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TRUST AGREEMENT
between
GREENPOINT MORTGAGE SECURITIES INC.
Sponsor
and
[OWNER TRUSTEE]
Owner Trustee
Dated as of __________, 200_
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TABLE OF CONTENTS
Page
ARTICLE I Definitions........................................................1
SECTION 1.1. Defined Terms..............................................1
SECTION 1.2. Other Definitional Provisions..............................2
SECTION 1.3. Action by or Consent of Noteholders and Residual
Certificateholders.........................................3
ARTICLE II Organization......................................................3
SECTION 2.1. Name.......................................................3
SECTION 2.2. Office.....................................................3
SECTION 2.3. Purposes and Powers........................................3
SECTION 1.4. Appointment of Owner Trustee...............................4
SECTION 2.5. Initial Capital Contribution of Trust Estate...............4
SECTION 2.6. Declaration of Trust.......................................4
SECTION 2.7. Liability..................................................5
SECTION 2.8. Title to Trust Property....................................5
SECTION 2.9. Situs of Trust.............................................5
SECTION 2.10. Representations and Warranties of the Sponsor..............5
SECTION 2.11. Federal Income Tax Allocations.............................6
SECTION 2.12. Covenants of the Sponsor...................................7
SECTION 2.13. Covenants of the Residual Certificateholders...............8
ARTICLE III [Reserved].......................................................9
ARTICLE IV Ownership of Trust Property; Residual Certificates and Transfer
of Interests...................................................9
SECTION 4.1. Trust Property Ownership...................................9
SECTION 4.2. The Residual Certificates..................................9
SECTION 4.3. Authentication of Residual Certificates....................9
SECTION 4.4. Registration of Transfer and Exchange
of Residual Certificates...............................10
SECTION 4.5. Mutilated, Destroyed, Lost or Stolen Residual
Certificates...........................................10
SECTION 4.6. Persons Deemed Residual Certificateholders................11
SECTION 4.7. Access to List of Residual Certificateholders' Names
and Addresses..........................................11
SECTION 4.8. Maintenance of Office or Agency...........................11
SECTION 4.9. ERISA Restrictions........................................11
SECTION 4.10. Restrictions on Transfer of Residual Certificates.........12
SECTION 4.11. Acceptance of Obligations.................................13
SECTION 4.12. Distributions on Residual Certificates....................13
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ARTICLE V Voting Rights and Other Actions...................................13
SECTION 5.1. Prior Notice to Holders with Respect to Certain Matters...13
SECTION 5.2. Action by Residual Certificateholders with Respect
to Certain Matters.....................................14
SECTION 5.3. Action with Respect to Bankruptcy.........................14
SECTION 5.4. Restrictions on Residual Certificateholders' Power........15
SECTION 5.5. Majority Control..........................................15
SECTION 5.6. Rights of the Insurer.....................................15
ARTICLE VI Certain Duties...................................................16
SECTION 6.1. Accounting and Records to the Noteholders, Residual
Certificateholders, the Internal Revenue Service and
Others.................................................16
SECTION 6.2. Signature on Returns; Tax Matters Partner.................16
SECTION 6.3. Underwriting Agreement....................................17
ARTICLE VII Authority and Duties of Owner Trustee...........................17
SECTION 7.1. General Authority.........................................17
SECTION 7.2. General Duties............................................17
SECTION 7.3. Action upon Instruction...................................17
SECTION 7.4. No Duties Except as Specified in this Agreement or
in Instructions........................................18
SECTION 7.5. No Action Except under Specified Documents
or Instructions........................................19
SECTION 7.6. Restrictions..............................................19
ARTICLE VIII Concerning the Owner Trustee...................................19
SECTION 8.1. Acceptance of Trust and Duties............................19
SECTION 8.2. Furnishing of Documents...................................20
SECTION 8.3. Representations and Warranties............................20
SECTION 8.4. Reliance; Advice of Counsel...............................21
SECTION 8.5. Not Acting in Individual Capacity.........................21
SECTION 8.6. Owner Trustee Not Liable for Notes, Residual
Certificates or Mortgage Loans.........................21
SECTION 8.7. Owner Trustee May Own Notes and Residual Certificates.....22
SECTION 8.8. Payments from Owner Trust Estate..........................22
SECTION 8.9. Doing Business in Other Jurisdictions.....................22
ARTICLE IX Compensation of Owner Trustee....................................23
SECTION 9.1. Owner Trustee's Fees and Expenses.........................23
SECTION 9.2. Indemnification...........................................23
SECTION 9.3. Payments to the Owner Trustee.............................23
SECTION 9.4. Non-recourse Obligations..................................23
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ARTICLE X Termination of Trust Agreement....................................23
SECTION 10.1. Termination of Trust Agreement............................23
ARTICLE XI Successor Owner Trustees and Additional Owner Trustees...........25
SECTION 11.1. Eligibility Requirements for Owner Trustee................25
SECTION 11.2. Resignation or Removal of Owner Trustee...................25
SECTION 11.3. Successor Owner Trustee...................................26
SECTION 11.4. Merger or Consolidation of Owner Trustee..................27
SECTION 11.5. Appointment of Co-Owner Trustee or Separate
Owner Trustee..........................................27
ARTICLE XII Miscellaneous...................................................28
SECTION 12.1. Supplements and Amendments................................28
SECTION 1.2. No Legal Title to Owner Trust Estate in Residual
Certificateholders........................................29
SECTION 12.3. Limitations on Rights of Others...........................29
SECTION 12.4. Notices...................................................30
SECTION 12.5. Severability..............................................30
SECTION 12.6. Separate Counterparts.....................................30
SECTION 12.7. Assignments; Insurer......................................30
SECTION 12.8. No Petition...............................................31
SECTION 12.9. No Recourse...............................................31
SECTION 12.10. Headings..................................................31
SECTION 12.11. GOVERNING LAW.............................................31
SECTION 12.12. Servicer..................................................31
EXHIBITS
Exhibit A Reserved
Exhibit B Form of Residual Certificate
Exhibit C Form of Certificate of Trust
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TRUST AGREEMENT dated as of __________, 200_ (the "Agreement")
between GREENPOINT MORTGAGE SECURITIES INC., a Delaware corporation (the
"Sponsor"), and [OWNER TRUSTEE], a [State, Type of Organization] as Owner
Trustee.
ARTICLE I
Definitions
SECTION 1.1. Defined Terms. For the purposes of this Agreement, the
following terms shall have the meanings set forth below. All other capitalized
terms used herein but not defined shall have the meanings set forth in Annex A
to the Indenture dated as of __________, 200_ (the "Indenture"), between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Affiliate" shall mean with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, or owns, directly or
indirectly, 50% or more of, the Person specified.
"Agreement" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time.
"Benefit Plan" shall have the meaning assigned to such term in
Section 4.9.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq. as the same may be amended from
time to time.
"Certificate of Trust" shall mean the Certificate of Trust in the
form of Exhibit C to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean the
register maintained and the registrar respectively appointed pursuant to Section
4.4.
"Definitive Residual Certificates" shall mean Residual Certificates
issued in certificated, fully registered form.
"Expenses" shall have the meaning assigned to such term in Section
9.2.
"Indemnified Parties" shall have the meaning assigned to such term
in Section 9.2.
"Instructing Party" shall have the meaning assigned to such term in
Section 7.3.
"Owner" shall have the meaning assigned to such term in Section 3.5.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Collection Account and all other property of the Trust from time
to time, including any rights of the Issuer pursuant to the Sale
and Servicing Agreement and any rights of the Sponsor, in its capacity as
Purchaser, pursuant to the Mortgage Loan Purchase Agreement.
"Proposer" shall have the meaning ascribed to it in Section 5.2(b)
herein.
"Residual Certificate" shall mean a trust certificate evidencing the
beneficial ownership interest of a Residual Certificateholder in the Trust,
substantially in the form of Exhibit B attached hereto.
"Residual Certificateholder" shall mean the Person in whose name a
Residual Certificate is registered on the Certificate Register.
"Secretary of State" shall mean the Secretary of State of the State
of Delaware.
"Security Majority" shall mean a majority by principal amount of the
Noteholders so long as the Notes are outstanding and a majority by principal
amount of the Residual Certificateholders thereafter.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
SECTION 1.2. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
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(d) The definitions contained in this Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
SECTION 1.3. Action by or Consent of Noteholders and Residual
Certificateholders. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by Noteholders or Residual Certificateholders, such
provision shall be deemed to refer to the Noteholder or Residual
Certificateholder, as the case may be, of record as of the Record Date
immediately preceding the date on which such action is to be taken, or consent
given, by Noteholders or Residual Certificateholders. Solely for the purposes of
any action to be taken, or consented to, by Noteholders, or Residual
Certificateholders, any Note or Certificate Registered in the name of the
Sponsor or any Affiliate thereof shall be deemed not to be outstanding;
provided, however, that, solely for the purpose of determining whether the
Indenture Trustee is entitled to rely upon any such action or consent, only
Notes or Residual Certificates which the Owner Trustee, or the Indenture
Trustee, respectively, knows to be so owned shall be so disregarded.
ARTICLE II
Organization
SECTION 2.1. Name. There is hereby formed a trust to be known as
"GreenPoint Home Equity Loan Trust 200_-_", in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and ▇▇▇ and be sued.
SECTION 2.2. Office. The office of the Trust shall be in the care of
the Owner Trustee at the Corporate Trust Office or at such other address as the
Owner Trustee may designate by written notice to the Residual Certificateholders
and the Sponsor.
SECTION 2.3. Purposes and Powers.
(a) The purpose of the Trust is, and the Trust shall have the power
and authority, to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the Residual
Certificates pursuant to this Agreement, and to sell the Notes and
Residual Certificates;
(ii) to assign, grant, transfer, pledge, mortgage and convey the
Owner Trust Estate to the Indenture Trustee on behalf of the Noteholders
and for the benefit of the Insurer and to hold, manage and distribute to
the Residual Certificateholders pursuant to the terms of the Sale and
Servicing Agreement any portion of the Owner Trust Estate released from
the Lien of, and remitted to the Trust pursuant to, the Indenture;
(iii) with the proceeds of the sale of the Notes, to pay the
organizational, start-up and transactional expenses of the Trust and to
pay the balance to the Sponsor pursuant to the Sale and Servicing
Agreement;
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(iv) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Owner Trust Estate and the making of distributions to the
Noteholders and the Residual Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4. Appointment of Owner Trustee. The Sponsor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5. Initial Capital Contribution of Trust Estate. The
Sponsor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Sponsor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Collection Account. On or prior to the Closing
Date, the Owner Trustee will also, upon receipt thereof, acknowledge on behalf
of the Trust receipt of the Mortgage Loans pursuant to the Sale and Servicing
Agreement. The Sponsor shall pay organizational expenses of the Trust as they
may arise or shall, upon the request of the Owner Trustee, promptly reimburse
the Owner Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Residual
Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust constitute a
business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. It is the intention
of the parties hereto that, solely for income tax purposes, the Trust shall be
treated as a branch; provided, however, that in the event Residual Certificates
are owned by more than one Residual Certificateholder, it is the intention of
the parties hereto that, solely for income and franchise tax purposes, the Trust
shall then be treated as a partnership and that, unless otherwise required by
appropriate tax authorities, only after such time the Trust will file or cause
to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a partnership for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein and to the extent not inconsistent
herewith, in the Business Trust Statute with respect to accomplishing the
purposes of the Trust. The Owner Trustee shall file the Certificate of Trust
with the Secretary of State.
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SECTION 2.7. Liability. No Holder shall have any personal liability
for any liability or obligation of the Trust.
SECTION 2.8. Title to Trust Property.
(a) Legal title to all the Owner Trust Estate shall be vested at all
times in the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Owner Trust Estate to be vested
in a trustee or trustees, in which case title shall be deemed to be vested in
the Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
(b) The Holders shall not have legal title to any part of the Trust
Property. The Holders shall be entitled to receive distributions with respect to
their undivided ownership interest therein only in accordance with Article IX.
No transfer, by operation of law or otherwise, of any right, title or interest
by any Residual Certificateholder of its ownership interest in the Owner Trust
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal title
to any part of the Trust Property.
SECTION 2.9. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. Payments will be received by the Trust only in Delaware or
New York and payments will be made by the Trust only from Delaware or New York.
The Trust shall not have any employees in any state other than Delaware;
provided, however, that nothing herein shall restrict or prohibit the Owner
Trustee, the Servicer or any agent of the Trust from having employees within or
without the State of Delaware. The only office of the Trust will be at the
Corporate Trust Office in Delaware.
SECTION 2.10. Representations and Warranties of the Sponsor. The
Sponsor makes the following representations and warranties on which the Owner
Trustee relies in accepting the Owner Trust Estate in trust and issuing the
Notes and the Residual Certificates and upon which the Insurer relies in issuing
the Policy.
(a) The Sponsor is duly organized and validly existing as a Delaware
corporation with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently
conducted and is proposed to be conducted pursuant to this Agreement and the
Basic Documents;
(b) It is duly qualified to do business as a foreign corporation in
good standing, and has obtained all necessary licenses and approvals, in all
jurisdictions in which the ownership or lease of its property, the conduct of
its business and the performance of its obligations under this Agreement and the
Basic Documents requires such qualification;
(c) The Sponsor has the corporate power and authority to execute and
deliver this Agreement and to carry out its terms; this Agreement, when executed
and delivered by the Sponsor, will constitute the legal, valid and binding
obligations of the Sponsor, enforceable in accordance with its terms, except as
such enforceability may be limited by bankruptcy,
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insolvency, reorganization, moratorium or other similar laws affecting
creditors' rights generally and general equitable principles; the Sponsor has
full power and authority to sell and assign the property to be sold and assigned
to and deposited with the Trust and the Sponsor has duly authorized such sale
and assignment and deposit to the Trust by all necessary corporate action; and
the execution, delivery and performance of this Agreement has been duly
authorized by the Sponsor by all necessary corporate action;
(d) No consent, license, approval or authorization or registration
or declaration with, any Person or with any governmental authority, bureau or
agency is required in connection with the execution, delivery or performance of
this Agreement and the Basic Documents, except for such as have been obtained,
effected or made;
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Sponsor, or any material indenture, agreement or
other instrument to which the Sponsor is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or, to the
best of the Sponsor's knowledge, any order, rule or regulation applicable to the
Sponsor of any court or of any Federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Sponsor or its properties; and
(f) There are no proceedings or investigations pending or, to its
knowledge threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (A) asserting the invalidity of this
Agreement or any of the Basic Documents, (B) seeking to prevent the issuance of
the Notes or the Residual Certificates or the consummation of any of the
transactions contemplated by this Agreement or any of the Basic Documents, (C)
seeking any determination or ruling that might materially and adversely affect
its performance of its obligations under, or the validity or enforceability of,
this Agreement or any of the Basic Documents, or (D) seeking to adversely affect
the federal income tax or other federal, state or local tax attributes of the
Notes or the Residual Certificates.
SECTION 2.11. Federal Income Tax Allocations(a) . For so long as the
Trust has a single owner for federal income tax purposes, it will, pursuant to
Treasury Regulations promulgated under section 7701 of the Code, be disregarded
as an entity distinct from the Residual Certificateholder for all federal income
tax purposes. Accordingly, for federal income tax purposes, the Residual
Certificateholder will be treated as (i) owning all assets owned by the Trust,
(ii) having incurred all liabilities incurred by the Trust, and (iii) all
transactions between the Trust and the Residual Certificateholder will be
disregarded.
(b) Neither the Owner Trustee nor any Residual Certificateholder
will, under any circumstances, and at any time, make an election on IRS Form
8832 or otherwise, to classify the Trust as an association taxable as a
corporation for federal, state or any other applicable tax purpose.
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(c) In the event that the Trust is treated as a partnership for
Federal income tax purposes, net income of the Trust for any month as determined
for Federal income tax purposes (and each item of income, gain, loss, credit and
deduction entering into the computation thereof) shall be allocated: (i) to the
extent of available net income, among the Residual Certificateholders and the
Holders of any other securities treated as equity in the partnership as of the
first Record Date following the end of such month, in proportion to their
ownership of principal amount of Residual Certificates and any such securities
on such date; (ii) to the Sponsor, to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the
allocations described in clause (i) above, subsequent net income shall first be
allocated to make up such shortfall before being allocated as provided in clause
(ii). Net losses of the Trust, if any, for any month as determined for Federal
income tax purposes (and each item of income, gain, loss, credit and deduction
entering into the computation thereof) shall be allocated among the Residual
Certificateholders and the Holders of any other securities treated as equity in
the partnership as of the Record Date in proportion to their ownership
percentage of principal amount of Residual Certificates and any such securities,
respectively, on such Record Date until the principal balance of the Residual
Certificates and any such securities is reduced to zero. The Sponsor is
authorized to modify the allocations in this paragraph if necessary or
appropriate, in its sole discretion, for the allocations to fairly reflect the
economic income, gain or loss to the Residual Certificateholders and the Holders
of any other securities treated as equity in the partnership, or as otherwise
required by the Code.
SECTION 2.12. Covenants of the Sponsor. The Sponsor agrees and
covenants for the benefit of each Residual Certificateholder, the Insurer and
the Owner Trustee, during the term of this Agreement, and to the fullest extent
permitted by applicable law, that:
(a) it shall not create, incur or suffer to exist any indebtedness
or engage in any business, except, in each case, as permitted by its certificate
of incorporation and the Basic Documents;
(b) it shall not, for any reason, institute proceedings for the
Trust to be adjudicated a bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(c) it shall obtain from each counterparty to each Basic Document to
which it or the Trust is a party and each other agreement entered into on or
after the date hereof to which it or the Trust is a party, an agreement by each
such counterparty that prior to the occurrence of the event specified in Section
10.1(e) such counterparty shall not institute against, or join any other Person
in instituting against, it or the Trust, any bankruptcy, reorganization,
arrangement,
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insolvency or liquidation proceedings or other similar proceedings under the
laws of the United States or any state of the United States; and
(d) it shall not, for any reason, withdraw or attempt to withdraw
from this Agreement, dissolve, institute proceedings for it to be adjudicated a
bankrupt or insolvent, or consent to the institution of bankruptcy or insolvency
proceedings against it, or file a petition seeking or consenting to
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of it or a substantial part of
its property, or make any assignment for the benefit of creditors, or admit in
writing its inability to pay its debts generally as they become due, or declare
or effect a moratorium on its debt or take any action in furtherance of any such
action.
SECTION 2.13. Covenants of the Residual Certificateholders. Each
Residual Certificateholder agrees:
(a) to be bound by the terms and conditions of the Residual
Certificates and of this Agreement, including any supplements or amendments
hereto and to perform the obligations of a Residual Certificateholder as set
forth therein or herein, in all respects as if it were a signatory hereto. This
undertaking is made for the benefit of the Trust, the Owner Trustee, the Insurer
and all other Residual Certificateholders present and future;
(b) to hereby appoint the Sponsor as such Residual
Certificateholder's agent and attorney-in-fact to sign any federal income tax
information return filed on behalf of the Trust, if any, and agree that, if
requested by the Trust, it will sign such federal income tax information return
in its capacity as holder of an interest in the Trust. Each Residual
Certificateholder also hereby agrees that in its tax returns it will not take
any position inconsistent with those taken in any tax returns that may be filed
by the Trust;
(c) if such Residual Certificateholder is other than an individual
or other entity holding its Residual Certificate through a broker who reports
securities sales on Form 1099-B, to notify the Owner Trustee of any transfer by
it of a Residual Certificate in a taxable sale or exchange, within 30 days of
the date of the transfer; and
(d) until the completion of the events specified in Section 10.1(e),
not to, for any reason, institute proceedings for the Trust or the Sponsor to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against the Trust, or file a petition seeking or
consenting to reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the Sponsor or
the Trust or a substantial part of its property, or cause or permit the Sponsor
or the Trust to make any assignment for the benefit of its creditors, or admit
in writing its inability to pay its debts generally as they become due, or
declare or effect a moratorium on its debt or take any action in furtherance of
any such action.
Except as provided in Section 2.13, and notwithstanding any other
provision to the contrary in this Agreement, no Residual Certificateholder other
than the Sponsor in its capacity as the "Sponsor" shall be deemed to have
adopted, be bound by, or succeed in any way
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to any representation by, or duty of indemnification by or any other duty of,
the Sponsor, including those contained in Sections 2.10, 2.12, 3.5, 4.6, 9.2 or
elsewhere herein.
ARTICLE III
[Reserved]
ARTICLE IV
Ownership of Trust Property; Residual Certificates and Transfer of Interests
SECTION 4.1. Trust Property Ownership. Upon the formation of the
Trust by the contribution by the Sponsor pursuant to Section 2.5, the Owner
Trustee, contemporaneously therewith, having full power, authority, and
authorization to do so, has executed, authenticated, dated, issued, and
delivered, in the name and on behalf of the Trust, to the Sponsor, one (1) or
more Residual Certificates representing in the aggregate a 100% interest in the
Trust, and has registered such Residual Certificate(s) on the Certificate
Register in the name of the Sponsor. The Sponsor shall be the sole beneficiary
of the Trust. Such Residual Certificate(s) are duly authorized, validly issued,
and entitled to the benefits of this Agreement. For so long as the Sponsor shall
own such 100% interest in the Trust, the Sponsor shall be the sole beneficial
owner of the Trust. The Sponsor shall at all times keep and own a Residual
Certificate or Residual Certificates representing no less than 1% interest, and
at no time will the Sponsor sell or alienate its interest represented by
Residual Certificate(s) in such a way as to reduce its aggregate beneficial
ownership in the Residual Certificates to less than 1%.
SECTION 4.2. The Residual Certificates. Except for Residual
Certificates issued to the Sponsor, the Residual Certificates shall be issued in
denominations of $1,000 and integral multiples of $1,000 in excess thereof. The
Residual Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee. Residual
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be validly issued and entitled to the benefit of this
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Residual Certificates or did not hold such offices at the date of authentication
and delivery of such Residual Certificates. A transferee of a Residual
Certificate shall become a Residual Certificateholder and shall be entitled to
the rights and subject to the obligations of a Residual Certificateholder
hereunder, upon due registration of such Residual Certificate in such
transferee's name pursuant to Section 4.4.
SECTION 4.3. Authentication of Residual Certificates. Concurrently
with the initial sale of the Mortgage Loans to the Trust pursuant to the Sale
and Servicing Agreement, the Owner Trustee shall cause the Residual Certificates
to be executed on behalf of the Trust, authenticated and delivered to or upon
the written order of the Sponsor, signed by its chairman of the board, its
president or any vice president, its treasurer or any assistant treasurer
without further corporate action by the Sponsor, in authorized denominations. No
Residual Certificate shall entitle its holder to any benefit under this
Agreement, or shall be valid for any purpose,
9
unless there shall appear on such Residual Certificate a certificate of
authentication substantially in the form set forth in Exhibit B (with respect to
a Residual Certificate), executed by the Owner Trustee, by manual signature;
such authentication shall constitute conclusive evidence that such Residual
Certificate shall have been duly authenticated and delivered hereunder. All
Residual Certificates shall be dated the date of their authentication.
SECTION 4.4. Registration of Transfer and Exchange of Residual
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 4.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Residual Certificates and of
transfers and exchanges of Residual Certificates as herein provided. The Owner
Trustee shall be the initial Certificate Registrar.
In furtherance of and not in limitation of the foregoing, each
Residual Certificateholder, by acceptance of its Residual Certificate,
specifically acknowledges that it has no right to or interest in any monies at
any time held in the Reserve Fund prior to the release of such monies pursuant
to Section 8.7(c)(xv) of the Indenture, such monies being held in trust for the
benefit of the Noteholders and the Insurer. Notwithstanding the foregoing, in
the event that it is ever determined that the monies held in the Reserve Fund
constitute a pledge of collateral, then the provisions of the Sale and Servicing
Agreement shall be considered to constitute a security agreement and the Sponsor
and the Residual Certificateholders hereby grant to the Indenture Trustee and
the Insurer a first priority perfected security interest in such amounts. In
addition, each Residual Certificateholder, by acceptance of its Residual
Certificate, hereby appoints the Sponsor as its agent to pledge a first priority
perfected security interest in the Reserve Fund, and any amounts held therein
from time to time to the Indenture Trustee and the Insurer and agrees to execute
and deliver such instruments of conveyance, assignment, grant, confirmation,
etc., as well as any financing statements, in each case as the Insurer shall
consider reasonably necessary in order to perfect the Indenture Trustee's
security interest in the Mortgage Loans.
SECTION 4.5. Mutilated, Destroyed, Lost or Stolen Residual
Certificates. If (a) any mutilated Residual Certificate shall be surrendered to
the Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Residual
Certificate and (b) there shall be delivered to the Certificate Registrar, the
Owner Trustee and the Insurer such security or indemnity as may be required by
them to save each of them harmless, then in the absence of notice that such
Residual Certificate shall have been acquired by a bona fide purchaser, the
Owner Trustee on behalf of the Trust shall execute and the Owner Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Residual Certificate, a new Residual Certificate,
respectively, of like class, tenor and denomination. In connection with the
issuance of any new Residual Certificate under this Section, the Owner Trustee
or the Certificate Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Residual Certificate issued pursuant to this Section
shall constitute conclusive evidence of an ownership interest in the Trust, as
if originally issued, whether or not the lost, stolen or destroyed Residual
Certificate shall be found at any time.
10
SECTION 4.6. Persons Deemed Residual Certificateholders. Every
Person by virtue of becoming a Residual Certificateholder in accordance with
this Agreement and the rules and regulations of the Certificate Registrar shall
be deemed to be bound by the terms of this Agreement. Prior to due presentation
of a Residual Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar and the Insurer and any agent of the Owner Trustee, the
Certificate Registrar and the Insurer, may treat the Person in whose name any
Residual Certificate shall be registered in the Certificate Register as the
owner of such Residual Certificate for the purpose of receiving distributions
pursuant to the Sale and Servicing Agreement and the Indenture and for all other
purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar or
the Insurer nor any agent of the Owner Trustee, the Certificate Registrar or the
Insurer shall be bound by any notice to the contrary.
SECTION 4.7. Access to List of Residual Certificateholders' Names
and Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, the Sponsor or the Insurer, within 15 days after receipt by the Owner
Trustee of a request therefor from such Person in writing, a list, of the names
and addresses of the Residual Certificateholders as of the most recent Record
Date. If three or more Holders of Residual Certificates or one or more Holders
of Residual Certificates evidencing not less than 25% by Percentage Interest
apply in writing to the Owner Trustee, and such application states that the
applicants desire to communicate with other Residual Certificateholders with
respect to their rights under this Agreement or under the Residual Certificates
and such application is accompanied by a copy of the communication that such
applicants propose to transmit, then the Owner Trustee shall, within five
Business Days after the receipt of such application, afford such applicants
access during normal business hours to the current list of Residual
Certificateholders. Each Holder, by receiving and holding a Residual
Certificate, shall be deemed to have agreed not to hold any of the Sponsor, the
Servicer, the Owner Trustee or the Insurer or any agent thereof accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
SECTION 4.8. Maintenance of Office or Agency. The Owner Trustee
shall maintain in [City, State] an office or offices or agency or agencies where
Residual Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Residual Certificates and the Basic Documents may be served. The Owner
Trustee initially designates its Corporate Trust Office for such purposes. The
Owner Trustee shall give prompt written notice to the Sponsor, the Residual
Certificateholders and the Insurer of any change in the location of the
Certificate Register or any such office or agency.
SECTION 4.9. ERISA Restrictions. The Residual Certificates may not
be acquired by or for the account of (i) an employee benefit plan (as defined in
Section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA,
(ii) a plan described in Section 4975(e)(1) of the Code, or (iii) any entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (each, a "Benefit Plan"). By accepting and holding its beneficial
ownership interest in its Residual Certificate, the Holder thereof shall be
deemed to have represented and warranted that it is not a Benefit Plan.
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SECTION 4.10. Restrictions on Transfer of Residual Certificates.
(a) The Residual Certificates shall be assigned, transferred,
exchanged, pledged, financed, hypothecated or otherwise conveyed (collectively,
for purposes of this Section 4.10 and any other Section referring to the
Residual Certificates, "transferred" or a "transfer") only in accordance with
this Section 4.10.
(b) No transfer of a Residual Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. Except for the initial issuance of the
Residual Certificate to the Sponsor, the Indenture Trustee shall require (i) the
transferee to execute an investment letter acceptable to and in form and
substance satisfactory to the Indenture Trustee and the Insurer certifying to
the Indenture Trustee and the Insurer the facts surrounding such transfer, which
investment letter shall not be an expense of the Indenture Trustee or the
Insurer or (ii) if the investment letter is not delivered, a written Opinion of
Counsel acceptable to and in form and substance satisfactory to the Indenture
Trustee, the Insurer and the Sponsor that such transfer may be made pursuant to
an exemption, describing the applicable exemption and the basis therefor from
said Act or is being made pursuant to said Act, which Opinion of Counsel shall
not be an expense of the Indenture Trustee, the Insurer or the Sponsor. The
Holder of a Residual Certificate desiring to effect such transfer shall, and
does hereby agree to, indemnify the Sponsor and the Insurer against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
(c) The Residual Certificate and any interests therein shall not be
transferred except upon satisfaction of the following conditions precedent: (i)
the Person that acquires a Residual Certificate shall (A) be organized and
existing under the laws of the United States of America or any state thereof or
the District of Columbia; (B) expressly assume, by an agreement supplemental
hereto, executed and delivered to the Indenture Trustee and the Insurer, the
performance of every covenant and obligation of the Sponsor hereunder and (C) as
part of its acquisition of a Residual Certificate, acquire all rights of the
Sponsor or any transferee under this Section 4.10(c) to amounts payable to such
Sponsor or such transferee under Section 8.7(c)(xv) of the Indenture (with
respect to the Residual Certificate) (ii) the Holder of the Residual
Certificates shall deliver to the Indenture Trustee and the Insurer an Officer's
Certificate stating that such transfer and such supplemental agreement comply
with this Section 4.10(c) and that all conditions precedent provided by this
Section 4.10(c) have been complied with and an Opinion of Counsel stating that
all conditions precedent provided by this Section 4.10(c) have been complied
with, and the Indenture Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the matters set
forth therein and shall incur no liability in so relying; (iii) the Holder of
the Residual Certificates shall deliver to the Indenture Trustee and the Insurer
a letter from each Rating Agency confirming that its rating of the Notes, after
giving effect to such transfer, will not be reduced or withdrawn without regard
to the Policy; (iv) the transferee of the Residual Certificates shall deliver to
the Indenture Trustee and the Insurer an Opinion of Counsel to the effect that
(a) such transfer will not adversely affect the treatment of the Notes after
such transfer as debt for federal and applicable state income tax purposes, (b)
such transfer will not result in the Trust being subject to tax at the entity
level for federal or applicable state tax purposes, (c) such transfer will not
have any material adverse impact on the federal or applicable state income
taxation of a Noteholder or any Residual
12
Certificateholder and (d) such transfer will not result in the arrangement
created by this Agreement or any "portion" of the Trust, being treated as a
taxable mortgage pool as defined in Section 7701(i) of the Code; (v) all filings
and other actions necessary to continue the perfection of the interest of the
Trust in the Mortgage Loans and the other property conveyed hereunder shall have
been taken or made and (vi) the Insurer shall have consented to such transfer.
Notwithstanding the foregoing, the requirement set forth in subclause (i)(A) of
this Section 4.10(c) shall not apply in the event the Indenture Trustee shall
have received a letter from each Rating Agency confirming that its rating of the
Notes, after giving effect to a proposed transfer to a Person that does not meet
the requirement set forth in subclause (i)(A), shall not be reduced or withdrawn
without regard to the Policy. Notwithstanding the foregoing, the requirements
set forth in this paragraph (c) shall not apply to the initial issuance of the
Residual Certificates to the Sponsor.
Except for the initial issuance of the Residual Certificate to the
Sponsor, no transfer of a Residual Certificate shall be made unless the
Indenture Trustee and the Insurer shall have received a representation letter
from the transferee of such Residual Certificate, acceptable to and in form and
substance satisfactory to the Indenture Trustee and the Insurer to the effect
that such transferee is not a Benefit Plan, nor a Person acting on behalf of or
using the assets of a Benefit Plan, which representation letter shall not be an
expense of the Indenture Trustee or the Insurer.
(d) No transfer or pledge of the Residual Certificates shall result
in more than 98 other holders of Residual Certificates.
SECTION 4.11. Acceptance of Obligations. The Sponsor, by its
acceptance of the Residual Certificates, agrees to be bound by and to perform
all the duties of the Sponsor set forth in this Agreement.
SECTION 4.12. Distributions on Residual Certificates. The Holders of
the Residual Certificates will be entitled to distributions on each Payment
Date, as provided in the Sale and Servicing Agreement and the Indenture.
ARTICLE V
Voting Rights and Other Actions
SECTION 5.1. Prior Notice to Holders with Respect to Certain
Matters. With respect to the following matters, the Owner Trustee shall not take
action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Residual Certificateholders and the Insurer in
writing of the proposed action and the Residual Certificateholders and the
Insurer shall not have notified the Owner Trustee in writing prior to the 30th
day after such notice is given that such Residual Certificateholders or the
Insurer have withheld consent or provided alternative direction:
(a) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Business Trust Statute or unless such amendment would not materially and
adversely affect the interests of the Holders);
13
(b) the amendment of the Indenture by a supplemental Indenture in
circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental Indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Residual
Certificateholders; or
(d) except pursuant to Section 9.01 of the Sale and Servicing
Agreement, the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially adversely affect the interests
of the Residual Certificateholders.
The Owner Trustee shall notify the Residual Certificateholders in writing of any
appointment of a successor Security Registrar, or Certificate Registrar within
five Business Days thereof.
SECTION 5.2. Action by Residual Certificateholders with Respect to
Certain Matters.
(a) Upon the written request from time to time of Residual
Certificateholder(s) evidencing not less than 51% by Percentage Interest and
subject to the prior review by the Insurer, the Owner Trustee shall take
appropriate actions to remove Mortgage Loans from any Pool pursuant to Section
2.07 of the Sale and Servicing Agreement. The Owner Trustee shall notify the
Insurer of any such proposed removal. The Owner Trustee will take such actions
with respect to removal of Mortgage Loans as may from time to time be proposed
by the Residual Certificateholders pursuant to Sections 5.2(b) and 5.5.
(b) Upon the written request of any Residual Certificateholder (a
"Proposer"), the Owner Trustee shall distribute promptly to all Residual
Certificateholders any request for action or consent of Residual
Certificateholders submitted by such Proposer, with a copy to the Manager. The
Owner Trustee shall provide a reasonable method for collecting responses to such
request and shall tabulate and report the results thereof to the Residual
Certificateholders and the Manager. The Owner Trustee shall have no
responsibility or duty to determine if any such proposed action or consent is
permitted under the terms of this Agreement or applicable law.
SECTION 5.3. Action with Respect to Bankruptcy. Until one year and
one day following the day on which the Notes have been paid in full, the Owner
Trustee shall not have the power to, and shall not, commence any proceeding or
other actions contemplated by Section 2.12(b) relating to the Trust without the
prior written consent of the Insurer. Until one year and one day following the
day on which the Notes have been paid in full, all amounts due to the Insurer
under the Insurance Agreement have been paid in full, the Policy has terminated
and the Indenture Trustee has surrendered the Policy to the Insurer, the Owner
Trustee shall not have the power to, and shall not, commence any proceeding or
other actions contemplated by Section 2.12(b) relating to the Trust without the
prior written consent of all of the Residual Certificateholders and the Insurer,
and the delivery to the Owner Trustee by each such Residual Certificateholder
and the Insurer, of a certificate certifying that such Residual
Certificateholder reasonably believes that the Trust is insolvent.
14
SECTION 5.4. Restrictions on Residual Certificateholders' Power.
(a) Neither the Residual Certificateholders nor the Insurer shall
direct the Owner Trustee to take or refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the Owner
Trustee under this Agreement or any of the Basic Documents or would be contrary
to Section 2.3 or otherwise contrary to law nor shall the Owner Trustee be
obligated to follow any such direction, if given.
(b) Neither the Insurer nor any Residual Certificateholder (other
than the Sponsor as sole Residual Certificateholder) shall have any right by
virtue or by availing itself of any provisions of this Agreement to institute
any suit, action, or proceeding in equity or at law upon or under or with
respect to this Agreement or any Basic Document, unless such party is the
Instructing Party pursuant to Section 7.3 and unless such party previously shall
have given to the Owner Trustee a written notice of default and of the
continuance thereof, as provided in this Agreement, and also unless Residual
Certificateholders evidencing not less than 25% by Percentage Interest or the
Insurer shall have made written request upon the Owner Trustee to institute such
action, suit or proceeding in its own name as Owner Trustee under this Agreement
and shall have offered to the Owner Trustee such reasonable indemnity as it may
require against the costs, expenses and liabilities to be incurred therein or
thereby, and the Owner Trustee, for 30 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, and during such 30-day period no request
or waiver inconsistent with such written request has been given to the Owner
Trustee pursuant to and in compliance with this Section or Section 7.3; it being
understood and intended, and being expressly covenanted by each Residual
Certificateholder with every other Residual Certificateholder, the Owner Trustee
or the Insurer, that no Insurer or one or more Holders of Residual Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb, or prejudice
the rights of the Holders of any other of the Residual Certificates, or to
obtain or seek to obtain priority over or preference to any other such Holder,
or to enforce any right under this Agreement, except in the manner provided in
this Agreement and for the equal, ratable, and common benefit of all Residual
Certificateholders and the Insurer. For the protection and enforcement of the
provisions of this Section 5.4, each and every Residual Certificateholder, the
Owner Trustee and the Insurer shall be entitled to such relief as can be given
either at law or in equity.
SECTION 5.5. Majority Control. No Residual Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust except as expressly provided in this Agreement. Except
as expressly provided herein, any action that may be taken by the Residual
Certificateholders under this Agreement may be taken by the Holders of Residual
Certificates evidencing not less than a 51% by Percentage Interest of such
class. Except as expressly provided herein, any written notice of the Residual
Certificateholders delivered pursuant to this Agreement shall be effective if
signed by Residual Certificateholders evidencing not less than a 51% Percentage
Interest in such Class at the time of the delivery of such notice.
SECTION 5.6. Rights of the Insurer. Notwithstanding anything to the
contrary in the Basic Documents, without the prior written consent of the
Insurer, the Owner Trustee shall not (i) remove the Servicer, (ii) initiate any
claim, suit or proceeding by the Trust or compromise
15
any claim, suit or proceeding brought by or against the Trust, other than with
respect to the enforcement of any Mortgage Loan or any rights of the Trust
thereunder, (iii) authorize the merger or consolidation of the Trust with or
into any other business trust or other entity, (iv) amend the Certificate of
Trust or (v) amend this Agreement in accordance with Section 12.1 of this
Agreement.
ARTICLE VI
Certain Duties
SECTION 6.1. Accounting and Records to the Noteholders, Residual
Certificateholders, the Internal Revenue Service and Others. Subject to Sections
8.01(b)(iii) and 8.01(c) of the Sale and Servicing Agreement, the Sponsor shall
(a) maintain (or cause to be maintained) the books of the Trust on a calendar
year basis on the accrual method of accounting, including, without limitation,
the allocations of net income under Section 2.11 hereof, (b) deliver (or cause
to be delivered) to each Residual Certificateholder, as may be required by the
Code and applicable Treasury Regulations, such information as may be required
(including Schedule K-1, if applicable) to enable each Residual
Certificateholder to prepare its Federal and state income tax returns, (c) file
or cause to be filed, if necessary, such tax returns relating to the Trust
(including a partnership information return, Form 1065), and direct the Owner
Trustee or the Servicer, as the case may be, to make such elections as may from
time to time be required or appropriate under any applicable state or Federal
statute or rule or regulation thereunder so as to maintain the Trust's
characterization as a branch, or if applicable, as a partnership, for Federal
income tax purposes and (d) collect or cause to be collected any withholding tax
as described in and in accordance with Section 8.01(b)(ii) of the Sale and
Servicing Agreement with respect to income or distributions to Residual
Certificateholders and the appropriate forms relating thereto. The Owner Trustee
or the Servicer, as the case may be, shall make all elections pursuant to this
Section as directed in writing by the Sponsor. The Owner Trustee shall sign all
tax information returns, if any, filed pursuant to this Section 6.1 and any
other returns as may be required by law, and in doing so shall rely entirely
upon, and shall have no liability for information provided by, or calculations
provided by, the Sponsor or the Servicer. The Sponsor will direct the Owner
Trustee and the Owner Trustee shall elect under Section 1278 of the Code to
include in income currently any market discount that accrues with respect to the
Mortgage Loans. The Sponsor shall not direct the Owner Trustee to make, and the
Owner Trustee shall not make, the election provided under Section 754 of the
Code.
SECTION 6.2. Signature on Returns; Tax Matters Partner.
(a) Notwithstanding the provisions of Section 6.1 and in the event
that the Trust is characterized as a partnership, the Owner Trustee shall sign
on behalf of the Trust the tax returns of the Trust, unless applicable law
requires a Residual Certificateholder to sign such documents, in which case such
documents shall be signed by the Sponsor.
(b) In the event that the Trust is characterized as a partnership,
the Sponsor shall be the "tax matters partner" of the Trust pursuant to the
Code.
16
SECTION 6.3. Underwriting Agreement. The Servicer is hereby
authorized to execute and deliver the Underwriting Agreement with respect to the
Notes.
ARTICLE VII
Authority and Duties of Owner Trustee
SECTION 7.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is named
as a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is named as a party and
any amendment thereto, in each case, in such form as the Sponsor shall approve
as evidenced conclusively by the Owner Trustee's execution thereof, and on
behalf of the Trust, to direct the Indenture Trustee to authenticate and deliver
Class A-1 Notes in the aggregate principal amount of $__________ and Class A-2
Notes in the aggregate principal amount of $__________. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, to take
all actions required of the Trust pursuant to the Basic Documents. The Owner
Trustee is further authorized from time to time to take such action as the
Instructing Party recommends with respect to the Basic Documents so long as such
activities are consistent with the terms of the Basic Documents. The Owner
Trustee may rely on the Manager to carry out any action that the Owner Trustee
is authorized or directed to perform hereunder, to the extent permitted by the
Management Agreement.
SECTION 7.2. General Duties. It shall be the duty of the Owner
Trustee to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and to administer the Trust in the
interest of the Holders, subject to the Basic Documents and in accordance with
the provisions of this Agreement. Notwithstanding the foregoing, the Owner
Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Basic Documents to the extent the Servicer has agreed in
the Sale and Servicing Agreement to perform any act or to discharge any duty of
the Trust or the Owner Trustee hereunder or under any Basic Document, and the
Owner Trustee shall not be liable for the default or failure of the Servicer to
carry out its obligations under the Sale and Servicing Agreement or the failure
of the Manager to carry out its obligations under the Management Agreement.
SECTION 7.3. Action upon Instruction.
(a) Subject to Article V, the Insurer (the "Instructing Party")
shall have the exclusive right to direct the actions of the Owner Trustee in the
management of the Trust, so long as such instructions are not inconsistent with
the express terms set forth herein or in any Basic Document. The Instructing
Party shall not instruct the Owner Trustee in a manner inconsistent with this
Agreement or the Basic Documents. In acting in accordance with the direction of
the Insurer pursuant to this Section or pursuant to Article V, the Owner Trustee
shall not be deemed to (i) owe any fiduciary obligation to the Insurer or (ii)
have violated any fiduciary responsibility to the Residual Certificateholders.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have
17
been advised by counsel, that such action is likely to result in liability on
the part of the Owner Trustee or is contrary to the terms hereof or of any Basic
Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any instruction of the Instructing Party received, the Owner Trustee shall
not be liable on account of such action to any Person. If the Owner Trustee
shall not have received appropriate instruction within ten days of such notice
(or within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be under
no duty to, notwithstanding any other provision of this Agreement, take or
refrain from taking such action, not inconsistent with this Agreement or the
Basic Documents, as it shall deem to be in the best interests of the Residual
Certificateholders and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Instructing
Party requesting instruction and, notwithstanding any other provision of this
Agreement, to the extent that the Owner Trustee acts or refrains from acting in
good faith in accordance with any such instruction received, the Owner Trustee
shall not be liable, on account of such action or inaction, to any Person. If
the Owner Trustee shall not have received appropriate instruction within 10 days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Basic Documents, as it shall deem to be
in the best interests of the Residual Certificateholders, and shall have no
liability to any Person for such action or inaction.
SECTION 7.4. No Duties Except as Specified in this Agreement or in
Instructions. The Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 7.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on
18
any part of the Owner Trust Estate that result from actions by, or claims
against, the Owner Trustee (solely in its individual capacity) and that are not
related to the ownership or the administration of the Owner Trust Estate.
SECTION 7.5. No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 7.3.
SECTION 7.6. Restrictions. The Owner Trustee shall not take any
action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation or a publicly traded
partnership for Federal income tax purposes. The Residual Certificateholders
shall not direct the Owner Trustee to take action that would violate the
provisions of this Section.
ARTICLE VIII
Concerning the Owner Trustee
SECTION 8.1. Acceptance of Trust and Duties. The Owner Trustee
accepts the trust hereby created and agrees to perform its duties hereunder with
respect to such trust but only upon the terms of this Agreement. The Owner
Trustee also agrees to disburse all monies actually received by it constituting
part of the Owner Trust Estate upon the terms of the Basic Documents and this
Agreement. The Owner Trustee shall not be answerable or accountable hereunder or
under any Basic Document under any circumstances, except (i) for its own willful
misconduct, bad faith or negligence, (ii) in the case of the inaccuracy of any
representation or warranty contained in Section 8.3 expressly made by the Owner
Trustee in its individual capacity, (iii) for liabilities arising from the
failure of the Owner Trustee to perform obligations expressly undertaken by it
in the last sentence of Section 7.4 hereof, or (iv) for taxes, fees or other
charges on, based on or measured by, any fees, commissions or compensation
received by the Owner Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment,
not constituting negligence, made by a Responsible Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it if such action or omission is in accordance
with the instructions of the Instructing Party, the Sponsor, the Servicer or any
Residual Certificateholder pursuant to the terms hereof;
(c) or risk funds or otherwise incur any financial liability in the
performance of any of its rights or powers hereunder or under any Basic Document
if the Owner Trustee shall
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have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;
(d) by or arising under any of the Basic Documents, including the
principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of
the validity or sufficiency of this Agreement or for the due execution hereof by
the Sponsor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate or for or in respect of the validity
or sufficiency of the Basic Documents, other than the certificates of
authentication on the Notes and the Residual Certificates, and the Owner Trustee
shall in no event assume or incur any liability, duty or obligation to the
Sponsor, the Insurer, the Indenture Trustee or any Residual Certificateholder,
other than as expressly provided for herein and in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Sponsor, the Insurer, the Indenture Trustee, or the Servicer
under any of the Basic Documents or otherwise and the Owner Trustee shall have
no obligation or liability to perform the obligations under this Agreement or
the Basic Documents that are required to be performed by the Sponsor under this
Agreement, by the Indenture Trustee under the Indenture or the Servicer under
the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Agreement, or to institute, conduct
or defend any litigation under this Agreement or otherwise or in relation to
this Agreement or any Basic Document, at the request, order or direction of the
Instructing Party or any of the Residual Certificateholders, unless such
Instructing Party or Residual Certificateholders have offered to the Owner
Trustee security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its gross negligence, bad
faith or willful misconduct in the performance of any such act.
SECTION 8.2. Furnishing of Documents. The Owner Trustee shall
furnish to the Residual Certificateholders promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments furnished
to the Owner Trustee under the Basic Documents.
SECTION 8.3. Representations and Warranties. The Owner Trustee
hereby represents and warrants, in its individual capacity, to the Sponsor and
the Holders that:
(a) It is a Delaware banking corporation, duly organized and validly
existing in good standing under the laws of the State of Delaware. It has all
requisite corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
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(c) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene any
federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
SECTION 8.4. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in acting
upon any signature, instrument, notice, resolution, request, consent, order,
certificate, report, opinion, bond or other document or paper believed by it to
be genuine and believed by it to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer, secretary or other authorized officers of the
relevant party, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and (ii) may
consult with counsel, accountants and other skilled persons to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
opinion or advice of any such counsel, accountants or other such persons and
according to such opinion not contrary to this Agreement or any Basic Document.
SECTION 8.5. Not Acting in Individual Capacity. Except as provided
in this Article VII, in accepting the trusts hereby created [Owner Trustee] acts
solely as Owner Trustee hereunder and not in its individual capacity and all
Persons having any claim against the Owner Trustee by reason of the transactions
contemplated by this Agreement or any Basic Document shall look only to the
Owner Trust Estate for payment or satisfaction thereof.
SECTION 8.6. Owner Trustee Not Liable for Notes, Residual
Certificates or Mortgage Loans. The recitals contained herein and in the Notes
and, the Residual Certificates (other than the signature and countersignature of
the Owner Trustee on the Notes and the Residual Certificates, respectively),
shall be taken as the statements of the Sponsor and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Basic Document, of the Notes (other than the signature and countersignature of
the Owner Trustee on the Notes) or of the Residual Certificates (other than the
signature and countersignature of the Owner Trustee on the Residual
Certificates) or of any Mortgage Loan or related documents. The Owner Trustee
shall at no time have any responsibility or liability for or with respect to the
legality, validity and
21
enforceability of any Mortgage Loan, or the perfection and priority of any
security interest created by any Mortgage Loan or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Owner
Trust Estate or its ability to generate the payments to be distributed to
Residual Certificateholders under this Agreement or the Noteholders under the
Indenture, including, without limitation: the existence, condition and ownership
of any Mortgage Loan; the existence and enforceability of any insurance thereon;
the existence and contents of any Mortgage Loan on any computer or other record
thereof; the validity of the assignment of any Mortgage Loan to the Trust or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan; the compliance by the Sponsor,
the Servicer or any other Person with any warranty or representation made under
any Basic Document or in any related document or the accuracy of any such
warranty or representation or any action of the Indenture Trustee or the
Servicer or any subservicer taken in the name of the Owner Trustee.
SECTION 8.7. Owner Trustee May Own Notes and Residual Certificates.
The Owner Trustee in its individual or any other capacity may become the owner
or pledgee of Notes or Residual Certificates and may deal with the Sponsor, the
Indenture Trustee and the Servicer in banking transactions with the same rights
as it would have if it were not Owner Trustee.
SECTION 8.8. Payments from Owner Trust Estate. All payments to be
made by the Owner Trustee under this Agreement or any of the Basic Documents to
which the Trust or the Owner Trustee is a party shall be made only from the
income and proceeds of the Owner Trust Estate and only to the extent that the
Owner Trust shall have received income or proceeds from the Owner Trust Estate
to make such payments in accordance with the terms hereof. [Owner Trustee], or
any successor thereto, in its individual capacity, shall not be liable for any
amounts payable under this Agreement or any of the Basic Documents to which the
Trust or the Owner Trustee is a party.
SECTION 8.9. Doing Business in Other Jurisdictions. Notwithstanding
anything contained to the contrary, neither [Owner Trustee] or any successor
thereto, nor the Owner Trustee shall be required to take any action in any
jurisdiction other than in the State of Delaware if the taking of such action
will, even after the appointment of a co-trustee or separate trustee in
accordance with Section 11.5 hereof, (i) require the consent or approval or
authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental
authority or agency of any jurisdiction other than the State of Delaware; (ii)
result in any fee, tax or other governmental charge under the laws of the State
of Delaware becoming payable by [Owner Trustee] (or any successor thereto); or
(iii) subject [Owner Trustee] (or any successor thereto) to personal
jurisdiction in any jurisdiction other than the State of Delaware for causes of
action arising from acts unrelated to the consummation of the transactions by
[Owner Trustee] (or any successor thereto) or the Owner Trustee, as the case may
be, contemplated hereby.
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ARTICLE IX
Compensation of Owner Trustee
SECTION 9.1. Owner Trustee's Fees and Expenses. The Owner Trustee
shall receive as compensation for its services hereunder the Owner Trustee Fees,
and the Owner Trustee shall be entitled to be reimbursed by the Sponsor for its
other reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may employ in connection with the exercise and performance
of its rights and its duties hereunder and under the Basic Documents.
SECTION 9.2. Indemnification. The Sponsor shall be liable as primary
obligor for, and shall indemnify the Owner Trustee (in its individual and trust
capacities) and its officers, directors, successors, assigns, agents and
servants (collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may (in its trust or individual capacities) at any time be
imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Basic Documents, the Owner Trust Estate, the administration of the Owner Trust
Estate or the action or inaction of the Owner Trustee hereunder, except only
that the Sponsor shall not be liable for or required to indemnify the Owner
Trustee from and against Expenses arising or resulting from any of the matters
described in the third sentence of Section 8.1. The indemnities contained in
this Section and the rights under Section 9.1 shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's choice of legal counsel shall be
subject to the approval of the Sponsor which approval shall not be unreasonably
withheld.
SECTION 9.3. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article IX shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
SECTION 9.4. Non-recourse Obligations. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its individual
capacity and in its capacity as Owner Trustee for the Trust that all obligations
of the Trust to the Owner Trustee individually or as Owner Trustee for the Trust
shall be recourse to the Owner Trust Estate only and specifically shall not be
recourse to the assets of any Residual Certificateholder.
ARTICLE X
Termination of Trust Agreement
SECTION 10.1. Termination of Trust Agreement.
(a) This Agreement and the Trust shall terminate and be of no
further force or effect upon the later of (i) the maturity or other liquidation
of the last Mortgage Loan (including
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the redemption by the Sponsor at its option of the Notes as described in Section
7.01(b) of the Sale and Servicing Agreement) and the subsequent distribution of
amounts in respect of such Mortgage Loans as provided in the Basic Documents or
(ii) the payment to Residual Certificateholders of all amounts required to be
paid to them pursuant to this Agreement and the payment to the Insurer of all
amounts payable or reimbursable to it pursuant to the Sale and Servicing
Agreement, the Indenture and the Insurance Agreement; provided, however, that
the rights to indemnification under Section 9.2 and the rights under Section 9.1
shall survive the termination of the Trust. The Servicer shall promptly notify
the Owner Trustee and the Insurer of any prospective termination pursuant to
this Section 10.1. The bankruptcy, liquidation, dissolution, death or incapacity
of any Residual Certificateholder shall not (x) operate to terminate this
Agreement or the Trust, nor (y) entitle such Residual 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 all or any part of the
Trust or Owner Trust Estate nor (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in clause (a), neither the Sponsor nor any
other Residual Certificateholder shall be entitled to revoke or terminate the
Trust.
(c) Notice of any termination of the Trust, specifying the Payment
Date upon which the Residual Certificateholders shall surrender their Residual
Certificates to the Indenture Trustee for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to the Residual
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 7.01(c) of the Sale and
Servicing Agreement, stating (i) the Payment Date upon or with respect to which
final payment of the Residual Certificates, as the case may be, shall be made
upon presentation and surrender of the Residual Certificates, as the case may
be, at the office of the Indenture Trustee therein designated, (ii) the amount
of any such final payment and (iii) that the Record Date otherwise applicable to
such Payment Date is not applicable, payments being made only upon presentation
and surrender of the Residual Certificates, as the case may be, at the office of
the Indenture Trustee therein specified. The Owner Trustee shall give such
notice to the Certificate Registrar (if other than the Owner Trustee) and the
Indenture Trustee at the time such notice is given to the Residual
Certificateholders. Upon presentation and surrender of the Residual
Certificates, as the case may be, the Indenture Trustee shall cause to be
distributed to the Residual Certificateholders amounts distributable on such
Payment Date pursuant to Section 8.7(c)(xv) of the Indenture.
In the event that all of the Residual Certificateholders shall not
surrender their Residual Certificates for cancellation within six months after
the date specified in the above-mentioned written notice, the Owner Trustee
shall give a second written notice to the remaining Residual Certificateholders
to surrender their Residual Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Residual Certificates shall not have been surrendered for cancellation,
the Owner Trustee may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Residual Certificateholders
concerning surrender of their Residual Certificates, and the cost thereof shall
be paid out of the funds and other assets that shall remain subject to this
Agreement. Any funds remaining in the Trust after exhaustion of such remedies
shall be distributed, subject to applicable escheat laws, by the Owner Trustee
to the Sponsor and Holders shall look solely to the Sponsor for payment.
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(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Sponsor.
(e) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE XI
Successor Owner Trustees and Additional Owner Trustees
SECTION 11.1. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation (i) satisfying the provisions of
Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal or State
authorities; (iv) having (or having a parent which has) a rating of at least A3
by Moody's or A-1 by Standard & Poor's; and (v) acceptable to the Insurer in its
sole discretion. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Owner Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 11.2.
SECTION 11.2. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving written notice thereof to the Sponsor (or in the event that the
Sponsor is not the sole Residual Certificateholder, the Holders of Residual
Certificates evidencing not less than a majority in interest in the Trust), the
Insurer and the Servicer. Upon receiving such notice of resignation, the Sponsor
shall promptly appoint a successor Owner Trustee, meeting the qualifications set
forth in Section 11.1 herein, by written instrument, one copy of which
instrument shall be delivered to the resigning Owner Trustee and with additional
copies to the successor Owner Trustee and the Insurer provided that the Sponsor
shall have received written confirmation from each of the Rating Agencies that
the proposed appointment will not result in an increased capital charge to the
Insurer by either of the Rating Agencies. If no successor Owner Trustee shall
have been so appointed and have accepted appointment within 30 days after the
giving of such notice of resignation, the resigning Owner Trustee or the Insurer
may petition any court of competent jurisdiction for the appointment of a
successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 11.1 and shall fail to resign after
written request therefor by the Sponsor, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the
25
purpose of rehabilitation, conservation or liquidation, then the Residual
Certificateholder with the consent of the Insurer may remove the Owner Trustee.
If the Residual Certificateholder shall remove the Owner Trustee under the
authority of the immediately preceding sentence, the Sponsor shall promptly
appoint a successor Owner Trustee, meeting the qualifications set forth in
Section 11.1 herein, by written instrument, in duplicate, one copy of which
instrument shall be delivered to the outgoing Owner Trustee so removed, one copy
to the Insurer and one copy to the successor Owner Trustee and the Sponsor shall
pay all fees owed to the outgoing Owner Trustee, if not previously paid by the
Trust.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 11.3 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Sponsor shall provide notice of such resignation
or removal of the Owner Trustee to each of the Rating Agencies.
Notwithstanding any other provision of this Agreement, and in
addition to any other method of removal of the Owner Trustee contained herein,
upon a proposal made pursuant to Section 5.2(b) and the subsequent consent of
Residual Certificateholders representing no less than a 66-2/3% Percentage
Interest of the Residual Certificates in the Trust, the Owner Trustee may be
removed as Owner Trustee, subject to the consent of the Insurer, which consent
is not to be unreasonably withheld. In the event the Owner Trustee is removed
pursuant to this paragraph, the provisions of this Agreement, including Article
X herein, shall apply as if the Owner Trustee had resigned hereunder.
SECTION 11.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 11.2 shall execute, acknowledge and deliver to the
Sponsor, the Servicer and the Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
monies held by it under this Agreement; and the Sponsor and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties and
obligations.
No successor Owner Trustee shall accept appointment as provided in
this Section unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 11.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section, the Servicer shall mail notice of the successor of such Owner
Trustee to all Residual Certificateholders, the Indenture Trustee, the
Noteholders and the Rating Agencies. If the Servicer shall fail to mail such
notice within 10 days after acceptance of appointment by the
26
successor Owner Trustee, the successor Owner Trustee shall cause such notice to
be mailed at the expense of the Servicer.
SECTION 11.4. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 11.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
SECTION 11.5. Appointment of Co-Owner Trustee or Separate Owner
Trustee. Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Owner Trust Estate or any Mortgaged Property may at the time be
located, the Servicer and the Owner Trustee acting jointly shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee and the Insurer to act as co-trustee, jointly with
the Owner Trustee, or separate trustee or separate trustees, of all or any part
of the Owner Trust Estate, and to vest in such Person, in such capacity, such
title to the Trust, or any part thereof, and, subject to the other provisions of
this Section, such powers, duties, obligations, rights and trusts as the
Servicer and the Owner Trustee may consider necessary or desirable. If the
Servicer shall not have joined in such appointment within 15 days after the
receipt by it of a request so to do, the Owner Trustee subject to the approval
of the Insurer (which approval shall not be unreasonably withheld) shall have
the power to make such appointment. No co-trustee or separate trustee under this
Agreement shall be required to meet the terms of eligibility as a successor
trustee pursuant to Section 11.1 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 11.3.
Each separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate trustee or co-trustee jointly (it
being understood that such separate trustee or co-trustee is not
authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Agreement;
and
27
(iii) the Servicer and the Owner Trustee acting jointly may at any
time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner 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. 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 Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer and the Insurer.
Any separate trustee or co-trustee may at any time appoint the Owner
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
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XII
Miscellaneous
SECTION 12.1. Supplements and Amendments.
(a) This Agreement may be amended by the Sponsor and the Owner
Trustee, with the prior written consent of the Insurer and with prior written
notice to the Rating Agencies, without the consent of any of the Noteholders or,
in the event that the Sponsor is not the sole Residual Certificateholder, the
Residual Certificateholders, (i) to cure any ambiguity or defect or (ii) to
correct, supplement or modify any provisions in this Agreement; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel which
may be based upon a certificate of the Servicer, adversely affect in any
material respect the interests of any Noteholder or Residual Certificateholder.
(b) This Agreement may also be amended from time to time, with the
prior written consent of the Insurer, by the Sponsor and the Owner Trustee, with
prior written notice to the Rating Agencies, and, to the extent such amendment
materially and adversely affects the interests of the Noteholders, with the
consent of the Noteholders evidencing not less than a majority of the
Outstanding Amount of the Notes and, the consent of the Residual
Certificateholders evidencing not less than a majority interest in the Trust
(which consent of any Holder of a Note or Residual Certificate given pursuant to
this Section or pursuant to any other provision of this Agreement shall be
conclusive and binding on such Holder and on all future Holders of such Note or
Residual Certificate and of any Note or Residual Certificate issued upon the
transfer thereof or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Note or Residual Certificate) for the
purpose of adding any provisions
28
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Noteholders or the
Residual Certificateholders; provided, however, that, subject to the express
rights of the Insurer under the Basic Documents, no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on Mortgage Loans or distributions that shall
be required to be made for the benefit of the Noteholders, or the Residual
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes and the Residual Certificate, the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Notes and Holders of all outstanding Residual Certificates.
Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Residual Certificateholder, the Indenture Trustee,
the Insurer and each of the Rating Agencies.
It shall not be necessary for the consent of the Noteholders, the
Residual Certificateholders or the Indenture Trustee pursuant to this Section to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Residual Certificateholders
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by Residual Certificateholders shall
be subject to such reasonable requirements as the Owner Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of Trust, the
Owner Trustee shall cause the filing of such amendment with the Secretary of
State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 12.2. No Legal Title to Owner Trust Estate in Residual
Certificateholders. The Residual Certificateholders shall not have legal title
to any part of the Owner Trust Estate. The Residual Certificateholders shall be
entitled to receive distributions with respect to their undivided ownership
interest therein only in accordance with Article IX. No transfer, by operation
of law or otherwise, of any right, title or interest of the Residual
Certificateholders to and in their ownership interest in the Owner Trust Estate
shall operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any part
of the Owner Trust Estate.
SECTION 12.3. Limitations on Rights of Others. Except for Section
2.7, the provisions of this Agreement are solely for the benefit of the Owner
Trustee, the Sponsor, the Residual Certificateholders, the Servicer and, to the
extent expressly provided herein, the Insurer, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
29
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 12.4. Notices.
(a) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and shall be deemed given upon receipt
personally delivered, delivered by overnight courier or mailed first class mail
or certified mail, in each case return receipt requested, and shall be deemed to
have been duly given upon receipt, if to the Owner Trustee, addressed to the
Corporate Trust Office; if to the Sponsor, addressed to GreenPoint Mortgage
Securities Inc., ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇; if to the Insurer, addressed to Insurer, [Insurer], [Insurer's Address];
or, as to each party, at such other address as shall be designated by such party
in a written notice to each other party.
(b) Any notice required or permitted to be given to a Residual
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Residual Certificateholder
receives such notice.
SECTION 12.5. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 12.6. Separate Counterparts. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 12.7. Assignments; Insurer.
(a) This Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and permitted assigns. This
Agreement shall also inure to the benefit of the Insurer. Without limiting the
generality of the foregoing, all covenants and agreements in this Agreement
which confer rights upon the Insurer shall be for the benefit of and run
directly to the Insurer and the Insurer shall each be entitled to rely on and
enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Basic Documents. The Insurer may disclaim any
of its rights and powers under this Agreement (but not its duties and
obligations under the Policy) upon delivery of a written notice to the Owner
Trustee.
(b) In accepting instructions from the Insurer pursuant to Article V
or Section 7.3 of this Agreement, and with respect to any other obligations of
the Owner Trustee to the Insurer under this Agreement, the Owner Trustee
undertakes to perform or observe only its express obligations under this
Agreement, and no implied obligations with respect to the Insurer shall be read
into this Agreement against the Owner Trustee. The Owner Trustee shall not be
30
deemed to owe any fiduciary duty to the Insurer and it is expressly understood
and agreed by the Insurer that the Owner Trustee shall not be personally liable
or responsible for the payment of any amount owing on or with respect to the
Basic Documents or for the failure of the Trust to perform its obligations under
the Basic Documents or any other agreement with respect thereto.
SECTION 12.8. No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, each
Residual Certificateholder, by accepting a Residual Certificate, and the
Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenants and agrees that they will not at any time institute
against the Sponsor, or join in any institution against the Sponsor of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Residual Certificates, this Agreement or any of the Basic Documents.
SECTION 12.9. No Recourse. Each Residual Certificateholder by
accepting a Residual Certificate acknowledges that such Residual
Certificateholder's Residual Certificates represent beneficial interests in the
Trust only and do not represent interests in or obligations of the Servicer, the
Sponsor, the Owner Trustee, the Indenture Trustee, the Insurer or any Affiliate
thereof and no recourse may be had against such parties or their assets, except
as may be expressly set forth or contemplated in this Agreement, the Residual
Certificates or the Basic Documents.
SECTION 12.10. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 12.11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 12.12. Servicer. The Servicer is authorized to prepare, or
cause to be prepared, execute and deliver on behalf of the Trust all such
documents, reports, filings, instruments, certificates and opinions as it shall
be the duty of the Trust or Owner Trustee to prepare, file or deliver pursuant
to the Basic Documents. Upon written request, the Owner Trustee shall execute
and deliver to the Servicer a limited power of attorney appointing the Servicer
the Trust's agent and attorney-in-fact to prepare, or cause to be prepared,
execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.
31
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
[OWNER TRUSTEE],
Owner Trustee
By:
----------------------------------
Name:
Title:
GREENPOINT MORTGAGE SECURITIES INC.,
Sponsor
By:
----------------------------------
Name:
Title:
Acknowledged and Agreed:
GREENPOINT MORTGAGE FUNDING, INC.,
Servicer
By:
----------------------------------
Name:
Title:
[INSURER],
Insurer
By:
----------------------------------
Name:
Title:
EXHIBIT B
RESIDUAL CERTIFICATE
THIS RESIDUAL CERTIFICATE REPRESENTS CERTAIN RESIDUAL RIGHTS TO PAYMENT TO THE
EXTENT DESCRIBED HEREIN AND IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS RESIDUAL CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON.
THIS RESIDUAL CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS RESIDUAL CERTIFICATE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.10 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS RESIDUAL CERTIFICATE MAY BE MADE UNLESS THE TRANSFEREE
PROVIDES A REPRESENTATION LETTER FROM THE TRANSFEREE OF SUCH RESIDUAL
CERTIFICATE, ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE OWNER
TRUSTEE AND THE INSURER, TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN (AS DEFINED IN SECTION 3(3) OF ERISA) THAT IS SUBJECT TO THE
PROVISIONS OF TITLE I OF ERISA, A PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE
INTERNAL REVENUE CODE, NOR A PERSON ACTING ON BEHALF OF OR USING THE ASSETS OF
ANY SUCH PLAN, WHICH REPRESENTATION LETTER SHALL NOT BE AN EXPENSE OF THE OWNER
TRUSTEE OR THE INSURER.
NO TRANSFER OF A RESIDUAL CERTIFICATE SHALL BE MADE UNLESS SUCH TRANSFER IS
EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS
AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS OR IS MADE IN ACCORDANCE WITH
SAID ACT AND LAWS. EXCEPT FOR THE INITIAL ISSUANCE OF THE RESIDUAL CERTIFICATE
TO THE SPONSOR, THE OWNER TRUSTEE SHALL REQUIRE (i) THE TRANSFEREE TO EXECUTE AN
INVESTMENT LETTER ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE
OWNER TRUSTEE AND THE INSURER CERTIFYING TO THE OWNER TRUSTEE AND THE INSURER
THE FACTS SURROUNDING SUCH TRANSFER, WHICH INVESTMENT LETTER SHALL NOT BE AN
EXPENSE OF THE OWNER TRUSTEE, OR THE INSURER OR (ii) IF THE INVESTMENT LETTER IS
NOT DELIVERED, A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE OWNER TRUSTEE, THE INSURER AND THE SPONSOR THAT
SUCH TRANSFER MAY BE MADE PURSUANT TO AN EXEMPTION, DESCRIBING THE APPLICABLE
EXEMPTION AND THE BASIS THEREFOR, FROM SAID ACT OR IS BEING MADE PURSUANT TO
B-1
SAID ACT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE OWNER TRUSTEE,
THE INSURER OR THE SPONSOR. THE HOLDER OF A RESIDUAL CERTIFICATE DESIRING TO
EFFECT SUCH TRANSFER SHALL, AND DOES HEREBY AGREE TO, INDEMNIFY THE SPONSOR AND
THE INSURER AGAINST ANY LIABILITY THAT MAY RESULT IF THE TRANSFER IS NOT SO
EXEMPT OR IS NOT MADE IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS.
THE RESIDUAL CERTIFICATES AND ANY INTEREST THEREIN SHALL NOT BE TRANSFERRED
EXCEPT UPON SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT: (I) THE PERSON
THAT ACQUIRES A RESIDUAL CERTIFICATE SHALL (A) BE ORGANIZED AND EXISTING UNDER
THE LAWS OF THE UNITED STATES OF AMERICA OR ANY STATE OR THE DISTRICT OF
COLUMBIA THEREOF, (B) EXPRESSLY ASSUME, BY AN AGREEMENT SUPPLEMENTAL HERETO,
EXECUTED AND DELIVERED TO THE OWNER TRUSTEE AND THE INSURER, THE PERFORMANCE OF
EVERY COVENANT AND OBLIGATION OF THE SPONSOR UNDER THE TRUST AGREEMENT AND (C)
AS PART OF ITS ACQUISITION OF A RESIDUAL CERTIFICATE, ACQUIRE ALL RIGHTS OF THE
SPONSOR OR ANY TRANSFEREE UNDER SECTION 4.10 OF THE TRUST AGREEMENT TO AMOUNTS
PAYABLE TO THE RESIDUAL CERTIFICATE OR SUCH TRANSFEREE UNDER SECTIONS 8.7(C)(XV)
AND 8.6(C) OF THE INDENTURE; (II) THE HOLDER OF THE RESIDUAL CERTIFICATES SHALL
DELIVER TO THE OWNER TRUSTEE AND THE INSURER AN OFFICER'S CERTIFICATE STATING
THAT SUCH TRANSFER AND SUCH SUPPLEMENTAL AGREEMENT COMPLY WITH SECTION 4.10(C)
OF THE TRUST AGREEMENT AND THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION
4.10(C) OF THE TRUST AGREEMENT HAVE BEEN COMPLIED WITH AND AN OPINION OF COUNSEL
STATING THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION 4.10(C) OF THE TRUST
AGREEMENT HAVE BEEN COMPLIED WITH, AND THE OWNER TRUSTEE MAY CONCLUSIVELY RELY
ON SUCH OFFICER'S CERTIFICATE, SHALL HAVE NO DUTY TO MAKE INQUIRIES WITH REGARD
TO THE MATTERS SET FORTH THEREIN AND SHALL INCUR NO LIABILITY IN SO RELYING;
(III) THE HOLDER OF THE RESIDUAL CERTIFICATES SHALL DELIVER TO THE OWNER TRUSTEE
AND THE INSURER A LETTER FROM EACH RATING AGENCY CONFIRMING THAT ITS RATING OF
THE NOTES, AFTER GIVING EFFECT TO SUCH TRANSFER, WILL NOT BE REDUCED OR
WITHDRAWN WITHOUT REGARD TO THE POLICY; (IV) THE TRANSFEREE OF THE RESIDUAL
CERTIFICATES SHALL DELIVER TO THE OWNER TRUSTEE, AND THE INSURER AN OPINION OF
COUNSEL TO THE EFFECT THAT (A) SUCH TRANSFER WILL NOT ADVERSELY AFFECT THE
TREATMENT OF THE NOTES AFTER SUCH TRANSFER AS DEBT FOR FEDERAL AND APPLICABLE
STATE INCOME TAX PURPOSES, (B) SUCH TRANSFER WILL NOT RESULT IN THE TRUST BEING
SUBJECT TO TAX AT THE ENTITY LEVEL FOR FEDERAL OR APPLICABLE STATE TAX PURPOSES,
(C) SUCH TRANSFER WILL NOT HAVE ANY MATERIAL ADVERSE IMPACT ON THE FEDERAL OR
APPLICABLE STATE INCOME TAXATION OF A NOTEHOLDER OR ANY RESIDUAL
CERTIFICATEHOLDER AND (D) SUCH TRANSFER WILL NOT RESULT IN THE ARRANGEMENT
CREATED BY THE TRUST AGREEMENT OR ANY "PORTION" OF THE TRUST, BEING TREATED AS A
TAXABLE MORTGAGE POOL AS DEFINED IN SECTION 7701(I) OF THE CODE; (V) ALL FILINGS
AND OTHER ACTIONS
B-2
NECESSARY TO CONTINUE THE PERFECTION OF THE INTEREST OF THE TRUST IN THE
MORTGAGE LOANS AND THE OTHER PROPERTY CONVEYED UNDER THE TRUST AGREEMENT SHALL
HAVE BEEN TAKEN OR MADE AND (VI) THE INSURER SHALL HAVE CONSENTED TO SUCH
TRANSFER.
THIS RESIDUAL CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
B-3
GREENPOINT HOME EQUITY LOAN TRUST 200_-_ RESIDUAL CERTIFICATE
Percentage Interest: 100% Cut-Off Date: __________, 200_
First Payment Date: __________, 200_ Issue Date: __________, 200_
No. 1
GREENPOINT MORTGAGE SECURITIES INC.
Residual Certificateholder
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Residual Certificates referred to in the within-mentioned
Trust Agreement.
[OWNER TRUSTEE], not in its individual capacity
but solely as Owner Trustee
By:
--------------------------------------------
Authenticating Agent
The Trust was created pursuant to a Trust Agreement dated as of
__________, 200_ (the "Trust Agreement"), between the Sponsor and [Owner
Trustee], as owner trustee (the "Owner Trustee"), a summary of certain of the
pertinent provisions of which is set forth below. To the extent not otherwise
defined herein, the capitalized terms used herein have the meanings assigned to
them in the Trust Agreement.
This Residual Certificate is one of the duly authorized Residual
Certificates designated as GreenPoint Home Equity Loan "Asset Backed
Certificates" (herein called the "Residual Certificates"). Also issued under the
Trust Agreement are two classes of Notes designated as Class A-1 Notes and Class
A-2 Notes (collectively referred to herein as the "Notes"). These Residual
Certificates are issued under and are subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the holder of this
Residual Certificate by virtue of the acceptance hereof assents and by which
such holder is bound. The property of the Trust includes (A) a pool of certain
adjustable rate home equity revolving credit line loans (the "HELOC Mortgage
Loans") (including any Additional Balances related thereto) and certain second
lien closed-end loans (the "Closed End Mortgage Loans") in each case which
conform to the loan origination standards with respect to loan balances as of
the date of origination set forth by the Federal Home Loan Mortgage Corporation
and (B) a pool of certain HELOC Mortgage Loans (including any Additional
Balances related thereto) and certain Closed End Mortgage Loans in each case
that do not substantially conform to the loan origination
B-4
standards with respect to loan balances as of the date of origination set forth
by the Federal Home Loan Mortgage Corporation.
Under the Trust Agreement, there will be distributed on the 15th day
of each month or, if such ___th day is not a Business Day, the next Business Day
(the "Payment Date"), commencing on __________, 200_, to the Person in whose
name this Residual Certificate is registered at the close of business on the
Business Day preceding such Payment Date (the "Record Date") such Residual
Certificateholder's Percentage Interest in the amount to be distributed to
Residual Certificateholders on such Payment Date.
The holder of this Residual Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Residual Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
The holder of this Residual Certificate, by acceptance of this
Residual Certificate, specifically acknowledges that it has no right to or
interest in any monies at any time held pursuant to the Reserve Fund or prior to
the release of such monies pursuant to Sections 8.7(c)(xv) and 8.6(c) of the
Indenture, such monies being held in trust for the benefit of the Noteholders
and the Insurer. Notwithstanding the foregoing, in the event that it is ever
determined that the monies held in the Reserve Fund constitute a pledge of
collateral, then the provisions of the Sale and Servicing Agreement shall be
considered to constitute a security agreement and the holder of this Residual
Certificate hereby grants to the Indenture Trustee and the Insurer a first
priority perfected security interest in such amounts. In addition, each Residual
Certificateholder, by acceptance of its Residual Certificate, hereby appoints
the Sponsor as its agent to pledge a first priority perfected security interest
in the Reserve Fund and agrees to execute and deliver such instruments of
conveyance, assignment, grant, confirmation, etc., as well as any financing
statements, in each case as the Insurer shall consider reasonably necessary in
order to perfect the Indenture Trustee's security interest in the Trust
Property.
It is the intent of the Sponsor, the Servicer, and the Residual
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a branch. In the event that the Residual Certificates are held by
more than one Holder, it is the intent of the Sponsor, the Servicer, and the
Residual Certificateholders that, for purposes of Federal income taxes, the
Trust will be treated as a partnership and the Residual Certificateholders will
be treated as partners in that partnership. The Sponsor and any other Residual
Certificateholders, by acceptance of a Residual Certificate, agree to treat, and
to take no action inconsistent with the treatment of, the Residual Certificates
for such tax purposes as partnership interests in the Trust. Each Residual
Certificateholder, by its acceptance of a Residual Certificate, covenants and
agrees that such Residual Certificateholder will not at any time institute
against the Trust or the Sponsor, or join in any institution against the Trust
or the Sponsor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Residual Certificates, the Certificates, the Trust Agreement or any of the
Basic Documents.
B-5
Distributions on this Residual Certificate will be made as provided
in the Sale and Servicing Agreement and the Indenture by the Indenture Trustee
by wire transfer or check mailed to the Residual Certificateholder of record in
the Certificate Register without the presentation or surrender of this Residual
Certificate or the making of any notation hereon. Except as otherwise provided
in the Trust Agreement and notwithstanding the above, the final distribution on
this Residual Certificate will be made after due notice by the Owner Trustee of
the pendency of such distribution and only upon presentation and surrender of
this Residual Certificate at the office or agency maintained for the purpose by
the Owner Trustee in the Corporate Trust Office.
Reference is hereby made to the further provisions of this Residual
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Residual Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
The Residual Certificates do not represent an obligation of, or an
interest in, the Company, the Sponsor, the Servicer, the Insurer, the Owner
Trustee or any Affiliates of any of them and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated
herein or in the Trust Agreement, the Indenture or the Basic Documents. In
addition, this Residual Certificate is not guaranteed by any governmental agency
or instrumentality and is limited in right of payment to certain collections
with respect to the Mortgage Loans, as more specifically set forth herein, in
the Sale and Servicing Agreement and in the Indenture. A copy of each of the
Sale and Servicing Agreement and the Trust Agreement may be examined during
normal business hours at the principal office of the Sponsor, and at such other
places, if any, designated by the Sponsor, by any Residual Certificateholder
upon written request.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Sponsor and the rights of the Residual Certificateholders
under the Trust Agreement at any time by the Sponsor and the Owner Trustee with
the prior written consent of the Insurer and with the consent of the holders of
the Notes and the Residual Certificates evidencing not less than a majority of
the outstanding Notes and the Residual Certificates. Any such amendment shall be
conclusive and binding upon the holder of this Residual Certificate and on all
future holders of this Residual Certificate and of any Residual Certificate
issued upon the transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent is made upon this Residual Certificate. The
Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the holders of any of the Residual
Certificates (other than the Sponsor, or the Insurer).
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Residual Certificate is
registrable in the Certificate Register upon surrender of this Residual
Certificate for registration of transfer at the offices or agencies of the
B-6
Certificate Registrar maintained by the Owner Trustee in the Corporate Trust
Office, accompanied by a written instrument of transfer in form satisfactory to
the Owner 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 Residual Certificates in authorized denominations evidencing the
same aggregate interest in the Trust will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Trust
Agreement is [Owner Trustee].
Except for Residual Certificates issued to the Sponsor, the Residual
Certificates are issuable only as registered Residual Certificates without
coupons in denominations of $1,000 or integral multiples of $1,000 in excess
thereof. As provided in the Trust Agreement and subject to certain limitations
therein set forth, Residual Certificates are exchangeable for new Residual
Certificates in authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar, the Insurer and any
agent of the Owner Trustee, the Certificate Registrar, or the Insurer may treat
the person in whose name this Residual Certificate is registered as the owner
hereof for all purposes, and none of the Owner Trustee, the Certificate
Registrar, the Insurer nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Trust Agreement
and the Trust created thereby shall terminate upon the payment to Residual
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement, the Indenture and the Sale and Servicing Agreement and the
disposition of all property held as part of the Trust. The Sponsor may at its
option redeem the Notes at a price and upon the satisfaction of certain
conditions specified in Section 7.01(b) of the Sale and Servicing Agreement, and
if all of the Notes are redeemed, such redemption may result in termination of
the Trust which may effect a transfer of the Residual Certificates; however,
such right of purchase is exercisable, subject to certain restrictions, only on
any Payment Date on or after the Payment Date immediately prior to which the
related Note Principal Balance for a Class of Notes is less than or equal to 10%
of the related Original Note Principal Balance for such Class of Notes, all
amounts due and owing to the Insurer for unpaid premiums and unreimbursed draws
related to such Class of Notes on the Policy and all other amounts due and owing
to the Insurer pursuant to the Insurance Agreement together with interest
thereon as provided under the Insurance Agreement have been paid.
The recitals contained herein shall be taken as the statements of
the Sponsor or the Servicer, as the case may be, and the Owner Trustee assumes
no responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Residual Certificate
or of any Mortgage Loan or related document.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual or facsimile
signature, this Residual
B-7
Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.
B-8
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and
not in its individual capacity, has caused this Residual Certificate to be duly
executed.
GREENPOINT HOME EQUITY LOAN TRUST 200_-_
By: [OWNER TRUSTEE], not in its individual capacity
but solely as Owner Trustee
By:
------------------------------------------------
Name:
Title:
Dated: __________, 200_
B-9
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
--------------------------------------------------------------------------------
the within Residual Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_________________________ Attorney to transfer said Residual Certificate on the
books of the Certificate Registrar, with full power of substitution in the
premises.
Dated:
*
------------------------------------------------
Signature Guaranteed:
*
------------------------------------------------
----------
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Residual
Certificate in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in STAMP
or such other "signature guarantee program" as may be determined by the
Certificate Registrar in addition to, or in substitution for, STAMP, all
in accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT C
CERTIFICATE OF TRUST OF
GREENPOINT HOME EQUITY LOAN TRUST 200_-_
This Certificate of Trust of GreenPoint Home Equity Loan Trust
200_-_ (the "Trust"), dated as of __________, 200_, is being duly executed and
filed by [Owner Trustee], a [State, Type of Organization], as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. Code, ss. 3801 et
seq.).
1. Name. The name of the business trust formed hereby is GreenPoint
Home Equity Loan Trust 200_-_.
2. Delaware Trust. The name and business address of the Owner
Trustee of the Trust in the State of Delaware is [Owner Trustee], [Owner
Trustee's Address].
3. This Certificate of Trust will be effective __________, 200_.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust as of the date first above
written.
[OWNER TRUSTEE],
not in its individual capacity but solely as Owner
Trustee of the Trust.
By:
-----------------------------------------------
Name:
Title: