
(a) as to each Class of Certificates (other than the Class [S] Certificates),
one month's interest accrued on the Certificate Principal Balance of the
Certificates of such Class at the related Pass-Through Rate and (b) in the case
of the Class [S] Certificates, one month's interest accrued on the related
Notional Amount at the related Pass-Through Rate. Accrued Certificate Interest
will be calculated on the basis of a 360-day year consisting of twelve 30-day
months. In each case, Accrued Certificate Interest on any Class of Certificates
will be reduced by the amount (to the extent such amount is allocated to the
Underlying Agency Securities) of the following shortfalls: (i) Prepayment
Interest Shortfalls, and (ii) any other interest shortfalls, including interest
that is not collectible from the Mortgagor pursuant to the Soldiers' and
Sailors' Civil Relief Act of 1940, as amended; with all such reductions
allocated among the Certificates in proportion to their respective amounts of
Accrued Certificate Interest which would have resulted absent such reductions.
"AFFILIATE": An "affiliate" of, or Person "affiliated" with, a
specified Person, is a Person that directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the Person specified.
"AGGREGATE UNDERLYING CERTIFICATE BALANCE": As of any date of
determination, the aggregate of the Underlying Certificate Balances of all of
the Underlying Agency Securities as of such date. As of the Closing Date, the
Aggregate Underlying Certificate Balance was $[], after giving effect to
distributions made thereon prior to the Closing Date.
"AGREEMENT": This Trust Agreement together with all amendments hereof
and supplements hereto.
"ANTICIPATED TERMINATION DATE": Any Distribution Date on which the
Certificate Administrator anticipates that the Trust Fund will be terminated
pursuant to SECTION 9.01.
"AVAILABLE DISTRIBUTION AMOUNT": As of any Distribution Date, the
aggregate amount on deposit in the Certificate Account as of such Distribution
Date, net of any portion thereof which represents amounts payable pursuant to
CLAUSES (II) and (III) of SECTION 3.04.
"BUSINESS DAY": Any day other than (i) a Saturday or a Sunday, or (ii)
a day on which banking institutions in the State of New York[, the State of
[__________] or the State of [_________]] and such other state or states in
which the Certificate Account or any account relating to the Underlying Agency
Securities are required or authorized by law or executive order to be closed.
"CERTIFICATE": Any Class [A-1], Class [A-2], Class [A-3], Class [S] or
Class R Certificate.
"CERTIFICATE ACCOUNT": The trust account or accounts, which shall at
all times be Eligible Accounts, created and maintained by the Trustee pursuant
to SECTION 3.03. Funds deposited in the Certificate Account shall be held in
trust for the Certificateholders for the uses and purposes set forth in ARTICLE
III hereof.
"CERTIFICATE ADMINISTRATOR": [___________] or its successor in
interest, solely in its capacity as certificate administrator under this
Agreement, or any successor certificate administrator appointed as provided
herein.
"CERTIFICATEHOLDER OR HOLDER": The Person in whose name a Certificate
is registered in the Certificate Register, except that neither a Disqualified
Organization nor a Non-United States Person shall be a Holder of a Class R
Certificate for any purpose hereof. Solely for the purpose of giving any consent
or exercising any Voting Rights pursuant to this Agreement, any Certificate
registered in the name of the Company, the Certificate Administrator or any
Affiliate of either of them shall be deemed not to be Outstanding and the
Percentage Interest or Voting Rights evidenced thereby shall not be taken into
account in determining whether the requisite amount of Percentage Interests or
Voting Rights necessary to effect any such consent or direction has been
obtained.
"CERTIFICATE PRINCIPAL BALANCE": With respect to each Certificate
(other than the Class [S] Certificates), on any date of determination, an amount
equal to (i) the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof plus (ii) in the case of the Class [A-3]
Certificates, all Accrued Certificate Interest added to the Certificate
Principal Balances thereof on each Distribution Date on or prior to the
Accretion Termination Date pursuant to SECTION 4.01(b), minus (iii) the
aggregate of all amounts previously distributed with respect to such Certificate
and applied to reduce the Certificate Principal Balance thereof pursuant to
SECTION 4.01. The Class [S] Certificates have no Certificate Principal Balance.
"CERTIFICATE REGISTRAR AND CERTIFICATE REGISTER": The registrar
appointed and the register maintained pursuant to SECTION 5.02.
"CLASS": Collectively, all of the Certificates bearing the same
designation.
"CLASS [A-1] CERTIFICATE": Any one of the Class [A-1] Certificates,
executed by the Trustee and authenticated by the Certificate Registrar,
substantially in the form annexed hereto as EXHIBIT A-1 and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"CLASS [A-2] CERTIFICATE": Any one of the Class [A-2] Certificates,
executed by the Trustee and authenticated by the Certificate Registrar,
substantially in the form annexed hereto as EXHIBIT A-1 and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"CLASS [A-3] CERTIFICATE": Any one of the Class [A-3] Certificates,
executed by the Trustee and authenticated by the Certificate Registrar,
substantially in the form annexed hereto as EXHIBIT A-1 and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC Provisions.
"CLASS R CERTIFICATE": Any one of the Class R Certificates, executed by
the Trustee and authenticated by the Certificate Registrar, substantially in the
form annexed hereto as EXHIBIT A-2 and evidencing an interest designated as a
"residual interest" in the REMIC for purposes of the REMIC Provisions.
"CLASS [S] CERTIFICATE": Any one of the Class [S] Certificates,
executed by the Trustee and authenticated by the Certificate Registrar,
substantially in the form annexed hereto as EXHIBIT A-1 and evidencing an
interest designated as a "regular interest" in the REMIC for purposes of the
REMIC provisions.
"CLOSING DATE": [_________, 20__].
"CODE": The Internal Revenue Code of 1986.
"CORPORATE TRUST OFFICE": The principal corporate trust office of the
Trustee in the State of New York at which at any particular time its corporate
trust business with respect to this Agreement shall be administered, which
office at the date of the execution of this Agreement is located at [_________].
"DISQUALIFIED ORGANIZATION": Any of the following: (i) the United
States, any State or political subdivision thereof, any possession of the United
States, or any agency or instrumentality of any of the foregoing (other than an
instrumentality which is a corporation if all of its activities are subject to
tax and, except for the FHLMC, a majority of its board of directors is not
selected by such governmental unit), (ii) a foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing, (iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is exempt from the tax imposed by
Chapter 1 of the Code (unless such organization is subject to the tax imposed by
Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381 (a) (2) (C) of the
Code and (v) any other Person so designated by the Trustee based upon an Opinion
of Counsel that the holding of an Ownership Interest in a Class R Certificate by
such Person may cause Trust Fund or any Person having an ownership Interest in
any Class of Certificates, other than such Person, to incur a liability for any
federal tax imposed under the Code that would not otherwise be imposed but for
the Transfer of an Ownership Interest in a Class R Certificate to such Person.
The terms "United States", "State" and "international organization" shall have
the meanings set forth in Section 7701 of the Code or successor provisions.
"DISTRIBUTION DATE": The third Business Day following each Underlying
Security Distribution Date, commencing with the Distribution Date on
[___________, 20__].
"ELIGIBLE ACCOUNT": An account that is any of the following: (i)
maintained with a depository institution the debt obligations of which have been
rated by the Rating Agency in its highest rating available, (ii) an account or
accounts in a depository institution in which such accounts are fully insured to
the limits established by the FDIC, provided that any such deposits not so
insured shall, to the extent acceptable to the Rating Agency, as evidenced in
writing, be maintained such that (as evidenced by an Opinion of Counsel
delivered to the Trustee and the Rating Agency) the registered Holders of
Certificates have a claim with respect to the funds in such account or a
perfected first security interest against any collateral (which shall be limited
to Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, (iii) a trust account or accounts maintained in the
corporate trust department of [________], or (iv) an account or accounts of a
depository institution acceptable to the Rating Agency (as evidenced in writing
by the Rating Agency that use of any such account as the Certificate Account
will not reduce the rating assigned to the Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency).
"ERISA": The Employment Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT": As defined in SECTION 7.01.
["GNMA ISSUER": Any one of the mortgage banking companies or other
financial concerns approved by GNMA that has issued and is servicing an
Underlying Security.]
"INDEPENDENT": When used with respect to any specified Person, such a
Person who (i) is in fact independent of the Company, the Certificate
Administrator and the Trustee, or any Affiliate thereof, (ii) does not have any
direct financial interest in the Company, the Certificate Administrator and the
Trustee, or any Affiliate thereof, and (iii) is not connected with the Company,
the Certificate Administrator and the Trustee as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions.
"INITIAL CERTIFICATE PRINCIPAL BALANCE": With respect to each
Certificate (other than a Class [S] Certificate) the initial Certificate
Principal Balance of such Certificate as specified on the face thereof as of the
Closing Date.
"MATURITY DATE": The latest possible maturity date, solely for purposes
of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, by which the
Certificate Principal Balance of each Class of Certificates representing a
regular interest in the REMIC would be reduced to zero, which shall be the
Distribution Date immediately following the latest stated maturity date of any
of the Underlying Agency Securities.
"MORTGAGE LOANS": With respect to any Underlying Agency Security, the
mortgage loans in which such Underlying Agency Security evidence a beneficial
ownership interest.
"NON-UNITED STATES PERSON": Any Person other than a United States
Person.
"NOTICE OF FINAL DISTRIBUTION": With respect to any Underlying Agency
Security, the notice to be provided pursuant to the Trustee as holder of such
Underlying Agency Security to the effect that final distribution on such
Underlying Agency Security shall be made only upon presentation and surrender
thereof.
"NOTICE OF TERMINATION": Any of the notices given to the Trustee by the
Certificate Administrator pursuant to SECTION 9.01(b).
"NOTIONAL AMOUNT": As of any Distribution Date, with respect to the
Class [S] Certificates, the Aggregate Underlying Certificate Balance immediately
prior to the most recent Underlying Security Distribution Date.
"OFFICER'S CERTIFICATE": A certificate signed by the President, Chief
Financial Officer, Treasurer, any Vice President, Secretary or any other officer
authorized by the board of directors of the Company, the Certificate
Administrator or the Trustee, as required by this Agreement.
"OPINION OF COUNSEL": A written opinion of counsel, who may be counsel
for the Company or the Certificate Administrator, which opinion is reasonably
acceptable to the Trustee; except that any opinion of counsel relating to (i)
the qualification of any account required to be maintained pursuant to this
Agreement as an Eligible Account or (ii) the qualification of the Trust Fund as
a REMIC or compliance with the REMIC Provisions, must be an opinion of
Independent counsel.
"OUTSTANDING": With respect to the Certificates, as of the date of
determination, all Certificates previously executed and delivered under this
Agreement except (i) Certificates previously canceled by the Trustee or
delivered to the Trustee for cancellation; and (ii) Certificates in exchange for
which or in lieu of which other Certificates have been executed and delivered
pursuant to this Agreement.
"OWNERSHIP INTEREST": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
"PASS-THROUGH RATE": With respect to each Class of Certificates, the
respective per annum rate set forth in the Preliminary Statement hereto.
"PAYING AGENT": Any Paying Agent appointed by the Trustee.
"PERCENTAGE INTEREST": With respect to a Certificate (other than a
Class [S] Certificate or a Class R Certificate), the undivided percentage
ownership interest in the related Class evidenced by such Certificate, which
percentage ownership interest shall be equal to the Initial Certificate
Principal Balance thereof divided by the aggregate Initial Certificate Principal
Balance of all of the Certificates of the same Class. With respect to a Class
[S] Certificate or a Class R Certificate, the interest in distributions to be
made with respect to such Class evidenced thereby, expressed as a percentage, as
stated on the face of such Certificate.
"PERMITTED INVESTMENTS": One or more of the following:
(i) obligations of, or guaranteed as to principal and interest
by, the United States or any agency or instrumentality thereof when
such obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause
(i) maturing not more than one month from the date of acquisition
thereof, provided that the unsecured obligations of the party agreeing
to repurchase such obligations are at the time rated by the Rating
Agency in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution
or trust company; PROVIDED that the debt obligations of such depository
institution or trust company (or, if the only Rating Agency is Standard
& Poor's in the case of the principal depository institution in a
depository institution holding company, debt obligations of the
depository institution holding company) at the date of acquisition
thereof have been rated by the Rating Agency in its highest short-term
rating available; and PROVIDED FURTHER that if the only Rating Agency
is Standard & Poor's and if the depository or trust company is a
principal subsidiary of a bank holding company and the debt obligations
of such subsidiary are not separately rated, the applicable rating
shall be that of the bank holding company; and PROVIDED FURTHER that,
if the original maturity of such short-term obligations of a domestic
branch of a foreign depository institution or trust company shall
exceed 30 days, the short-term rating of such institution shall be A-1+
if Standard & Poor's is the Rating Agency;
(iv) commercial paper (having original maturities of not more
than 365 days) of any corporation incorporated under the laws of the
United States or any state thereof which on the date of acquisition has
been rated by the Rating Agency in its highest short-term rating
available; PROVIDED that such commercial paper shall have a remaining
maturity of not more than 30 days;
(v) a money market fund or qualified investment fund rated by
the Rating Agency in its highest rating available; and
(vi) other obligations or securities that are acceptable to
the Rating Agency as a Permitted Investment hereunder and will not
reduce the rating assigned to the Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to
the Certificates as of the Closing Date by such Rating Agency, as
evidenced in writing; PROVIDED, HOWEVER, that no instrument shall be a
Permitted Investment if it represents, either (1) the right to receive
only interest payments with respect to the underlying debt instrument
or (2) the right to receive both principal and interest payments
derived from obligations underlying such instrument and the principal
payments with respect to such instrument provide a yield to maturity
greater than 120% of the yield to maturity at par of such underlying
obligations. References herein to the highest rating available on
unsecured long-term debt shall mean Aaa in the case of ▇▇▇▇▇'▇
Investors Service, Inc., AAA in the case of Standard & Poor's and Fitch
Investors Service, Inc. and in the case of any other Rating Agency
shall mean such ratings without any plus or minus, and references
herein to the highest rating available on unsecured commercial paper
and short-term debt obligations shall mean P-1 in the case of ▇▇▇▇▇'▇
Investors Service, Inc., A-1 in the case of Standard & Poor's and
either A-1 by Standard & Poor's, P-1 by ▇▇▇▇▇'▇ Investors Service, Inc.
or F-1 by Fitch Investors Service, Inc. in the case of Fitch Investors
Service, Inc.
"PERMITTED TRANSFEREE": Any Transferee of a Class R Certificate, other
than a Disqualified Organization or a Non-United States Person.
"PERSON": Any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PREPAYMENT ASSUMPTION": A prepayment assumption of [__]% of the
standard prepayment assumption used for determining the accrual of original
issue discount and market discount on the Certificates for federal income tax
purposes. The standard prepayment assumption assumes a constant rate of
prepayment of mortgage loans of [__]% per annum of the outstanding principal
balance of such mortgage loans in the first month of life of the mortgage loans,
increasing by an additional [__]% per annum in each succeeding month until the
thirtieth month, and a constant [__]% per annum rate of prepayment thereafter
for the life of the mortgage loans.
"PRINCIPAL DISTRIBUTION AMOUNT": With respect to any Distribution Date,
the sum of (i) the aggregate of the Underlying Certificate Principal
Distribution Amount for the immediately preceding Underlying Security
Distribution Date, plus any amounts received as described in SECTION 3.03(A)(II)
since the preceding Distribution Date to the extent allocated to principal of
one or more Underlying Agency Securities and (ii) the Accretion Amount.
"RATING AGENCIES": [________] and [________]. If an agency or a
successor is no longer in existence, "Rating Agency" shall include such
statistical credit rating agency, or other comparable Person, designated by the
Company, notice of which designation shall be given to the Trustee and the
Certificate Administrator.
"RECORD DATE": With respect to any Distribution Date, other than the
first Distribution Date, the last Business Day of the month preceding the month
in which the Underlying Security Distribution Date on the Underlying Agency
Securities occurs and with respect to the first Distribution Date, the Closing
Date.
"REFERENCE DATE": [______________ 1, 20__].
"REGULAR CERTIFICATES": Any of the Certificates other than the Class R
Certificates.
"REMIC": A "real estate mortgage investment conduit" within the meaning
of Section 860D of the Code.
"REMIC PROVISIONS": Provisions of the federal income tax law relating
to REMICs, which appear at Sections 860A through 860G of Subchapter M of Chapter
1 of the Code, and related provisions, and temporary and final regulations (or,
to the extent not inconsistent with such temporary or final regulations,
proposed regulations) and published rulings, notices and announcements
promulgated thereunder, as the foregoing may be in effect from time to time.
"RESIDUAL CERTIFICATE": Any one of the Class R Certificates.
"RESPONSIBLE OFFICER": When used with respect to the Trustee, any
officer of the Trustee employed in its corporate trust department, including any
Senior Vice President, any Vice President, any Assistant Vice President, any
Assistant Secretary, any Trust Officer or Assistant Trust Officer or Assistant
Trust Officer, or any other officer of the Trustee customarily performing
functions similar to those performed by any of the above designated officers to
whom, with respect to a particular matter arising under this Agreement, such
matter is referred.
"SERVICING FEE": With respect to any Distribution Date, the fee payable
monthly to the Certificate Administrator in respect of its compensation
hereunder that accrues at an annual rate equal to [__]% on the Aggregate
Underlying Certificate Balance as in effect immediately prior to the preceding
Underlying Security Distribution Date.
"SERVICING OFFICER": Any officer of the Certificate Administrator
involved in, or responsible for, the administration and servicing of the Trust
Fund whose name and specimen signature appear on a list of servicing officers
furnished to the Trustee by the Certificate Administrator, as such list may from
time to time be amended.
"STANDARD & POOR'S": Standard & Poor's Ratings Group or its successor
in interest.
"TAX RETURNS": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of the Trust Fund due to its classification as a REMIC
under the REMIC Provisions, together with any and all other information, reports
or returns that may be required to be furnished to the Certificateholders or
filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws.
"TERMINATION DATE": The Distribution Date on which the Trust Fund is
terminated pursuant to SECTION 9.01.
"TRUST FUND": The corpus of the trust created by and to be administered
under this Agreement consisting of: (i) the Underlying Agency Securities, (ii)
all distributions thereon payable after the Closing Date and (iii) the
Certificate Account and such assets that are deposited therein from time to
time, together with any and all income, proceeds and payments with respect
thereto.
"TRUSTEE": [________], a [national bank] [[state bank] [trust company]
[organized under the laws of [_________]] or its successor in interest, or any
successor trustee appointed as herein provided.
"UNDERLYING SECURITY": Any of the [GNMA] [I] [II] Certificates
transferred to the Trustee by the Company pursuant to SECTION 2.01 to be held as
a part of the Trust Fund, as more fully described in the Preliminary Statement
hereto.
"UNDERLYING AGENCY SECURITYHOLDER": The registered holder of any
Underlying Agency Security which, following the execution and delivery of this
Agreement by the parties hereto, shall be the Trustee for the benefit of the
Certificateholders.
"UNDERLYING CERTIFICATE BALANCE": With respect to any Underlying Agency
Security, as of any Underlying Security Distribution Date (following all
distributions to be made with respect to the Underlying Agency Security on such
Underlying Security Distribution Date), and as of any date of determination
thereafter until the next succeeding Underlying Security Distribution Date, the
principal balance of such Underlying Agency Security as set forth in, or
calculated in accordance with the terms of such Underlying Agency Security on
the basis of, the Underlying Security Distribution Date Statement sent to the
Trustee as Underlying Agency Securityholder relating to such Underlying Security
Distribution Date.
"UNDERLYING CERTIFICATE PRINCIPAL DISTRIBUTION AMOUNT": With respect to
any Distribution Date, the aggregate amount actually distributed on the
Underlying Agency Securities on the immediately preceding Underlying Security
Distribution Date and identified as applied to reduce the related Underlying
Certificate Balance in the respective Underlying Security Distribution Date
Statement.
"UNDERLYING CERTIFICATE RATE": With respect to any Underlying Agency
Security and any Underlying Security Distribution Date, the rate per annum at
which interest payable with respect to such Underlying Agency Security on such
Underlying Security Distribution Date accrued.
"UNDERLYING SECURITY DISTRIBUTION DATE": With respect to any Underlying
Agency Security, the "Distribution Date", as such term is defined on such
Underlying Agency Security.
"UNDERLYING SECURITY DISTRIBUTION DATE STATEMENT": With respect to any
Underlying Agency Security and any Underlying Security Distribution Date, the
monthly remittance report forwarded to the holder thereof with respect to such
Underlying Security Distribution Date pursuant to such Underlying Agency
Security.
"UNITED STATES PERSON": A citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States. The
term "United States" shall have the meaning set forth in Section 7701 of the
Code or successor provisions.
"VOTING RIGHTS": The portion of the voting rights of all Certificates
which is allocated to any Certificate. For so long as the related Classes of
Certificates remain outstanding, [__]% of all of the Voting Rights shall be
allocated among all Holders of the Class [A-1] Certificates, Class [A-2]
Certificates and Class [A-3] Certificates in proportion to their then
outstanding Certificate Principal Balances; and [__]% and [__]% of the Voting
Rights shall be allocated among the Class [S] and the Class R Certificates,
respectively, in proportion to the Percentage Interests evidenced by their
respective Certificates.
ARTICLE II
CONVEYANCE OF THE UNDERLYING MORTGAGE SECURITIES; ORIGINAL
ISSUANCE OF THE CERTIFICATES
SECTION 2.01 CONVEYANCE OF THE UNDERLYING AGENCY SECURITIES. The
Company, concurrently with the execution and delivery hereof, does hereby sell,
transfer, assign, set-over and otherwise convey to the Trustee, in trust, for
the use and benefit of the Certificateholders, without recourse, all the right,
title and interest of the Company in and to the Underlying Agency Securities and
all other assets constituting the Trust Fund. Such assignment includes, without
limitation, all amounts payable to and all rights of the Underlying Agency
Securityholders after the Closing Date.
In connection with such transfer and assignment, the Company does
hereby deliver to, and deposit with, the Trustee each of the Underlying Agency
Securities, together with the following documents or instruments relating to
each Underlying Agency Security:
(i) a duly issued and authenticated certificate for each
Underlying Agency Security, each evidencing the entire interest in such
[series and class] and registered in the name of "[Name of Trustee], as
trustee under the Trust Agreement relating to Mortgage Pass-Through
Certificates, Series 20[__-__]"; and
(ii) copies of the most recent Underlying Security
Distribution Date Statements, if any, delivered to the related
Underlying Agency Securityholder with respect to such Underlying Agency
Security.
The transfer of the Underlying Agency Securities and all other assets
constituting the Trust Fund is absolute and is intended by the parties hereto as
a sale by the Company to the Trustee of the Underlying Agency Securities for the
benefit of the Certificateholders. Except as provided in SECTIONS 3.02(b) and
9.01 hereof, the Trustee shall not assign, sell, dispose of or transfer any
interest in the Underlying Agency Securities or any other asset constituting the
Trust Fund or permit the Underlying Agency Securities or any other asset
constituting the Trust Fund to be subjected to any lien, claim or encumbrance
arising by, through or under the Trustee or any Person claiming by, through or
under the Trustee.
SECTION 2.02 ACCEPTANCE BY TRUSTEE. The Trustee hereby acknowledges
receipt of the documents referred to in SECTION 2.01(i) and (ii) above and
declares that it holds and will hold the Underlying Agency Securities and such
other documents and instruments delivered to it with respect to the Underlying
Agency Securities in trust for the use and benefit of all present and future
Certificateholders. Upon delivery of any document or instrument relating to a
Underlying Agency Security by the Company or the Certificate Administrator, the
Trustee shall acknowledge receipt of such documents.
SECTION 2.03 EXECUTION AND AUTHENTICATION OF CERTIFICATES. Concurrently
with the transfer and delivery of the Underlying Agency Securities and all
related documents and instruments, the Trustee has executed, authenticated and
delivered, to or upon the order of the Company, the Certificates duly executed
and authenticated by the Trustee in authorized Percentage Interests, registered
in such names as the Company has requested.
ARTICLE III
ADMINISTRATION OF THE UNDERLYING AGENCY SECURITIES; REPORTS TO
CERTIFICATEHOLDERS
SECTION 3.01 ADMINISTRATION OF THE TRUST FUND AND THE UNDERLYING AGENCY
SECURITIES. (a) If at any time the Trustee, as Underlying Agency Securityholder,
is requested in such capacity to take any action or to give any consent,
approval or waiver, or if an Event of Default as defined under the terms of the
Underlying Agency Security occurs, the Trustee, in its capacity as Underlying
Agency Securityholder, may take such action in connection with the enforcement
of any rights and remedies available to it in such capacity with respect thereto
and only in accordance with the written directions of Holders of Certificates
evidencing at least 51% of the Voting Rights. The Trustee shall promptly notify
all of the Certificateholders of any such request.
(b) The holders of the Class R Certificates shall pay in proportion to
their ownership interests in such Class R Certificates any taxes imposed on the
Trust Fund resulting from the Certificate Administrator's exercise of any option
to repurchase any of the Underlying Agency Securities in accordance with the
Assignment and Assumption Agreement.
SECTION 3.02 COLLECTION OF MONIES. (a) In connection with its receipt
of any distribution on a Underlying Agency Security on any Underlying Security
Distribution Date, the Trustee shall review the Underlying Security Distribution
Date Statement and shall confirm that the information contained therein is
arithmetically correct. If (i) the Trustee shall not have received a
distribution on any Underlying Agency Security by the close of business on the
date on which such distribution was to be received by the Trustee, the Trustee
shall notify the Certificate Administrator if such distribution shall not have
been received by the Trustee one Business Day following such notice or (ii) the
Trustee shall gain actual knowledge of any event of default under and as defined
in any Underlying Agency Security, the Trustee shall promptly notify the
Certificate Administrator and the Certificateholders and such parties shall
proceed in accordance with the terms and conditions of SECTION 3.01(a).
(b) Except as otherwise provided in SECTION 9.01, upon its receipt of a
Notice of Final Distribution, the Trustee shall present and surrender the
applicable Underlying Agency Security to which such notice applies for final
payment thereon in accordance with the terms and conditions of such Underlying
Agency Security and such Notice of Final Distribution. The Trustee shall
promptly deposit in the Certificate Account the final distribution received upon
presentation and surrender of such Underlying Agency Security.
SECTION 3.03 ESTABLISHMENT OF CERTIFICATE ACCOUNT; DEPOSITS IN
CERTIFICATE ACCOUNT. (a)The Trustee, for the benefit of the Certificateholders,
shall establish and maintain one or more accounts (collectively, the
"CERTIFICATE ACCOUNT"), each of which shall be an Eligible Account, entitled
"[Name of Trustee], in trust for the registered holders of Mortgage Pass-Through
Certificates, Series 20[__-__]", held in trust by the Trustee for the benefit of
the Certificateholders. The Trustee shall cause the following payments and
collections in respect of the Underlying Agency Securities to be deposited
directly into the Certificate Account:
(i) all distributions received on the Underlying Agency
Securities subsequent to the Closing Date;
(ii) any amounts received in connection with the sale of the
Underlying Agency Securities pursuant to SECTION 9.01 in accordance
with a plan of complete liquidation of the Trust Fund meeting the
requirements of Section 860F(a)(4)A of the Code[, or in connection with
any optional repurchase by the Certificate Administrator or any GNMA
Issuer of any Underlying Security]; and
(iii) any other amounts specifically required to be deposited
in the Certificate Account hereunder.
The foregoing requirements for deposit in the Certificate Account shall
be exclusive.
(b) Funds in the Certificate Account shall be invested by the Trustee
in Permitted Investments in accordance with the provisions set forth in SECTION
4.04. The Trustee shall give notice to the Certificate Administrator and the
Company of the location of each Certificate Account upon establishment thereof
and prior to any change thereof.
SECTION 3.04 PERMITTED WITHDRAWALS FROM THE CERTIFICATE ACCOUNT. The
Trustee shall from time to time withdraw funds from the Certificate Account for
the following purposes:
(i) to make distributions in the amounts and in the manner
provided for in SECTION 4.01;
(ii) to pay to the Certificate Administrator on each
Distribution Date, as compensation for its services hereunder, the
Servicing Fee plus any investment income on amounts in the Certificate
Account;
(iii) to reimburse the Company or the Certificate
Administrator for expenses incurred by and reimbursable to the Company
or the Certificate Administrator pursuant to SECTION 6.03, SECTIONS
10.01(c) and (g) or as otherwise permitted under this Agreement; and
(iv) to clear and terminate the Certificate Account upon the
termination of this Agreement.
On each Distribution Date, the Trustee shall withdraw all funds from
the Certificate Account and shall use such funds withdrawn from the Certificate
Account only for the purposes described in this SECTION 3.04 and in SECTION
4.01.
SECTION 3.05 ANNUAL STATEMENT AS TO COMPLIANCE. On or before March 31st
of each calendar year, beginning with calendar year [20__], the Certificate
Administrator shall deliver to the Trustee an Officer's Certificate stating that
(a) a review of the activities of the Certificate Administrator during the
preceding calendar year and of its performance under this Agreement (and similar
agreements) has been made under the supervision of the officer signing such
certificate and (b) to the best of such officer's knowledge, based on such
review, the Certificate Administrator has fulfilled in all material respects all
of its material obligations under this Agreement (and similar agreements)
throughout such year, or, if there has been a default in the fulfillment in any
material respect of any such obligation, specifying each such default known to
such officer, the nature and status thereof.
SECTION 3.06 RIGHTS OF THE COMPANY IN RESPECT OF THE CERTIFICATE
ADMINISTRATOR. The Certificate Administrator shall afford the Company, upon
reasonable notice, during normal business hours access to all records maintained
by the Certificate Administrator in respect of its rights and obligations
hereunder and access to officers of the Certificate Administrator responsible
for such obligations. Upon request, the Certificate Administrator shall furnish
the Company with its most recent financial statements and such other information
as the Certificate Administrator possesses regarding its business, affairs,
property and condition, financial or otherwise. The Certificate Administrator
shall also cooperate with all reasonable requests for information including, but
not limited to, notices and copies of files, regarding itself, the Underlying
Agency Securities or the Certificates from any Person or Persons identified by
the Company or the Certificate Administrator. The Company may, but is not
obligated to, enforce the obligations of the Certificate Administrator hereunder
and may, but is not obligated to, perform, or cause a designee to perform, any
defaulted obligation of the Certificate Administrator hereunder or exercise the
rights of the Certificate Administrator hereunder; provided that the Certificate
Administrator shall not be relieved of any of its obligations hereunder by
virtue of such performance by the Company or its designee. The Company shall not
have any responsibility or liability for any action or failure to act by the
Certificate Administrator and is not obligated to supervise the performance of
the Certificate Administrator under this Agreement or otherwise.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01 DISTRIBUTIONS. (a) On the Business Day prior to each
Distribution Date, the Certificate Administrator shall provide written notice to
the Trustee indicating the amount of Accrued Certificate Interest on each Class
of the Certificates, and the Principal Distribution Amount and the allocation
thereof to each Class of Certificates, for such Distribution Date. On each
Distribution Date, the Trustee shall withdraw from the Certificate Account all
funds then on deposit, and the Trustee or the Paying Agent appointed by the
Trustee shall distribute to the Holders of each respective Class of
Certificates, from such Available Distribution Amount, the following amounts, in
the following order of priority, in each case to the extent of the Available
Distribution Amount:
(i) first, concurrently to the Class [A-1] Certificateholders,
Class [A-2] Certificateholders, Class [S] Certificateholders and Class
R Certificateholders on a pro rata basis based on the Accrued
Certificate Interest payable thereon, Accrued Certificate Interest on
such Class of Certificates as applicable for such Distribution Date,
plus any Accrued Certificate Interest thereon remaining unpaid for any
previous Distribution Date;
(ii) second, an amount equal to the Principal Distribution
Amount shall be distributed in reduction of the Certificate Principal
Balances of the Classes set forth below as follows:
(A) first, to the Class R Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(B) second, to the Class [A-1] Certificates, until
the Certificate Principal Balance thereof is reduced to zero;
and
(C) third, to the Class [A-2] Certificates, until the
Certificate Principal Balance thereof is reduced to zero;
(iii) third, to the Class [A-3] Certificateholders, Accrued
Certificate Interest on such Classes of Certificates as applicable for
such Distribution Date, plus any Accrued Certificate Interest thereon
remaining unpaid from any previous Distribution Date (to the extent
such unpaid Accrued Certificate Interest does not constitute an
Accretion Amount);
(iv) fourth, an amount equal to the Principal Distribution
Amount remaining after the distribution described in CLAUSE (ii) above
shall be distributed in reduction of the Certificate Principal Balance
of the Class [A-3] Certificates, until the Certificate Principal
Balance thereof is reduced to zero;
PROVIDED, that if such Distribution Date is on or prior to the Accretion
Termination Date, no distribution shall be made pursuant to CLAUSE (iii) above
to the Class [A-3] Certificateholders to the extent that Accrued Certificate
Interest is not then payable in accordance with SECTION 4.01(b); and PROVIDED
FURTHER, that the amount available for interest distributions on the
Certificates on any Distribution Date as described above shall not exceed the
aggregate amount distributed on the Underlying Agency Securities on the
preceding Underlying Security Distribution Date in respect of interest, reduced
by the Servicing Fee; and PROVIDED FURTHER, that no such unpaid Accrued
Certificate Interest on the Certificates will be carried forward to the extent
that the corresponding amount of any shortfall in interest distributions on any
of the Underlying Agency Securities on the preceding Underlying Security
Distribution Date is not carried forward with respect to such Underlying Agency
Securities;
(b) On each Distribution Date prior to the Accretion Termination Date,
an amount equal to the amount of Accrued Certificate Interest on the Class [A-3]
Certificates for such Distribution Date that would otherwise be distributed on
such Certificates on such Distribution Date pursuant to SECTION 4.01(a)(iii)
shall be added to the Certificate Principal Balance thereof (such amount, the
"ACCRETION AMOUNT"). On and after the Accretion Termination Date, the entire
amount of Accrued Certificate Interest on the Class [A-3] Certificates for such
Distribution Date shall be payable to such Certificates to the extent not
required to retire fully the Class [A-1], Class [A-2] and Class R Certificates
on the Accretion Termination Date. Any Accrued Certificate Interest on the Class
[A-3] Certificates which is required to be paid to the holders of the Class
[A-1], Class [A-2] or Class R Certificates on the Accretion Termination Date as
provided in the preceding sentence will be added to the Certificate Principal
Balance of the Class [A-3] Certificates in the manner described in the first
sentence of this SECTION 4.01(b).
(c) Payments on each Distribution Date will be made to the
Certificateholders of record on the related Record Date. Distributions to any
Certificateholder on any Distribution Date shall be made by wire transfer of
immediately available funds to the account of such Certificateholder at a bank
or other entity having appropriate facilities therefor, if such
Certificateholder shall have so notified the Trustee or the Paying Agent in
writing at least five Business Days prior to the Record Date and if the
aggregate amount of distribution to be made to such Holder is at least $10,000,
or in such other manner as shall be agreed to by the Trustee and such
Certificateholder, or otherwise by check mailed by first class mail to the
address of such Certificateholder appearing in the Certificate Register. Final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the Corporate Trust Office or
such other location specified in the notice to Certificateholders of such final
distribution.
(d) Except as otherwise provided in SECTION 9.01, whenever the Trustee,
as of five Business Days prior to any Record Date, expects that the final
distribution with respect to the Certificates will be made on the related
Distribution Date, the Trustee shall, no later than such related Record Date
mail to each Holder of the Certificates on such date a notice to the effect
that:
(i) the Trustee expects that the final distribution with
respect to the Certificates will be made on such Distribution Date but
only upon presentation and surrender of such Certificates at the office
of the Trustee therein specified; and
(ii) no interest shall accrue on such Certificates from and
after such Distribution Date.
SECTION 4.02 STATEMENTS TO CERTIFICATEHOLDERS. On each Distribution
Date, the Certificate Administrator shall prepare and the Trustee shall forward
by mail a statement to each Certificateholder stating:
(i) the Available Distribution Amount for such Distribution
Date and the respective portions thereof constituting interest and
principal distributions on the Underlying Agency Securities;
(ii) with respect to such Distribution Date, the aggregate
amount of Accrued Certificate Interest and the amounts of interest and
principal distributed to the Certificateholders of each Class on such
Distribution Date pursuant to SECTION 4.01;
(iii) the respective amounts of any prepayments and any
purchases of mortgage Loans (due to conversion or otherwise) included
in such distributions;
(iv) the Certificate Principal Balance or Notional Amount of
the Certificates of each Class after giving effect to distributions of
principal on such Distribution Date; and
(v) the Underlying Certificate Balance for each Underlying
Agency Security as of the Underlying Security Distribution Date
immediately preceding such Distribution Date, after giving effect to
the distribution of principal made thereon on such Underlying Security
Distribution Date.
In the case of the information furnished pursuant to CLAUSE (ii) above,
the amounts shall also be expressed as a dollar amount per Certificate
evidencing a $1,000 denomination.
In addition, the Trustee promptly will furnish to Certificateholders
and the Certificate Administrator copies of any notices, statements, reports or
other communications including, without limitation, the Underlying Security
Distribution Date Statements (or, in lieu thereof, if the Certificate
Administrator so elects, a summary report of information relevant to the
Certificates, reported by the [GNMA] with regard to the Underlying Agency
Securities) for each Underlying
Security Distribution Date, received by the Trustee as the Underlying
Agency Securityholder.
On or before March 31st of each calendar year, beginning with calendar
year 20[__], the Trustee shall prepare and deliver by first class mail to each
Person who at any time during the previous calendar year was a Certificateholder
of record a statement containing the information required to be contained in the
regular monthly report to Certificateholders, as set forth in CLAUSE (II) above
aggregated for such calendar year or the applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code and regulations thereunder as from time to time are in force. The Trustee,
upon request, will furnish the Certificate Administrator with all information
the Trustee has as may reasonably be requested in connection with the
preparation by the Certificate Administrator of all tax returns described in
SECTION 10.01.
SECTION 4.03 ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION. The
Trustee shall provide to the Certificateholders access to certificates and all
reports, documents and records maintained by the Trustee in respect of its
duties hereunder, such access being afforded without charge but only upon
reasonable written request and during normal business hours at offices
designated by the Trustee.
SECTION 4.04 PERMITTED INVESTMENTS. The Certificate Administrator shall
direct any institution maintaining the Certificate Account to invest the funds
in such Certificate Account in Permitted Investments, which shall mature not
later than the Business Day immediately preceding the next Distribution Date
(except that, (i) any investment in the institution with which the Certificate
Account is maintained may mature on such Distribution Date and (ii) any other
investment may mature on such Distribution Date if the Trustee shall advance
funds on such Distribution Date to the Certificate Account in the amount payable
on such investment on such Distribution Date, pending receipt thereof to the
extent necessary to make distributions on the Certificates), and shall not be
sold or disposed of prior to their maturity. All such Permitted Investments
shall be made in the name of the Trustee, in trust for the Holders of the
Certificates, or its nominee. All income and gain received from any such
investment shall be deposited in the appropriate Certificate Account and may
only be withdrawn and applied for the purposes set forth in SECTION 3.04. The
amount of any losses incurred in respect of any such investments shall be
deposited in the Certificate Account by the Certificate Administrator out of its
own funds immediately as realized.
ARTICLE V
THE CERTIFICATES
SECTION 5.01 THE CERTIFICATES. The Certificates shall be substantially
in the form set forth in EXHIBITS A-1 and A-2 hereto. The Certificates (other
than the Class [S] Certificates and the Class R Certificates) will be issuable
in registered form, with minimum initial Certificate Principal Balances as of
the Closing Date of $[_______] and integral multiples of $[_____] in excess
thereof[; PROVIDED, HOWEVER, that one Class [___] Certificate will be issued in
an initial denomination equal to $[_______], or the sum of $[_______] and any
integral multiple of $[_______]]. The Class [S] Certificates and the Class R
Certificates will be issuable in registered form, in minimum denominations of
not less than a [___]% Percentage Interest; [PROVIDED, HOWEVER, that at all
times one Class R Certificate will be held by [the Certificate Administrator] as
"tax matters person" pursuant to SECTION 10.01(c) in a minimum denomination
representing a Percentage Interest of not less than 0.01%].
The Certificates shall be executed by manual or facsimile signature on
behalf of an authorized officer of the Trustee. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the authorized
officers of the Trustee shall bind the Trustee, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the
authentication and delivery of such Certificates or did not hold such offices at
the date of such Certificates. No Certificate shall be entitled to any benefit
under this Agreement, or be valid for any purpose, unless there appears on such
Certificate a certificate of authentication substantially in the form provided
for herein executed by the Certificate Registrar by manual signature, and such
certificate upon any Certificate shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
SECTION 5.02 REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES. (a)
The Trustee shall cause to be kept at one of the offices or agencies to be
appointed by the Trustee in accordance with the provisions of this SECTION 5.02
a Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided. The Trustee
is initially appointed Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided. The
Certificate Registrar, or the Trustee, shall provide the Certificate
Administrator with a certified list of Certificateholders as of each Record Date
prior to the Distribution Date. Upon satisfaction of the conditions set forth
below, the Trustee shall execute and the Certificate Registrar shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of a like Class and aggregate
Percentage Interest. In addition, the Trustee shall notify the Company of every
proposed transfer or exchange of the Certificates.
(b) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and the Certificate Registrar
shall authenticate and deliver the Certificates which the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for transfer or exchange shall (if so required by the Trustee or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by, the Holder thereof or his attorney duly authorized
in writing.
(c) In the case of any Certificate presented for registration in the
name of an employee benefit plan or other plan subject to the fiduciary
responsibility provisions of ERISA, or Section 4975 of the Code (or comparable
provisions of any subsequent enactments), an investment manager, a named
fiduciary or a trustee of such plan, or any other Person who is using "plan
assets" of any such plan to effect such acquisition (including any insurance
company using funds in its general or separate accounts that may constitute
"plan assets"), unless otherwise directed by the Company, the Trustee shall
require an opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee, the Company and the Certificate Administrator to
the effect that the purchase or holding of such Certificate is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, and will not
subject the Trustee, the Company or the Certificate Administrator to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Agreement,
which Opinion of Counsel shall not be an expense of the Trustee, the Company or
the Certificate Administrator. Neither the Company, the Certificate
Administrator nor the Trustee will be required to obtain such opinion of Counsel
on behalf of any prospective transferee.
(d) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under CLAUSE (iii) (A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under CLAUSE (iii) (B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a Permitted
Transferee and shall promptly notify the Trustee of any change
or impending change in its status as a Permitted Transferee.
(B) In connection with any proposed Transfer of any
Ownership Interest in a Class R Certificate, the Trustee shall
require delivery to it, and shall not register the Transfer of
any Class R Certificate until its receipt of, (I) an affidavit
and agreement (a "TRANSFER AFFIDAVIT AND AGREEMENT" attached
hereto as EXHIBIT B-1) from the proposed Transferee, in form
and substance satisfactory to the Trustee and the Certificate
Administrator, representing and warranting, among other
things, that it is a United States Person and Permitted
Transferee, that it is not acquiring its ownership Interest in
the Class R Certificate that is the subject of the proposed
transfer as a nominee, trustee or agent for any Person who is
not a Permitted Transferee, that for so long as it retains its
Ownership Interest in a Class R Certificate, it will endeavor
to remain a Permitted Transferee, and that it has reviewed the
provisions of this SECTION 5.02(d) and agrees to be bound by
them and (II) a certificate, attached hereto as EXHIBIT B-2,
from the Holder wishing to transfer the Class R Certificate,
in form and substance satisfactory to the Certificate
Administrator, representing and warranting, among other
things, that no purpose of the proposed Transfer is to impede
the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer
Affidavit and Agreement by a proposed Transferee under CLAUSE
(B) above, if the Trustee has actual knowledge that the
proposed Transferee is not a Permitted Transferee, no transfer
of an ownership Interest in a Class R Certificate to such
proposed Transferee shall be effected.
(D) Each Person holding or acquiring any ownership
Interest in a Class R Certificate shall agree (1) to require a
Transfer Affidavit and Agreement from any other Person to whom
such Person attempts to transfer its Ownership Interest in a
Class R Certificate and (2) not to transfer its Ownership
Interest unless it provides a certificate to the Trustee and
the Certificate Administrator in the form attached hereto as
EXHIBIT B-2.
(E) Each Person holding or acquiring an Ownership
Interest in a Class R Certificate, by purchasing an ownership
Interest in such Certificate, agrees to give the Trustee
written notice that it is a "pass-through interest holder"
within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership
Interest in a Class R Certificate, if it is, or is holding an
Ownership Interest in a Class R Certificate on behalf of,
"pass-through interest holder."
(F) Each Person holding or acquiring any Ownership
Interest in a Class R Certificate shall be a "qualified
institutional buyer" as defined in Rule 144A under the
Securities Act of 1933, as amended, or an Affiliate of the
Company or the Certificate Administrator.
(ii) The Trustee will register the transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and
Agreement, a Certificate of the Holder requesting such transfer in the
form attached hereto as EXHIBIT B-2 and all of such other documents as
shall have been reasonably required by the Certificate Administrator as
a condition to such registration. Transfers of the Class R Certificates
to Non-United States Persons and "Disqualified Organizations" (as
defined in Section 860E(e)(5) of the Code) are prohibited.
(iii) (A) If any Disqualified Organization shall become a
holder of a Class R Certificate, then the last preceding Permitted
Transferee shall be restored, to the extent permitted by law, to all
rights as Holder thereof retroactive to the date of registration of
such transfer of such Class R Certificate. If a Non-United States
Person shall become a holder of a Class R Certificate, then the last
preceding United States Person shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such transfer of such Class
R Certificate. If a transfer of a Class R Certificate is disregarded
pursuant to the provisions of Treasury Regulation Sections 1.860E-1 or
1.860G-3, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such
transfer of such Class R Certificate. The Trustee shall be under no
liability to any Person for any registration of transfer of a Class R
Certificate that is in fact not permitted by this SECTION 5.02(d) or
for making any payments due on such Certificate to the holder thereof
or for taking any other action with respect to such holder under the
provisions of this Agreement.
(B) If any purported Transferee shall become a Holder
of a Class R Certificate in violation of the restrictions in
this SECTION 5.02(d) and to the extent that the retroactive
restoration of the rights of the Holder of such Class R
Certificate as described in CLAUSE (iii) (A) above shall be
invalid, illegal or unenforceable, then the Certificate
Administrator shall have the right, without notice to the
Holder or any prior Holder of such Class R Certificate, to
sell such Class R Certificate to a purchaser selected by the
Certificate Administrator on such terms as the Certificate
Administrator may choose. Such purported Transferee shall
promptly endorse and deliver each Class R Certificate in
accordance with the instructions of the Certificate
Administrator. Such purchaser may be the Company, the
Certificate Administrator itself or any affiliate of the
Company or the Certificate Administrator. The proceeds of such
sale, net of the commissions (which may include commissions
payable to the Certificate Administrator or its affiliates),
expenses and taxes due, if any, will be remitted by the
Certificate Administrator to such purported Transferee. The
terms and conditions of any sale under this CLAUSE (iii) (B)
shall be determined in the sole discretion of the Certificate
Administrator, and the Certificate Administrator shall not be
liable to any Person having an ownership Interest in a Class R
Certificate as a result of its exercise of such discretion.
(iv) The Certificate Administrator, on behalf of the Trustee,
shall make available, upon written request from the Trustee, all
information necessary to compute any tax imposed (A) as a result of the
transfer of an Ownership Interest in a Class R Certificate to any
Person who is not a Permitted Transferee, including the information
regarding "excess inclusions" of such Class R Certificates required to
be provided to the Internal Revenue Service and certain Persons as
described in Treasury Regulation Section 1.860D-l(b)(5), and (B) as a
result of any regulated investment company, real estate investment
trust, common trust fund, partnership, trust, estate or organizations
described in Section 1381 of the Code having as among its record
holders at any time any Person who is not a Permitted Transferee.
Reasonable compensation for providing such information may be required
by the Certificate Administrator from such person.
(v) The provisions of this SECTION 5.02(D) set forth prior to
this SUBSECTION (V) may be modified, added or eliminated, provided that
there shall have been delivered to the Trustee:
(A) written notification from the Rating Agency to
the effect that the modification, addition or elimination of
such provisions will not cause such Rating Agency to downgrade
its then-current ratings of the Certificates below the lower
of the then-current rating or the rating assigned to such
Certificates on the Closing Date by such Rating Agency; and
(B) a certificate of the Certificate Administrator
stating that the Certificate Administrator has received an
Opinion of Counsel, in form and substance satisfactory to the
Certificate Administrator, to the effect that such
modification, addition or absence of such provisions will not
cause the Trust Fund to cease to qualify as a REMIC and will
not cause (1) the Trust Fund to be subject to an entity-level
tax caused by the transfer of any Class R Certificate to a
Person that is not a Permitted Transferee or (2) a
Certificateholder or another Person to be subject to a
REMIC-related tax caused by the transfer of a Class R
Certificate to a Person that is not a Permitted Transferee.
(e) No service charge shall be made for any transfer or
exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
(f) All Certificates surrendered for transfer and exchange
shall be destroyed by the Certificate Registrar.
SECTION 5.03 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (i)
any mutilated Certificate is surrendered to the Certificate Registrar, or the
Trustee and the Certificate Registrar receive evidence to their satisfaction of
the destruction, loss or theft of any Certificate, and (ii) there is delivered
to the Trustee and the Certificate Registrar such security or indemnity as may
be required by them to save each of them harmless, then, in the absence of
notice to the Trustee or the Certificate Registrar that such Certificate has
been acquired by a bona fide purchaser, the Trustee shall execute and the
Certificate Registrar shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class and Percentage Interest but bearing a number not contemporaneously
outstanding. Upon the issuance of any new Certificate under this Section, the
Trustee may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee and the Certificate
Registrar) connected therewith. Any duplicate Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
SECTION 5.04 PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Company, the Certificate
Administrator, the Trustee, the Certificate Registrar and any agent of the
Company, the Certificate Administrator, the Trustee or the Certificate Registrar
may treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions pursuant to SECTION
4.01 and for all other purposes whatsoever, and neither the Company, the
Certificate Administrator, the Trustee, the Certificate Registrar nor any agent
of the Company, the Certificate Administrator, the Trustee or the Certificate
Registrar shall be affected by notice to the contrary except as provided in
SECTION 5.02(D).
SECTION 5.05 APPOINTMENT OF PAYING AGENT. The Trustee may appoint a
Paying Agent for the purpose of making distributions to Certificateholders
pursuant to SECTION 4.01. In the event of any such appointment, on or prior to
each Distribution Date the Trustee shall deposit or cause to be deposited with
the Paying Agent a sum sufficient to make the payments to Certificateholders in
the amounts and in the manner provided for in SECTION 4.01, such sum to be held
in trust for the benefit of Certificateholders.
The Trustee shall cause each Paying Agent to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
that such Paying Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. Any sums so
held by such Paying Agent shall be held only in Eligible Accounts to the extent
such sums are not distributed to the Certificateholders on the date of receipt
by such Paying Agent.
ARTICLE VI
THE COMPANY AND THE CERTIFICATE ADMINISTRATOR
SECTION 6.01 RESPECTIVE LIABILITIES OF THE COMPANY AND THE CERTIFICATE
ADMINISTRATOR. The Company and the Certificate Administrator shall be liable in
accordance herewith only to the extent of the respective obligations
specifically imposed upon and undertaken by the Company and the Certificate
Administrator herein.
SECTION 6.02 MERGER, CONSOLIDATION OR CONVERSION OF THE COMPANY OR THE
CERTIFICATE ADMINISTRATOR. Subject to the following paragraph, the Company and
the Certificate Administrator will each keep in full effect its existence,
rights and franchises as a corporation or association under the laws of the
jurisdiction of its incorporation, and each will obtain and preserve its
qualification to do business as a foreign corporation in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Agreement and the Certificates and to perform its
respective duties under this Agreement.
The Company or the Certificate Administrator may be merged or
consolidated with or into any Person, or transfer all or substantially all of
its assets to any Person, in which case any Person resulting from any merger or
consolidation to which the Company or the Certificate Administrator shall be a
party, or any Person succeeding to the business of the Company or the
Certificate Administrator, shall be the successor of the Company or the
Certificate Administrator, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; PROVIDED, that no Event
of Default shall result therefrom and such successor shall meet the
qualifications set forth in SECTION 7.02.
SECTION 6.03 LIMITATION ON LIABILITY OF THE COMPANY, THE CERTIFICATE
ADMINISTRATOR AND OTHERS. Neither the Company, the Certificate Administrator nor
any of the directors, officers, employees or agents of the Company or the
Certificate Administrator shall be under any liability to the Trust Fund or the
Certificateholders for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, or for errors in judgment;
PROVIDED, HOWEVER, that this provision shall not protect the Company, the
Certificate Administrator or any such Person against any breach of warranties or
representations made herein, or against any specific liability imposed on the
Certificate Administrator pursuant to any Section hereof, or against any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations or duties hereunder. The Company, the Certificate
Administrator and any director, officer, employee or agent of the Company or the
Certificate Administrator may rely in good faith on any document of any kind
which, prima facie, is properly executed and submitted by any Person respecting
any matters arising hereunder. The Company, the Certificate Administrator and
any director, officer, employee or agent of the Company or the Certificate
Administrator shall be indemnified and held harmless by the Trust Fund against
any loss, liability or expense incurred in connection with any legal action
relating to this Agreement or the Certificates, other than any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard of
obligations or duties hereunder. Neither the Company nor the Certificate
Administrator shall be under any obligation to appear in, prosecute or defend
any legal action unless such action is related to its respective duties under
this Agreement and which in its opinion does not involve it in any expense or
liability; PROVIDED, HOWEVER, that the Company may in its discretion undertake
any such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, and provided that such action
has been consented to by the Holders of Certificates evidencing at least 51% of
the Voting Rights, the legal expenses and costs of such action and any liability
resulting therefrom shall be expenses, costs and liabilities of the Trust Fund,
and the Company shall be entitled to be reimbursed therefor from the Certificate
Account as provided in SECTION 3.04. In no event shall the Certificate
Administrator be liable (solely in its capacity as Certificate Administrator)
for any error arising out of any inaccurate information contained in any
Distribution Date Statement. This provision shall not limit the Certificate
Administrator's liability in any other capacity.
SECTION 6.04 COMPANY AND CERTIFICATE ADMINISTRATOR NOT TO RESIGN. The
Certificate Administrator shall not resign from the obligations and duties
hereby imposed on it, except upon determination that its duties hereunder are no
longer permissible under applicable law or are in material conflict by reason of
applicable law with any other activities carried on by it, the other activities
of the Certificate Administrator so causing such a conflict being of a type and
nature carried on by the Certificate Administrator at the date of this
Agreement. Any such determination permitting the resignation of the Certificate
Administrator shall be evidenced by an Opinion of Counsel to such effect which
shall be delivered in form and substance satisfactory to the Trustee. No such
resignation shall become effective until the Trustee or a successor certificate
administrator shall have assumed the Certificate Administrator's
responsibilities and obligations in accordance with SECTION 7.02 hereof.
ARTICLE VII
DEFAULT
SECTION 7.01 EVENTS OF DEFAULT. "EVENT OF DEFAULT", wherever used
herein, means any one of the following events (whatever reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the Certificate Administrator shall fail to observe or
perform in any material respect any of the covenants or agreements on
the part of the Certificate Administrator contained in the Certificates
or in this Agreement and such failure shall continue unremedied for a
period of 30 days after the date on which written notice of such
failure, requiring the same to be remedied, shall have been given to
the Certificate Administrator by the Trustee or the Company, or to the
Certificate Administrator, the Company and the Trustee by the Holders
of Certificates evidencing Percentage Interests aggregating not less
than 33%; or
(ii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or appointing a conservator or receiver or liquidator in
any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the
Certificate Administrator and such decree or order shall have remained
in force undischarged or unstayed for a period of 60 days; or
(iii) the Certificate Administrator shall consent to the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings of, or relating to, the Certificate
Administrator or of, or relating to, all or substantially all of the
property of the Certificate Administrator; or
(iv) the Certificate Administrator shall admit in writing its
inability to pay its debts generally as they become due, file a
petition to take advantage of, or commence a voluntary case under, any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations.
If an Event of Default described in this Section shall occur, then, and
in each and every such case, so long as such Event of Default shall not have
been remedied, either the Company or the Trustee may, and at the direction of
Holders of Certificates evidencing at least 51% of the Voting Rights, the
Trustee shall, by notice in writing to the Certificate Administrator (and to the
Company if given by the Trustee or to the Trustee if given by the Company),
terminate all of the rights and obligations of the Certificate Administrator
under this Agreement and in and to the Underlying Agency Securities and the
proceeds thereof, other than its rights as a Certificateholder hereunder;
PROVIDED, HOWEVER, that the Certificate Administrator will be entitled to all
compensation and any income on the Certificate Account that accrued to the
Certificate Administrator prior to such termination. The Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Certificate
Administrator, as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement or assignment of the Underlying Agency
Securities and related documents, or otherwise. The Certificate Administrator
agrees to cooperate with the Trustee in effecting the termination of the
Certificate Administrator's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee or its designee for
administration by it of all cash amounts which shall at the time be credited to
the Certificate Account or thereafter be received with respect to the Underlying
Agency Securities. No such termination shall release the Certificate
Administrator for any liability that it would otherwise have hereunder for any
act or omission prior to the effective time of such termination.
SECTION 7.02 TRUSTEE OR COMPANY TO ACT; APPOINTMENT OF SUCCESSOR. On
and after the time the Certificate Administrator receives a notice of
termination pursuant to SECTION 7.01, the Trustee or, upon notice to the
Company, and with the Company's consent (which shall not be unreasonably
withheld) a designee (which meets the standards set forth below) of the Trustee,
shall be the successor in all respects to the Certificate Administrator in its
capacity as Certificate Administrator under this Agreement and the transactions
set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the
Certificate Administrator (except for its obligations to deposit amounts in
respect of losses incurred prior to such notice of termination on the investment
of funds in the Certificate Account pursuant to SECTION 4.04 by the terms and
provisions hereof) ; PROVIDED, HOWEVER, that any failure to perform such duties
or responsibilities caused by the preceding Certificate Administrator's failure
to provide information required by SECTION 4.01 shall not be considered a
default by the Trustee hereunder. As compensation therefor, the Trustee shall be
entitled to all funds relating to the Underlying Agency Securities which the
Certificate Administrator would have been entitled to charge to the Certificate
Account if the Certificate Administrator had continued to act hereunder and, in
addition, shall be entitled to the income from any Permitted Investments made
with amounts attributable to the Underlying Agency Securities held in the
Certificate Account. If the Trustee has become the successor to the Certificate
Administrator in accordance with SECTION 7.01, then notwithstanding the above,
the Trustee may, if it shall be unwilling to so act, or shall, if it is unable
to so act, appoint, or petition a court of competent jurisdiction to appoint,
any established housing and home finance institution, which is also a FNMA- or
FHLMC-approved mortgage servicing institution, having a net worth of not less
than $10,000,000 as the successor to the Certificate Administrator hereunder in
the assumption of all or any part of the responsibilities, duties or liabilities
of the Certificate Administrator hereunder. Pending appointment of a successor
to the Certificate Administrator hereunder, the Trustee shall become successor
to the Certificate Administrator and shall act in such capacity as hereinabove
provided. In connection with such appointment and assumption, the Trustee may
make such arrangements for the compensation of such successor out of payments on
Underlying Agency Securities as it and such successor shall agree; PROVIDED,
HOWEVER, that no such compensation shall be in excess of that permitted the
initial Certificate Administrator hereunder. The Company, the Trustee, the
Certificate Administrator, the Custodian and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
SECTION 7.03 NOTIFICATION TO CERTIFICATEHOLDERS. (a) Upon any such
termination or appointment of a successor to the Certificate Administrator, the
Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
SECTION 7.04 WAIVER OF EVENTS OF DEFAULT. The Holders representing at
least 66% of the Voting Rights of Certificates may waive such default or Event
of Default; PROVIDED, HOWEVER, that no waiver pursuant to this SECTION 7.04
shall affect the Holders of Certificates in the manner set forth in SECTION
10.01. Upon any such waiver of a default or Event of Default, such default or
Event of Default by the Holders representing the requisite percentage of Voting
Rights of Certificates affected by such default or Event of Default, shall cease
to exist and shall be deemed to have been remedied for every purpose hereunder.
No such waiver shall extend to any subsequent or other default or Event of
Default or impair any right consequent thereon except to the extent expressly so
waived.
ARTICLE VIII
THE TRUSTEE
SECTION 8.01 DUTIES OF TRUSTEE. (a) The Trustee, prior to the
occurrence of an Event of Default and after the curing of all Events of Default
which may have occurred, undertakes to perform such duties and only such duties
as are specifically set forth in this Agreement. In case an Event of Default has
occurred (which has not been cured or waived), the Trustee shall exercise such
of the rights and powers vested in it by this Agreement, and use the same degree
of care and skill in their exercise as a prudent investor would exercise or use
under the circumstances in the conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement and the terms of the Underlying
Agency Securities. The Trustee shall notify the Certificateholders of any such
documents which do not materially conform to the requirements of this Agreement
in the event that the Trustee, after so requesting, does not receive
satisfactorily corrected documents or a satisfactory explanation regarding any
such nonconformities.
The Trustee shall forward or cause to be forwarded in a timely fashion
the notices, reports and statements required to be forwarded by the Trustee
pursuant to Sections 3.01, 4.02 and 9.01. The Trustee shall furnish in a timely
fashion to the Certificate Administrator such information as the Certificate
Administrator may reasonably request from time to time for the Certificate
Administrator to fulfill its duties as set forth in this Agreement. The Trustee
covenants and agrees that it shall perform its obligations hereunder in a manner
so as to maintain the status of the Trust Fund as a REMIC, under the REMIC
Provisions and to prevent the imposition of any federal, state or local income,
prohibited transaction, contribution or other tax on the Trust Fund to the
extent that maintaining such status and avoiding such taxes are reasonably
within the control of the Trustee and are reasonably within the scope of its
duties under this Agreement, notwithstanding the foregoing. Also, the Trustee
shall have no additional obligations with respect to maintenance of the Trust
Fund as a REMIC other than as specifically set forth herein.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; PROVIDED, HOWEVER, that:
(i) Prior to the occurrence of an Event of Default, and after
the curing or waiver of all such Events of Default which may have
occurred, the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall
not be liable except for the performance of such duties and obligations
as are specifically set forth in this Agreement, no implied covenants
or obligations shall be read into this Agreement against the Trustee
and, in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any
certificates or opinions furnished by the Company or the Certificate
Administrator to the Trustee and which on their face, do not contradict
the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good
faith in accordance with the direction of the Certificateholders of any
Class holding Certificates which evidence, as to such Class, Percentage
Interests aggregating not less than 25% as to the time, method and
place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee,
under this Agreement;
(iv) The Trustee shall not be charged with knowledge of any
default or an Event of Default under CLAUSES (i), (ii), (iii) or (iv)
of Section 7.01 unless a Responsible Officer of the Trustee assigned to
and working in the Corporate Trust Office obtains actual knowledge of
such failure or event or the Trustee receives written notice of such
failure or event at its Corporate Trust Office from the Certificate
Administrator, the Company, or any Certificateholder; and
(v) Except to the extent provided in SECTION 7.02, no
provision in this Agreement shall require the Trustee to expend or risk
its own funds or otherwise incur any personal financial liability in
the performance of any of its duties as Trustee hereunder, or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that repayment of funds or adequate
indemnity against such risk or liability is not reasonably assured to
it. In the event the Trustee has been authorized by Certificateholders
evidencing the percentage of Percentage Interests required to authorize
such action pursuant to the terms of this Agreement and the
indemnification provided to the Trustee by such Certificateholders is
not reasonably satisfactory to the Trustee, the Trustee may require the
approval of all Certificateholders and/or additional indemnification
prior to taking any such action. In addition, the Trustee may seek
indemnification from the Certificate Administrator or the Company prior
to taking any such action provided that neither the Certificate
Administrator nor the Company shall be required to provide such
indemnification.
(d) The Trustee shall timely pay, from its own funds, the amount of any
and all federal, state and local taxes imposed on the Trust Fund or its assets
or transactions including, without limitation, (i) "prohibited transaction"
penalty taxes as defined in Section 860F of the Code, if, when and as the same
shall be due and payable, and (ii) any tax on contributions to the Trust Fund
after the Closing Date imposed by Section 860G(d) of the Code, but only if such
taxes arise out of a breach by the Trustee of its obligations hereunder which
breach constitutes negligence or willful misconduct of the Trustee.
SECTION 8.02 CERTAIN MATTERS AFFECTING THE TRUSTEE. (a) Except as
otherwise provided in SECTION 8.01:
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
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 party or parties;
(ii) the Trustee may consult with counsel and any opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of any of the Certificateholders, pursuant
to the provisions of this Agreement, unless such Certificateholders
shall have offered to the 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 Trustee of the obligation, upon the occurrence of an Event of
Default (which has not been cured), to exercise such of the rights and
powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent investor would exercise
or use under the circumstances in the conduct of such investor's own
affairs;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Agreement;
(v) prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default which may have occurred,
the 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 so to do
by Holders of Certificates evidencing Percentage Interests, aggregating
not less than 50%; PROVIDED, however, that if the payment within a
reasonable time to the 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 Trustee, not reasonably assured to the Trustee by
the security afforded to it by the terms of this Agreement, the Trustee
may require reasonable indemnity against such expense or liability as a
condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Certificate Administrator, if an Event
of Default shall have occurred and is continuing, and otherwise by the
Certificateholder requesting the investigation;
(vi) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys; and
(vii) to the extent authorized or required from time to time
under the Code and the regulations promulgated thereunder, each Holder
of a Class R Certificate hereby irrevocably appoints and authorizes the
Trustee to be its attorney-in-fact for purposes of signing any Tax
Returns required to be filed on behalf of the Trust Fund. The Trustee
shall sign on behalf of the Trust Fund and deliver to the Certificate
Administrator in a timely manner any Tax Returns prepared by or on
behalf of the Certificate Administrator that the Trustee is required to
sign as determined by the Certificate Administrator pursuant to
applicable federal, state or local tax laws, provided that the
Certificate Administrator shall indemnify the Trustee for signing any
such Tax Returns that contain errors or omissions.
(b) Following the issuance of the Certificates, the Trustee shall not
accept any contribution of assets to the Trust Fund unless it shall have
obtained or been furnished with an Opinion of Counsel to the effect that such
contribution will not (i) cause the REMIC to fail to qualify as a REMIC at any
time that any Certificates are outstanding or (ii) cause the Trust Fund to be
subject to any tax as a result of such contribution (including the imposition of
any tax on "prohibited transactions" of the Trust Fund imposed under Section
860F(a) of the Code).
SECTION 8.03 TRUSTEE NOT LIABLE FOR CERTIFICATES OR UNDERLYING AGENCY
SECURITIES. The recitals contained herein and in the Certificates (other than
the execution of the Certificates and relating to the acceptance and receipt of
the Underlying Agency Securities) shall be taken as the statements of the
Company or the Certificate Administrator, as the case may be, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Agreement or of the
Certificates (except that the Certificates shall be duly and validly executed
and authenticated by it as Certificate Registrar) or of the Underlying Agency
Securities or any related document. Except as otherwise provided herein, the
Trustee shall not be accountable for the use or application by the Company or
the Certificate Administrator of any of the Certificates or of the proceeds of
such Certificates, or for the use or application of any funds paid to the
Company or the Certificate Administrator in respect of the Underlying Agency
Securities deposited in or withdrawn from the Certificate Account by the Company
or the Certificate Administrator.
SECTION 8.04 TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Trustee.
SECTION 8.05 CERTIFICATE ADMINISTRATOR TO PAY TRUSTEE'S FEES AND
EXPENSES; INDEMNIFICATION. (a) The Certificate Administrator covenants and
agrees to pay to the Trustee and any co-trustee from time to time, and the
Trustee and any co-trustee shall be entitled to, reasonable compensation (which
shall not be limited by any provision of law in regard to the compensation of a
trustee of an express trust) for all services rendered by each of them in the
execution of the trusts hereby created and in the exercise and performance of
any of the powers and duties hereunder of the Trustee and any co-trustee, and
the Certificate Administrator will pay or reimburse the Trustee and any
co-trustee upon request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee or any co-trustee in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all Persons not regularly in
its employ, and the expenses incurred by the Trustee or any co-trustee in
connection with the appointment of an office or agency pursuant to SECTION 8.11)
except any such expense, disbursement or advance as may arise from its
negligence or bad faith.
(b) The Certificate Administrator agrees to indemnify the Trustee for,
and to hold the Trustee harmless against, any loss, liability or expense
incurred without negligence or willful misconduct on its part, arising out of,
or in connection with, the acceptance and administration of the Trust Fund,
including the costs and expenses (including reasonable legal fees and expenses)
of defending itself against any claim in connection with the exercise or
performance of any of its powers or duties under this Agreement, provided that:
(i) with respect to any such claim, the Trustee shall have
given the Certificate Administrator written notice thereof promptly
after the Trustee shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the
Trustee shall cooperate and consult fully with the Certificate
Administrator in preparing such defense; and
(iii) notwithstanding anything in this Agreement to the
contrary, the Certificate Administrator shall not be liable for
settlement of any claim by the Trustee entered into without the prior
consent of the Certificate Administrator which consent shall not be
unreasonably withheld.
No termination of this Agreement shall affect the obligations created
by this SECTION 8.05(b) of the Certificate Administrator to indemnify the
Trustee under the conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the
Certificate Administrator in this SECTION 8.05(b) shall not pertain to any loss,
liability or expense of the Trustee, including the costs and expenses of
defending itself against any claim, incurred in connection with any actions
taken by the Trustee at the direction of Certificateholders pursuant to the
terms of this Agreement.
(c) Notwithstanding SECTION 8.05(b) above, the Certificate
Administrator shall not indemnify the Trustee for any loss, liability or
expense, including the costs and expenses of defending itself against any claim,
incurred in connection with the Trustee's establishment, maintenance or
management of the Certificate Account; PROVIDED, HOWEVER, that the foregoing
shall not limit the Certificate Administrator's obligation to made deposits into
the Certificate Account to cover losses incurred in respect of Permitted
Investments pursuant to SECTION 4.04.
SECTION 8.06 ELIGIBILITY REQUIREMENTS FOR TRUSTEE. The Trustee
hereunder shall at all times be a corporation or a national banking association
having its principal office in a state and city acceptable to the Company and
organized and doing business under the laws of such state or the United States
of America, authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by federal or state authority. If such corporation or
national banking association publishes reports of condition at least annually,
pursuant to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in SECTION 8.07.
SECTION 8.07 RESIGNATION AND REMOVAL OF THE TRUSTEE. (a) The Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Company. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Trustee and one copy each to the successor trustee. If no successor
trustee shall have been so appointed and have accepted appointment within 30
days after the giving of such notice of resignation, then the resigning Trustee
may petition any court of competent jurisdiction for the appointment of a
successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of SECTION 8.06 and shall fail to resign after written
request therefor by the Company, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Company may
remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee.
(c) The Holders of Certificates evidencing at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Company, one complete set to the Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
SECTION 8.08.
SECTION 8.08 SUCCESSOR TRUSTEE. (a) Any successor trustee appointed as
provided in SECTION 8.07 shall execute, acknowledge and deliver to the Company
and to its predecessor trustee an instrument accepting such appointment
hereunder, and thereupon the resignation or removal of the predecessor trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee herein. The predecessor trustee shall deliver to the successor
trustee all Underlying Agency Securities and related documents and statements
held by it hereunder, and the Company, the Certificate Administrator and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of SECTION 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Company shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Company fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Company.
SECTION 8.09 MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation or
national banking association into which the Trustee may be merged or converted
or with which it may be consolidated or any corporation or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation or national banking association
succeeding to all or substantially all of the corporation trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of SECTION 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee shall mail notice of any such merger or
consolidation to the Certificateholders at their address as shown in the
Certificate Register.
SECTION 8.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE. (a)
Notwithstanding any other provisions hereof, at any time, for the purpose of
meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the
Certificate Administrator and the Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, or any part thereof, and, subject to the other provisions of
this SECTION 8.10, such powers, duties, obligations, rights and trusts as the
Certificate Administrator and the Trustee may consider necessary or desirable.
If the Certificate Administrator shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, or in case an
Event of Default shall have occurred and be continuing, the Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under SECTION 8.06 hereunder and no notice to Holders of Certificates of
the appointment of co-trustee(s) or separate trustee(s) shall be required under
SECTION 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this SECTION 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee, and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Certificate Administrator hereunder), the 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 Fund or any portion thereof in any such jurisdiction) shall be exercised
and performed by such separate trustee or co-trustee at the direction of the
Trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this ARTICLE VIII. 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, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 8.11 APPOINTMENT OF OFFICE OR AGENCY. The Trustee will maintain
an office or agency in the City of New York where Certificates may be
surrendered for registration of transfer or exchange. The Trustee initially
designates [______], which is located at [_______] for the purpose of keeping
the Certificate Register. The Trustee will maintain an office at the address
stated in SECTION 11.05(c) hereof where notices and demands to or upon the
Trustee in respect of this Agreement may be served.
ARTICLE IX
TERMINATION
SECTION 9.01 TERMINATION. (a) Subject to SECTION 9.02, the respective
obligations and responsibilities of the Certificate Administrator, the Company
and the Trustee created hereby with respect to the Certificates (other than the
obligation to make certain payments and to send certain notices to
Certificateholders as hereinafter set forth) shall terminate immediately upon
payment to the Certificateholders of all amounts held by or on behalf of the
Trustee and required to be paid to them hereunder following the earlier to occur
of (i) the repurchase by the Certificate Administrator or the Company of all of
the Underlying Agency Securities and other assets remaining in the Trust Fund at
a price equal to 100% of the then outstanding Certificate Principal Balance of
each of the Class [A-1], Class [A-2], Class [A-3] and Class R Certificates on
the day of repurchase together with accrued interest thereon on such then
outstanding Certificate Principal Balance and on the Certificates and the Class
[S] Certificates at the then applicable Notional Amount at the related
Pass-Through Rate to the first day of the month in which the proceeds of such
repurchase are to be distributed, and (ii) the last action required to be taken
by the Trustee on the Termination Date pursuant to this ARTICLE IX following
receipt of the final distribution to be made on the last remaining Underlying
Agency Security in the Trust Fund upon presentation and surrender of such
Underlying Agency Security in accordance with the terms and conditions thereof;
PROVIDED, HOWEVER, that in no event shall the trust created hereby continue
beyond the expiration of twenty-one years from the death of the survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the United Kingdom, living on the date hereof.
The right of the Certificate Administrator or the Company to repurchase
all of the Underlying Agency Securities pursuant to (i) above shall be
conditioned upon the aggregate of the Underlying Certificate Balances of such
Underlying Agency Securities at the time of any such repurchase aggregating an
amount equal to or less than [_]% of the aggregate of the Underlying Certificate
Balances of the Underlying Agency Securities at the Closing Date.
(b) The Certificate Administrator shall give the Trustee and the Rating
Agency notice (a "NOTICE OF TERMINATION") as soon as practicable of the
Distribution Date on which the Certificate Administrator anticipates that the
final distribution will be made to the Certificateholders. Notice of any
termination of the Trust Fund pursuant to this SECTION 9.01 shall be mailed by
the Trustee to affected Certificateholders at their addresses shown in the
Certificate Register as soon as practicable after the Trustee shall have
received a Notice of Termination but in any event, not more than thirty days,
and not less than ten days, prior to the Anticipated Termination Date. The
notice mailed by the Trustee to affected Certificateholders shall:
(A) specify the Anticipated Termination Date on which
the final distribution is anticipated to be made to Holders of
the Certificates;
(B) specify the amount of any such final
distribution, if known; and
(C) state that the final distribution to
Certificateholders will be made only upon presentation and
surrender of Certificates at the office of the Trustee therein
specified.
If the Trust Fund is not terminated on the Anticipated Termination Date
for any reason, the Trustee shall promptly mail notice thereof to each affected
Certificateholder.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders on the Termination Date, the Trustee shall distribute to the
Certificateholders the amounts otherwise distributable on such Distribution Date
pursuant to SECTION 4.01(A). Any funds not distributed on the Termination Date
because of the failure of any Certificateholders to tender their Certificates
shall be set aside and held in trust for the account of the appropriate
non-tendering Certificateholders, whereupon the Trust Fund shall terminate. If
any Certificates as to which notice of the Termination Date has been given
pursuant to this SECTION 9.01 shall not have been surrendered for cancellation
within six months after the time specified in such notice, the Trustee shall
mail a second notice to the remaining Certificateholders, at their last
addresses shown in the Certificate Register, to surrender their Certificates for
cancellation in order to receive, from such funds held, the final distribution
with respect thereto. If within one year after the second notice any Certificate
shall not have been surrendered for cancellation, the Trustee shall so notify
the Certificate Administrator who shall upon receipt of such notice, directly or
through an agent, take reasonable steps to contact the remaining
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining such funds and of contacting Certificateholders shall be
paid out of the assets which remain held. If within two years after the second
notice any Certificates shall not have been surrendered for cancellation, the
Trustee shall pay to the Certificate Administrator all amounts distributable to
the Holders thereof and the Certificate Administrator shall thereafter hold such
amounts for the benefit of such Holders. No interest shall accrue or be payable
to any Certificateholder on any amount held as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this SECTION 9.01.
SECTION 9.02 ADDITIONAL TERMINATION REQUIREMENTS. (a) The Trust Fund
shall be terminated in accordance with the following additional requirements,
unless the Trustee and the Certificate Administrator have received an Opinion of
Counsel to the effect that the failure of the Trust Fund to comply with the
requirements of this SECTION 9.02 will not (i) result in the imposition on the
Trust Fund of taxes on "prohibited transactions", as described in Section 860F
of the Code, or (ii) cause the Trust Fund to fail to qualify as a REMIC at any
time that any Certificate is outstanding.
(i) The Certificate Administrator shall establish a 90-day
liquidation period for the Trust Fund and specify the first day of such
period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury regulations Section 1.860F-1. The Certificate
Administrator also shall satisfy all of the requirements of a qualified
liquidation for the Trust Fund under Section 860F of the Code and the
regulations thereunder;
(ii) The Certificate Administrator shall notify the Trustee at
the commencement of such 90-day liquidation period and, at or prior to
the time of making of the final payment on the Certificates, the
Trustee shall sell or otherwise dispose of all of the remaining assets
of the Trust Fund in accordance with the terms hereof; and
(iii) After making the final payment on the Certificates, the
Certificate Administrator shall distribute or credit, or cause to be
distributed or credited, to the Holders of the Class R Certificates all
cash remaining in the Certificate Account (other than cash retained to
meet claims), and the Trust Fund shall terminate at that time.
(b) Each Holder of a Certificate hereby irrevocably approves and
appoints the Certificate Administrator as its attorney-in-fact for the purposes
of adoption of the plan of complete liquidation and obtaining the signature of
the Trustee in accordance with the terms and conditions of this Agreement.
ARTICLE X
REMIC PROVISIONS
SECTION 10.01 REMIC ADMINISTRATION. (a) The Certificate Administrator
shall make an election to treat the Trust Fund as a REMIC under the Code and, if
necessary, under applicable state law. Such election will be made on Form 1066
or other appropriate federal tax or information return (including Form 8811) or
any appropriate state return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. For the purposes of the
REMIC election in respect of the Trust Fund, the Certificates (other than the
Class R Certificates) shall be designated as the "regular interests" and the
Class R Certificates shall be designated as the sole class of "residual
interest" in the Trust Fund. The Certificate Administrator and the Trustee shall
not permit the creation of any "interests" (within the meaning of Section 860G
of the Code) in the Trust Fund other than the Trust Fund regular interests and
the interests represented by the Certificates, respectively.
(b) The Closing Date is hereby designated as the "Startup Day" of the
Trust Fund within the meaning of Section 860G(a)(9) of the Code.
(c) [[The Certificate Administrator] shall hold a Class R Certificate
representing a 0.01% Percentage Interest of all Class R Certificates and shall
be designated as the tax matters person of the Trust Fund in the manner provided
under Treasury regulations section 1.860F-4(d) and temporary Treasury
regulations section 301.6231(a)(7)-1T.] [the Certificate Administrator] as tax
matters person, shall (i) act on behalf of the Trust Fund in relation to any tax
matter or controversy involving the Trust Fund and (ii) represent the Trust Fund
in any administrative or judicial proceeding relating to an examination or audit
by any governmental taxing authority with respect thereto. The legal expenses,
including without limitation attorneys' or accountants' fees, and costs of any
such proceeding and any liability resulting therefrom shall be expenses of the
Trust Fund and [the Certificate Administrator] shall be entitled to
reimbursement therefor out of amounts attributable to the Mortgage Loans on
deposit in the Certificate Account as provided by SECTION 3.04 unless such legal
expenses and costs are incurred by reason of [the Certificate Administrator's]
willful misfeasance, bad faith or gross negligence. If [the Certificate
Administrator] is no longer the Certificate Administrator hereunder [the
Certificate Administrator] shall be paid reasonable compensation by any
successor Certificate Administrator hereto for so acting as "tax matters
person."]
(d) The Certificate Administrator shall prepare or cause to be prepared
all of the Tax Returns that it determines are required with respect to the Trust
Fund created hereunder and deliver such Tax Returns in a timely manner to the
Trustee and the Trustee shall sign and file such Tax Returns in a timely manner.
The expenses of preparing such returns shall be. borne by the Certificate
Administrator without any right of reimbursement therefor. The Certificate
Administrator agrees to indemnify and hold harmless the Trustee with respect to
any tax or liability arising from the Trustee's signing of Tax Returns that
contain errors or omissions.
(e) The Certificate Administrator shall provide (i) to any transferor
of a Class R Certificate such information as is necessary for the application of
any tax relating to the transfer of a Class R Certificate to any Person who is
not a Permitted Transferee, (ii) to the Trustee and the Trustee shall forward to
the Certificateholders such information or reports as are required by the Code
or the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption) and
(iii) to the Internal Revenue Service the name, title, address and telephone
number of the person who will serve as the representative of the Trust Fund.
(f) The Certificate Administrator shall take such actions and shall
cause the Trust Fund created hereunder to take such actions as are reasonably
within the Certificate Administrator's control and the scope of its duties more
specifically set forth herein as shall be necessary to maintain the status
thereof as a REMIC under the REMIC Provisions (and the Trustee shall assist the
Certificate Administrator, to the extent reasonably requested by the Certificate
Administrator to do so). The Certificate Administrator shall not knowingly or
intentionally take any action, cause the Trust Fund to take any action or fail
to take (or fail to cause to be taken) any action reasonably within its control
and the scope of duties more specifically set forth herein, that, under the
REMIC Provisions, if taken or not taken, as the case may be, could (i) endanger
the status of the Trust Fund as a REMIC or (ii) result in the imposition of a
tax upon the Trust Fund (including but not limited to the tax on prohibited
transactions as defined in Section 860F(a)(2) of the Code and the tax on
contributions to a REMIC set forth in Section 860G(d) of the Code) (either such
event, an "ADVERSE REMIC EVENT") unless the Certificate Administrator has
received an opinion of Counsel (at the expense of the party seeking to take such
action or, if such party fails to pay such expense, and the Certificate
Administrator determines that taking such action is in the best interest of the
Trust Fund and the Certificateholders, at the expense of the Trust Fund, but in
no event at the expense of the Certificate Administrator or the Trustee) to the
effect that the contemplated action will not, with respect to the Trust Fund
created hereunder, endanger such status or, unless the Certificate Administrator
determines in its sole discretion to indemnify the Trust Fund against such tax,
result in the imposition of such a tax. The Trustee shall not take or fail to
take any action (whether or not authorized hereunder) as to which the
Certificate Administrator has advised it in writing that it has received an
Opinion of Counsel to the effect that an Adverse REMIC Event could occur with
respect to such action. In addition, prior to taking any action with respect to
the Trust Fund or its assets, or causing the Trust Fund to take any action,
which is not expressly permitted under the terms of this Agreement, the Trustee
will consult with the Certificate Administrator or its designee, in writing,
with respect to whether such action could cause an Adverse REMIC Event to occur
with respect to the Trust Fund, and the Trustee shall not take any such action
or cause the Trust Fund to take any such action as to which the Certificate
Administrator has advised it in writing that an Adverse REMIC Event could occur.
The Certificate Administrator may consult with counsel to make such written
advice, and the cost of same shall be borne by the party seeking to take the
action not expressly permitted by this Agreement, but in no event at the expense
of the Certificate Administrator. At all times as may be required by the Code,
the Certificate Administrator will, to the extent within its control and the
scope of its duties more specifically set forth herein, maintain substantially
all of the assets of the Trust Fund as "qualified mortgages" as defined in
Section 860G(a)(3) of the Code and "permitted investments" as defined in Section
860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions"
of the Trust Fund created hereunder as defined in Section 860F(a)(2) of the
Code, on "net income from foreclosure property" of the Trust Fund as defined in
Section 860G(c) of the Code, on any contributions to the Trust Fund after the
Startup Day therefor pursuant to Section 860G(d) of the Code, or any other tax
is imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Certificate Administrator, if such tax
arises out of or results from a breach by the Certificate Administrator of any
of its obligations under this Agreement or the Certificate Administrator has in
its sole discretion determined to indemnify the Trust Fund against such tax;
(ii) to the Trustee, if such tax arises out of or results from a breach by the
Trustee of any of its obligations under this Agreement; or otherwise (iii)
against amounts on deposit in the Certificate Account as provided by SECTION
3.04 and on the Distribution Date(s) following such reimbursement the aggregate
of such taxes shall be allocated in reduction of the Accrued Certificate
Interest on each Class entitled thereto in the same manner as if such taxes
constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Certificate Administrator shall, for federal
income tax purposes, maintain books and records with respect to the Trust Fund
on a calendar year and on an accrual basis or as otherwise may be required by
the REMIC Provisions.
(i) Following the Startup Day, neither the Certificate Administrator
nor the Trustee shall accept any contributions of assets to the Trust Fund
unless the Certificate Administrator and the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in the Trust Fund
will not cause the Trust Fund to fail to qualify as a REMIC at any time that any
Certificates are outstanding or subject the Trust Fund to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.
(j) Neither the Certificate Administrator nor the Trustee shall enter
into any arrangement by which the Trust Fund will receive a fee or other
compensation for services nor permit either such REMIC to receive any income
from assets other than "qualified mortgages" as defined in Section 860G(a)(3) of
the Code or "permitted investments" as defined in Section 860G(a)(5) of the
Code.
(k) Solely for the purposes of Section 1.860G1(a)(4)(iii) of the
Treasury regulations, the "latest possible maturity date" by which the
Certificate Principal Balance of each Class of Certificates representing a
regular interest in the Trust Fund would be reduced to zero is [________ __,
20_] which is the Distribution Date immediately following the latest scheduled
maturity of any Mortgage Loan.
(l) Within 30 days after the Closing Date, the Certificate
Administrator shall prepare and file with the Internal Revenue Service Form
8811, "Information Return for Real Estate Mortgage Investment Conduits (REMIC)
and Issuers of Collateralized Debt Obligations" for the Trust Fund.
(m) Neither the Trustee nor the Certificate Administrator shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the default, imminent default or foreclosure of a Mortgage Loan,
including but not limited to, the acquisition or sale of a Mortgaged Property
acquired by deed in lieu of foreclosure, (ii) the bankruptcy of the Trust Fund,
(iii) the termination of the Trust Fund pursuant to ARTICLE IX of this Agreement
or (iv) a purchase of Mortgage Loans pursuant to ARTICLE II or III of this
Agreement) nor acquire any assets for the Trust Fund, nor sell or dispose of any
investments in the Custodial Account or the Certificate Account for gain, nor
accept any contributions to the Trust Fund after the Closing Date unless it has
received an Opinion of Counsel that such sale, disposition, substitution or
acquisition will not (a) affect adversely the status of the Trust Fund as a
REMIC or (b) unless the Certificate Administrator has determined in its sole
discretion to indemnify the Trust Fund against such tax, cause the Trust Fund to
be subject to a tax on "prohibited transactions" or "contributions" pursuant to
the REMIC Provisions.
SECTION 10.02 CERTIFICATE ADMINISTRATOR AND TRUSTEE INDEMNIFICATION.
(a) The Trustee agrees to indemnify the Trust Fund, the Company and the
Certificate Administrator for any taxes and costs including, without limitation,
any reasonable attorneys fees imposed on or incurred by the Trust Fund, the
Company or the Certificate Administrator, as a result of a breach of the
Trustee's covenants set forth in ARTICLE VIII or this ARTICLE X.
(b) The Certificate Administrator agrees to indemnify the Trust Fund,
the Company and the Trustee for any taxes and costs (including, without
limitation, any reasonable attorneys' fees) imposed on or incurred by the Trust
Fund, the Company or the Trustee, as a result of a breach of the Certificate
Administrator's covenants set forth in this ARTICLE X or in ARTICLE III with
respect to compliance with the REMIC Provisions, including without limitation,
any penalties arising from the Trustee's execution of Tax Returns prepared by
the Certificate Administrator that contain errors or omissions.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.01 AMENDMENT. (a) his Agreement may be amended from time to
time by the Company, the Certificate Administrator and the Trustee, without the
consent of any of the Certificateholders:
(i) to cure any ambiguity;
(ii) to correct or supplement any provisions herein or
therein, which may be inconsistent with any other provisions herein;
(iii) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary to maintain the qualification of the
Trust Fund as a REMIC at all times that any Certificate is outstanding
or to avoid or minimize the risk of the imposition of any tax on the
Trust Fund pursuant to the Code that would be a claim against the Trust
Fund, provided that the Trustee has received an Opinion of Counsel to
the effect that (A) such action is necessary or desirable to maintain
such qualification or to avoid or minimize the risk of the imposition
of any such tax and (B) such action will not adversely affect in any
material respect the interests of any Certificateholder;
(iv) to change the timing and/or nature of deposits into the
Certificate Account, provided that (A) such change shall not, as
evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Certificateholder and (B) such change
shall not adversely affect the then-current rating of the Certificates,
as evidenced by a letter from the Rating Agency then rating the
Certificates to such effect;
(v) to modify, eliminate or add to the provisions of SECTION
5.02(D) or any other provision hereof restricting transfer of the Class
R Certificates by virtue of their being the REMIC "residual interest",
provided that (A) such change shall not adversely affect the
then-current ratings of the Certificates, as evidenced by a letter from
the Rating Agency to such effect, and (B) such change shall not, as
evidenced by an Opinion of Counsel, cause either the Trust Fund or any
of the Certificateholders (other than the transferor) to be subject to
a tax caused by a transfer to a non-Permitted Transferee; and
(vi) to make any other provisions with respect to matters or
questions arising under this Agreement which shall not be materially
inconsistent with the provisions of this Agreement, provided that such
action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder.
(b) This Agreement may also be amended from time to time by the
Company, the Certificate Administrator and the Trustee with the consent of the
Holders of Certificates evidencing in the aggregate not less than 66% of the
Percentage Interests of each Class of Certificates affected thereby for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Agreement or of modifying in any manner the rights of
the Holders of Certificates of such Class; PROVIDED, HOWEVER, that no such
amendment shall:
(i) reduce in any manner the amount of, or delay the timing
of, payments which are required to be distributed on any Certificate
without the consent of the Holder of such Certificate,
(ii) reduce the aforesaid percentage of Certificates of any
Class the Holders of which are required to consent to any such
amendment, in any such case without the consent of the Holders of all
Certificates of such Class then outstanding, or
(iii) adversely affect in any material respect the interests
of the Holders of Certificates of any Class in a manner other than as
described in clause (i) hereof without the consent of Holders of
Certificates of such Class evidencing, as to such Class, Percentage
Interests aggregating not less than 66%.
(c) Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel to the effect that (1) such amendment
or the exercise of any power granted to the Certificate Administrator, the
Company or the Trustee in accordance with such amendment will not result in the
imposition of a tax on the Trust Fund or cause the Trust Fund to fail to qualify
as a REMIC at any time that any Certificate is outstanding and (2) such
amendment, if made pursuant to any provision of SECTION 11.01(A), is permitted
under such provision.
(d) Promptly after the execution of any such amendment the Trustee
shall furnish written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders under this SECTION 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
SECTION 11.02 COUNTERPARTS. For the purpose of facilitating the
recordation of this Agreement as herein provided and for other purposes, this
Agreement may be executed simultaneously in any number of counterparts, each of
which counterparts shall be deemed to be an original, and such counterparts
shall constitute but one and the same instrument.
SECTION 11.03 LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS. (a) The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
(b) No Certificateholder shall have any right to vote (except as
expressly provided for herein) or in any manner otherwise control the operation
and management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a notice of a default by the
Company, the Certificate Administrator or the Trustee in the performance of any
obligation hereunder, and of the continuance thereof, as herein- before
provided, and unless also the Holders of Certificates of any Class evidencing at
least 33% of the Voting Rights of such Class, shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 11.04 GOVERNING LAW. THIS AGREEMENT AND THE CERTIFICATES SHALL
BE CONSTRUED IN ACCORDANCE WITH THE LAWS 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 11.05 NOTICES. All demands and notices hereunder shall be in
writing and shall be deemed to have been duly given if personally delivered at
or mailed by registered mail, postage prepaid (except for notices to the Trustee
which shall be deemed to have been duly given only when received), to (a) in the
case of the Company, Taconic Asset Acceptance Company, L.L.C., Nine ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: [____________], or such
other address as may hereafter be furnished to the Certificate Administrator and
the Trustee in writing by the Company, (b) in the case of the Certificate
Administrator, [______], Attention: [__________], or such other address as may
be hereafter furnished to the Company and the Trustee by the Certificate
Administrator in writing, (c) in the case of the Trustee, [_________],
Attention: Mortgage Pass-Through Certificates, Series 20[__-__], with a copy to
[__________], Attention: Mortgage Pass-Through Certificates, Series 20[__-__],
or such other address as may hereafter be furnished to the Company and the
Certificate Administrator in writing by the Trustee, and (d) in the case of
[name of rating agency], [__________], or such other address as may hereafter be
furnished to the Company, the Trustee and the Certificate Administrator in
writing by [name of rating agency]. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first-class mail, postage
prepaid, at the address of such holder as shown in the Certificate Register and
shall be conclusively presumed to have been duly given when mailed.
SECTION 11.06 NOTICES TO RATING AGENCY. The Company, the Certificate
Administrator or the Trustee, as applicable, shall notify the Rating Agency at
such time as it is otherwise required pursuant to this Agreement to give notice
of the occurrence of any of the events described in CLAUSES (A), (B), (C), (F)
or (G) below or provide a copy to the Rating Agency at such time as otherwise
required to be delivered pursuant to this Agreement of any of the statements
described in CLAUSES (D) and (E) below:
(a) a material change or amendment to this Agreement;
(b) the occurrence of an Event of Default;
(c) the termination or appointment of a successor Certificate
Administrator or Trustee or a change in the majority ownership of the Trustee;
(d) the statement required to be delivered to the Holders of the
Certificates pursuant to SECTION 4.02;
(e) the statements required to be delivered pursuant to SECTION 3.05;
(f) a change in the location of the Certificate Account;
(g) the occurrence of the Final Distribution Date; and
(h) the repurchase of any Underlying Agency Securities.
SECTION 11.07 SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
SECTION 11.08 SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the respective successors and
assigns of the parties hereto, and all such provisions shall inure to the
benefit of the Certificateholders.
SECTION 11.09 ARTICLE AND SECTION HEADINGS. The article and section
headings herein are for convenience of reference only, and shall not limit or
otherwise affect the meaning hereof.
IN WITNESS WHEREOF, the Company, the Certificate Administrator and the
Trustee have caused their names to be signed hereto by their respective officers
thereunto duly authorized and their respective seals, if required, duly
attested, to be hereunto affixed, all as of the day and year first above
written.
TACONIC ASSET ACCEPTANCE COMPANY,
L.L.C.
[Seal] By:
------------------------------
Name:
Title:
Attest: _________________________
Name:
Title:
[NAME OF CERTIFICATE ADMINISTRATOR]
as Certificate Administrator
[Seal] By:
------------------------------
Name:
Title:
Attest: _________________________
Name:
Title:
[NAME OF TRUSTEE], as Trustee
By:
------------------------------
Name:
Title:
Attest: _________________________
Name:
Title:
STATE OF [______________] )
) ss:
COUNTY OF [_____________] )
On the [________] day of [_______ ___, 20__] before me, a notary public
in and for said State, personally appeared [__________], known to me to be a
[__________] of Taconic Asset Acceptance Company, L.L.C., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
STATE OF [______________] )
) ss:
COUNTY OF [_____________] )
On the [___________] day of [_______ __, 20__] before me, a notary
public in and for said State, personally appeared [________], known to me to be
an [_______] of (Name of Trustee], a [_________] that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said [____________], and acknowledged to me that such [___________] executed the
within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
STATE OF [______________] )
) ss:
COUNTY OF [_____________] )
On the [________] day of [_________ 20__] before me, a notary public in
and for said State, personally appeared [________] to me to be the [_________]
of [Name of Certificate Administrator], one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-------------------------------
Notary Public
[Notarial Seal]
EXHIBIT A-1
FORM OF CLASS [A-1] [A-2] [A-3] [S] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
[NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE CODE,
UNLESS THE TRANSFEREE PROVIDES AN OPINION OF COUNSEL SATISFACTORY TO THE
CERTIFICATE ADMINISTRATOR, THE COMPANY AND THE TRUSTEE THAT THE PURCHASE OF THIS
CERTIFICATE BY, ON BEHALF OF, OR WITH "PLAN ASSETS" OF SUCH PLAN IS PERMISSIBLE
UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION AND WILL NOT SUBJECT THE CERTIFICATE ADMINISTRATOR, THE COMPANY OR
THE TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT
(AS DEFINED BELOW), PROVIDED THAT NO SUCH OPINION SHALL BE REQUIRED UNDER THE
CIRCUMSTANCES SET FORTH IN THE AGREEMENT.]
[THE FOLLOWING INFORMATION IS PROVIDED SOLELY FOR THE PURPOSES OF
APPLYING THE U.S. FEDERAL INCOME TAX ORIGINAL ISSUE DISCOUNT ("OID") RULES TO
THIS CERTIFICATE. THE ISSUE DATE OF THIS CERTIFICATE IS [_________ __, 20__].
ASSUMING THAT THE MORTGAGE LOANS PREPAY AT [__]% OF THE STANDARD PREPAYMENT
ASSUMPTION (AS DESCRIBED IN THE PROSPECTUS SUPPLEMENT) AND ASSUMING A CONSTANT
PASS-THROUGH RATE EQUAL TO THE INITIAL PASS-THROUGH RATE, THIS CERTIFICATE HAS
BEEN ISSUED WITH NO MORE THAN $[________] OF OID PER [$1,000/$100,000] OF
[PRINCIPAL/NOTIONAL] AMOUNT AND THE YIELD TO MATURITY IS [_____]%, COMPUTED
UNDER THE APPROXIMATE METHOD. THERE IS NO SHORT ACCRUAL PERIOD WITH RESPECT TO
THIS CERTIFICATE. NO REPRESENTATION IS MADE THAT THE MORTGAGE LOANS WILL PREPAY
AT A RATE BASED ON THE STANDARD PREPAYMENT ASSUMPTION OR AT ANY OTHER RATE OR AS
TO THE CONSTANCY OF THE PASS-THROUGH RATE.]
Class [A-1] [A-2] [A-3] [S] Certificate No. [________]
Date of Trust Agreement: [_]% Pass-Through Rate
[__________ 1, 20__] [based on Notional Amount]
Reference Date:
[___________ 1, 20__]
First Distribution Date: [Aggregate Initial Certificate
[___________ __, 20__] Principal Balance of the
Class [A-1] [A-2][A-3]
Certificates as of the
Reference Date: $[______]
Certificate Administrator: [Initial Certificate Principal
[_______________] Balance of this Certificate:
$-------------]
Assumed Termination Date:
[____________ __, 20__] [Percentage Interest: _____$]
CUSIP [___________]
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 20[__-__]
evidencing a percentage interest in any distributions
allocable to the Class [A-1][A-2][A-3][S] Certificates with
respect to the Trust Fund consisting of the Underlying Agency
Securities formed and sold by Taconic Asset Acceptance
Company, L.L.C.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Taconic Asset Acceptance
Company, L.L.C., the Certificate Administrator or the Trustee. Although payment
of principal and interest on the Underlying Agency Securities is guaranteed by
[GNMA], this Certificate is not guaranteed or insured by any governmental agency
or instrumentality or by Taconic Asset Acceptance Company, L.L.C., the
Certificate Administrator or the Trustee.
This certifies that [__________] is the registered owner of the
Percentage Interest evidenced by this Certificate ([obtained by dividing the
Certificate Principal Balance of this Certificate by the aggregate Certificate
Principal Balance of all Class [A-1][A-2][A-3] Certificates, both] as specified
above) in certain distributions with respect to a Trust Fund consisting
primarily of a pool of the Underlying Agency Securities, formed and sold by
Taconic Asset Acceptance Company, L.L.C. (hereinafter called the "COMPANY",
which term includes any successor entity under the Agreement referred to below).
The Trust Fund was created pursuant to a Trust Agreement dated as specified
above (the "AGREEMENT") among the Company, the Certificate Administrator and
[_________], as trustee (the "TRUSTEE"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the third Business Day following the Underlying Security Distribution Date for
the Underlying Agency Securities (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such last
day) of the month next preceding the month of the Underlying Security
Distribution Date for the Underlying Agency Securities (the "RECORD DATE"), from
the Available Funds in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Class [__] Certificates on such Distribution Date. [The Notional
Amount of the Class [S] Certificates as of any date of determination is equal to
the Aggregate Underlying Certificate Balance. The Class [S] Certificates have no
Certificate Principal Balance.]
Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee in immediately available funds (by
wire transfer or otherwise) for the account of the Person entitled thereto
except as otherwise provided in the Agreement if such Person shall have so
notified the Certificate Administrator or such Paying Agent, or by check mailed
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City of New York. [The initial aggregate
Certificate Principal Balance of the Certificates is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of the
distributions allocable to principal.]
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates"). The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Underlying Agency Securities, all as more specifically
set forth herein and in the Agreement.
As provided in the Agreement, withdrawals from the Certificate Account
created for the benefit of Certificateholders may be made by the Certificate
Administrator from time to time for purposes other than distributions to
Certificateholders, such purposes including without limitation reimbursement to
the Company and the Certificate Administrator of certain expenses incurred, by
either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Certificate Administrator and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the
Certificate Administrator and the Trustee with the consent of the Holders of
Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates affected thereby. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon the Certificate. The Agreement also
permits the amendment thereof in certain circumstances without the consent of
the Holders of any of the Certificates and, in certain additional circumstances,
without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Certificate Administrator, the Trustee and the
Certificate Registrar and any agent of the Company, the Certificate
Administrator, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Certificate Administrator, the Trustee nor any such
agent shall be affected by notice to the contrary.
THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following receipt of the
final distribution to be made on the last remaining Underlying Agency Security
in the Trust Fund upon presentation and surrender of such Underlying Agency
Security in accordance with the terms and conditions thereof.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated:
[NAME OF TRUSTEE],
as Trustee
By:
---------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A-1] [A-2] [A-3] [S] Certificates referred to
in the within-mentioned Agreement.
[NAME OF CERTIFICATE REGISTRAR],
as Certificate Registrar
By:
---------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
(Please print or typewrite name and address including postal zip code
of assignee) the beneficial interest evidenced by the within the Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination to the above named assignee and deliver such
Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
---------------------
-------------------------------------
Signature by or on behalf of assignor
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ______________ for the account of __________
account number _________, or, if mailed by check, to _________________________.
Applicable statements should be mailed to: _______________________.
This information is provided by ___________________ the assignee named
above, or ____________, as its agent.
EXHIBIT A-2
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON
OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, OR SECTION 4975 OF THE CODE, AS AMENDED, OR SECTION
4975 OF THE CODE, UNLESS THE TRANSFEREE PROVIDES AN OPINION OF COUNSEL
SATISFACTORY TO THE CERTIFICATE ADMINISTRATOR, THE COMPANY AND THE TRUSTEE THAT
THE PURCHASE OF THIS CERTIFICATE BY, ON BEHALF OF, OR WITH "PLAN ASSETS" OF SUCH
PLAN IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT SUBJECT THE CERTIFICATE
ADMINISTRATOR, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT (AS DEFINED BELOW), PROVIDED THAT NO SUCH OPINION
SHALL BE REQUIRED UNDER THE CIRCUMSTANCES SET FORTH IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R CERTIFICATE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE
CERTIFICATE ADMINISTRATOR AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT EITHER
(A) THE UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF
THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511
OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE
CODE, (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING
HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A
DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE
ASSESSMENT OR COLLECTION OF TAX, AND (3) SUCH TRANSFEREE SATISFIES CERTAIN
ADDITIONAL CONDITIONS OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE
CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
RESIDUAL CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A
DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL
FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY
ACCEPTANCE OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE
PROVISIONS OF THIS PARAGRAPH.
Class R Certificate No. [________]
Date of Trust Agreement: [_]% Pass-Through Rate
[__________ 1, 20__]
Reference Date:
[___________ 1, 20__]
First Distribution Date: Aggregate Initial Certificate
[___________ __, 20__] Principal the Class R
Certificates: $[______]
Certificate Administrator: Initial Certificate Principal
[_______________] Balance of this Certificate:
$_______________]
Assumed Termination Date:
[____________ __, 20_] [____] % Percentage Interest
CUSIP [___________]
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 20[__-__]
evidencing a percentage interest in any distributions
allocable to the Class R Certificates with respect to the
Trust Fund consisting of a pool of Underlying Agency
Securities formed and sold by Taconic Asset Acceptance
Company, L.L.C.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Taconic Asset Acceptance
Company, L.L.C., the Certificate Administrator or the Trustee. Although payment
of principal and interest on the Underlying Agency Securities is guaranteed by
[GNMA], this Certificate is not guaranteed or insured by any governmental agency
or instrumentality or by Taconic Asset Acceptance Company, L.L.C., the
Certificate Administrator or the Trustee.
This certifies that [__________] is the registered owner of a
percentage interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of the Certificate by the aggregate
Initial Certificate Principal Balance of all Class R Certificates, both as
specified above) in certain distributions with respect to the Trust Fund
consisting primarily of a pool of Underlying Agency Securities, formed and sold
by Taconic Asset Acceptance Company, L.L.C. (hereinafter called the "COMPANY",
which term includes any successor entity under the Agreement referred to below).
The Trust Fund was created pursuant to a Trust Agreement dated as specified
above (the "AGREEMENT") among the Company, the Certificate Administrator and
[________], as trustee (the "TRUSTEE"), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the third Business Day following the Underlying Security Distribution Date for
the Underlying Agency Securities (the "DISTRIBUTION DATE"), commencing on the
first Distribution Date specified above, to the Person in whose name this
Certificate is registered at the close of business on the last day (or if such
last day is not a Business Day, the Business Day immediately preceding such last
day) of the month immediately preceding the month of the related Distribution
Date for the Underlying Agency Securities (the "RECORD DATE"), from the
Available Funds in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Class R Certificates on such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City of New York. The Initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of distributions
allocable to principal. Notwithstanding the reduction of the Certificate
Principal Balance hereof to zero, this Certificate will remain outstanding under
the Agreement and the Holder hereof may have additional obligations with respect
to this Certificate, including tax liabilities, and may be entitled to certain
additional distributions hereon, in accordance with the terms and provisions of
the Agreement.
In connection with any transfer of this Certificate, the Trustee will
require (a) a representation letter, in the form as described by the Agreement,
stating that the transferee is not an employee benefit plan or other plan
subject to the fiduciary responsibility provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or (b) if such transferee is
an employee benefit plan or other plan subject to ERISA, an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee, the Company
and the Servicer with respect to the permissibility of such transfer under ERISA
and stating, among other things, that the transferee's acquisition of this Class
R Certificate is permissible under applicable law, will not constitute or result
in any non-exempt "prohibited transaction" under Section 406 of ERISA or Section
4975 of the Internal Revenue Code of 1986 and will not subject the Trustee, the
Company or the Certificate Administrator to any obligation or liability
(including obligations under ERISA or Section 4975 of the Code) in addition to
those undertaken in the Agreement. Each Holder of this Class R Certificate will
be deemed to have agreed to be bound by the restrictions set forth in the
Agreement to the effect that (i) each person holding or acquiring any Ownership
Interest in this Class R Certificate must be a Permitted Transferee (and may not
be a Non-United States Person), (ii) no ownership Interest in this Class R
Certificate may be transferred without the express written consent of the
Company, which consent may be conditioned on the delivery to the Company of,
among other things, an opinion of counsel, (iii) any attempted or purported
transfer of any Ownership Interest in this Class R Certificate in violation of
such restrictions will be absolutely null and void and will vest no rights in
the purported transferee, and (iv) if any Person other than a Permitted
Transferee acquires any Ownership Interest in this Class R Certificate in
violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Class R Certificate to
sell this Class R Certificate to a purchaser selected by the Company, which
purchaser may be the Company, or any affiliate of the Company, on such terms and
conditions as the Company may choose.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the specified hereon (herein collectively called the "CERTIFICATES"). The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Underlying Agency Securities, all as more specifically
set forth herein and in the Agreement.
As provided in the Agreement, withdrawals from the Certificate Account
created for the benefit of Certificateholders may be made by the Certificate
Administrator from time to time for purposes other than distributions to
Certificateholders, such purposes including without limitation reimbursement to
the Company and the Certificate Administrator of advances made, or certain
expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Certificate Administrator and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the
Certificate Administrator and the Trustee with the consent of the Holders of
Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates affected thereby. Any such consent by
the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon the Certificate. The Agreement also
permits the amendment thereof in certain circumstances without the consent of
the Holders of any of the Certificates and, in certain additional circumstances,
without the consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Certificate Administrator, the Trustee and the
Certificate Registrar and any agent of the Company, the Certificate
Administrator, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Company, the Certificate Administrator, the Trustee nor any such
agent shall be affected by notice to the contrary.
THIS CERTIFICATE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following receipt of the
final distribution to be made on the last remaining Underlying Agency Security
in the Trust Fund upon presentation and surrender of such Underlying Agency
Security in accordance with the terms and conditions thereof.
IN WITNESS WHEREOF, the Trustee has caused this Class R Certificate to
be duly executed.
Dated: [NAME OF TRUSTEE],
as Trustee
By:
----------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
[NAME OF CERTIFICATE REGISTRAR],
as Certificate Registrar
By:
----------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
-------------------------------------------------------------------------------.
(Please print or typewrite name and address including postal zip code
of assignee) the beneficial interest evidenced by the within the Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following address: ___________________.
Dated: ________________
-------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _____________________________ for the account of
___________________ account number ______________ or, if mailed by check, to
_________________________________ _______________. Applicable statements should
be mailed to __________________.
This information is provided by ______________________, the assignee
named above, or __________________, as its agent.
EXHIBIT B-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF [______________] )
) ss:
COUNTY OF [_____________] )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he or she is [Title of Officer] of [Name of Owner] (record or
beneficial owner (the "OWNER") of the Mortgage Pass-Through Certificates, Series
20[__-__], Class R Certificate (the "RESIDUAL CERTIFICATES")), a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of __________] [the United States], on behalf of which he makes this
affidavit and agreement. The Residual Certificates were issued pursuant to the
Trust Agreement, dated as of [________ 1, 20__], among Taconic Asset Acceptance
Company, L.L.C., as the company (the "COMPANY"), [____________], as certificate
administrator (the "CERTIFICATE ADMINISTRATOR") and [__________________], as
trustee (the "TRUSTEE").
2. That the Owner (i) is not and will not be a "disqualified
organization" as of [date of transfer] within the meaning of Section 860E(e)(5)
of the Internal Revenue Code of 1986, as amended (the "CODE"), (ii) will
endeavor to remain other than a disqualified organization for so long as it
retains its ownership interest in the Residual Certificate and (iii) is
acquiring the Residual Certificates for its own account or for the account of
another Owner from which it has received an affidavit in substantially the same
form as this affidavit and agreement. (For this purpose, a "disqualified
organization" means the United States, any state or political subdivision
thereof, or any agency or instrumentality of any of the foregoing (other than an
instrumentality all of the activities of which are subject to tax and, except
for the Federal Home Loan Mortgage Corporation, a majority of whose board of
directors is not selected by any such governmental entity), or any foreign
government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of the Residual Certificates to disqualified organizations under the
Code that applies to all transfers of Residual Certificates after March 31,
1988; (ii) that such tax would be on the transferor, or, if such transfer is
through an agent (which person includes a broker, nominee or middleman) for a
disqualified organization, on the agent; (iii) that the person otherwise liable
for the tax shall be relieved of liability for (b) the tax if the transferee
furnishes to such person an affidavit that the transferee is not a disqualified
organization and, at the time of transfer, such person does not have actual
knowledge that the affidavit is false; and (iv) that the Residual Certificates
may be "noneconomic residual interests" within the meaning of proposed Treasury
regulations promulgated pursuant to the Code and that the transferor of a
noneconomic residual interest will remain liable for any taxes due with respect
to the income of such residual interest, unless no significant purpose of the
transfer was to impede the assessment or collection of tax.
1. That the Owner is aware of the tax imposed on a "pass-through
entity" holding the Residual Certificates if at any time during the taxable year
of the pass-through entity a disqualified organization is the record holder of
an interest in such entity. (For this purpose, a "pass through entity" includes
a regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)
2. That the Owner is aware that the Trustee will not register the
transfer of any Residual Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.
3. That the Owner has reviewed the restrictions set forth on the face
of the Residual Certificates and the provisions of Section 4.02(f) of the
Pooling and Servicing Agreement under which the Residual Certificates were
issued (in particular, clause (iii)(A) and (iii)(B) of Section 4.02(f) which
authorize the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event the Owner holds such
Certificates in violation of Section 4.02(f)). The Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
4. The Owner warrants and represents that it is [a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended] [a person involved in the organization or operation of
the Company or Certificate Administrator, or an affiliate, as defined in Rule
405 under the Securities Act of 1933, as amended, of either of them].
5. That the Owner consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Residual Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.
6. The Owner's Taxpayer Identification Number is [_____________].
7. This affidavit and agreement relates only to the Residual
Certificates held by the owner and not to any other holder of the Residual
Certificates. The Owner understands that the liabilities described herein relate
only to the Residual Certificates.
8. That no purpose of the Owner relating to the purchase of any of the
Residual Certificates by the owner is or will be to impede the assessment or
collection of any tax.
9. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Residual Certificates remain outstanding. In this regard, the owner hereby
represents to and for the benefit of the person from whom it acquired the
Residual Certificate that the Owner intends to pay taxes associated with holding
such Residual Certificate as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Residual
Certificate.
10. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
11. The Owner is not an employee benefit plan or other plan subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
Section 4975 of the Internal Revenue Code of 1986 (the "CODE"), or an investment
manager, a named fiduciary or a trustee of any such plan or any other Person
acting, directly or indirectly, on behalf of or purchasing any Residual
Certificate with "plan assets" of any such plan, and understands that
registration of transfer of any Residual Certificate to any such plan, or to any
Person acting on behalf of or purchasing any Residual Certificate with "plan
assets" of any such plan, will not be made unless such plan or Person delivers
an opinion of its counsel, addressed and satisfactory to the Trustee, the
Company and the Certificate Administrator, to the effect that the purchase and
holding of a Residual Certificate by, on behalf of or with "plan assets" of any
such plan is permissible under applicable law, would not constitute or result in
any non-exempt prohibited transaction under Section 406 of ERISA or Section 4975
of the Code, and would not subject the Company, the Certificate Administrator or
the Trustee to any obligation or liability (including liabilities under Section
406 of ERISA or Section 4975 of the Code) in addition to those undertaken in the
Trust Agreement or any other liability.
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed
on its behalf, pursuant to the authority of its Board of Directors, by its
[Title of Officer] and its corporate seal to be hereunto attached, attested by
its [Assistant] Secretary, this __ day of _____, 20__.
[NAME OF OWNER]
By:
----------------------------
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
----------------------------------
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Owner, and acknowledged to me that he
executed the same as his free act and deed and the free act and deed of the
Owner.
Subscribed and sworn before me this ___ day of ______________, 20__.
-------------------------------
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the ___________ day of _____________, 20_.
EXHIBIT B-2
FORM OF TRANSFEROR CERTIFICATE
[_____________ 20_]
Taconic Asset Acceptance Company, L.L.C.
Nine ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[Name of Trustee]
[Address of Trustee]
Attention: [_________________]
Re: MORTGAGE PASS-THROUGH CERTIFICATES, RESIDUAL CERTIFICATES,
SERIES 20[__-__]
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
[_________] (the "SELLER") to [___________] (the "PURCHASER") of $[_________]
Initial Certificate Principal Balance of the Mortgage Pass-Through Certificates,
Series 20[__-__], Class R Certificate (the "RESIDUAL CERTIFICATES"), pursuant to
Section [___________] of the Trust Agreement (the "TRUST AGREEMENT"), dated as
of [__________ 1, 20__] among Taconic Asset Acceptance Company, L.L.C., as the
company (the "COMPANY"), [___________], as the certificate administrator (the
"CERTIFICATE ADMINISTRATOR"), and [_________], as trustee (the "TRUSTEE"). All
terms used herein and not otherwise defined shall have the meanings set forth in
the Trust Agreement. The Seller hereby certifies, represents and warrants to,
and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to transfer of the
Residual Certificate by the Seller to the Purchaser is or will be to
impede the assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to
the Trustee and the Certificate Administrator a Transfer Affidavit and
Agreement in the form attached to the Trust Agreement as EXHIBIT B-1.
The Seller does not know or believe that any representation contained
therein is false.
3. The Seller has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-1(c)(r)(i) and, as
a result of that investigation, the Seller has determined that the
Purchaser has historically paid its debts as they become due and has
found no significant evidence to indicate that the Purchaser will not
continue to pay its debts as they become due in the future. The Seller
understands that the transfer of a Residual Certificate may not be
respected for United States income tax purposes (and the Seller may
continue to be liable for United States income taxes associated
therewith) unless the Seller has conducted such an investigation.
Very truly yours,
[NAME OF SELLER]
(Seller)
By:
---------------------------
Name:
Title: