EXHIBIT 4.3
FORM OF TRUST AGREEMENT
TRUST AGREEMENT
dated as of _____________
by and between
_______________________________
as Depositor
and
______________________________,
as Owner Trustee
TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS 1
Section 1.01. Capitalized Terms........................................1
Section 1.02. Other Definitional Provisions............................5
ARTICLE II ORGANIZATION........................................................6
Section 2.01. Name.....................................................6
Section 2.02. Office...................................................6
Section 2.03. Purposes and Powers......................................6
Section 2.04. Appointment of Owner Trustee.............................7
Section 2.05. Initial Capital Contribution of Owner Trust Estate.......7
Section 2.06. Declaration of Trust.....................................7
Section 2.07. Liability of the Holders.................................7
Section 2.08. Title to Trust Property..................................7
Section 2.09. Situs of Trust...........................................8
Section 2.10. Representations and Warranties of the Depositor;
Covenant of the Certificateholders.....................8
ARTICLE III CERTIFICATES AND TRANSFER OF INTERESTS.............................9
Section 3.01. Initial Ownership........................................9
Section 3.02. The Certificates.........................................9
Section 3.03. Execution, Authentication and Delivery of Trust
Certificates..........................................10
Section 3.04. Registration of Transfer and Exchange of Trust
Certificates..........................................10
Section 3.05. Mutilated, Destroyed, Lost or Stolen Certificates.......11
Section 3.06. Persons Deemed Owners...................................11
Section 3.07. Access to List of Holders' Names and Addresses..........11
Section 3.08. Maintenance of Office or Agency.........................12
Section 3.09. Restrictions on Transfer of Certificates................12
ARTICLE IV ACTIONS BY OWNER TRUSTEE...........................................14
Section 4.01. Prior Notice to Holders with Respect to Certain
Matters...............................................14
Section 4.02. Action by Holders with Respect to Bankruptcy............16
Section 4.03. Restrictions on Holders' Power..........................16
Section 4.04. Majority Control........................................16
ARTICLE V TAX PROVISIONS; CERTAIN DUTIES......................................16
Section 5.01. Federal Income Tax Provisions...........................16
Section 5.02. Withholding Taxes.......................................19
Section 5.03. Accounting and Records to the Noteholders, Owners,
the Internal Revenue Service and Others...............20
Section 5.04. Signature on Returns....................................20
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ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE..............................20
Section 6.01. General Authority.......................................20
Section 6.02. General Duties..........................................21
Section 6.03. Action upon Instruction.................................21
Section 6.04. No Duties Except as Specified in this Agreement,
the Basic Documents or any Instructions...............22
Section 6.05. No Action Except Under Specified Documents or
Instructions..........................................22
Section 6.06. Restrictions............................................23
ARTICLE VII CONCERNING THE OWNER TRUSTEE......................................23
Section 7.01. Acceptance of Trusts and Duties.........................23
Section 7.02. Furnishing of Documents.................................24
Section 7.03. Representations and Warranties..........................25
Section 7.04. Reliance; Advice of Counsel.............................25
Section 7.05. Not Acting in Individual Capacity.......................26
Section 7.06. Owner Trustee Not Liable for Certificates or Mortgage
Loans.................................................26
Section 7.07. Owner Trustee May Own Certificates and Notes............26
Section 7.08. Licenses................................................26
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE....................................26
Section 8.01. Owner Trustee's Fees and Expenses.......................26
Section 8.02. Indemnification.........................................27
Section 8.03. Payments to the Owner Trustee...........................27
ARTICLE IX TERMINATION OF TRUST AGREEMENT.....................................28
Section 9.01. Termination of Trust Agreement..........................28
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES..............29
Section 10.01. Eligibility Requirements for Owner Trustee..............29
Section 10.02. Resignation or Removal of Owner Trustee.................29
Section 10.03. Successor Owner Trustee.................................30
Section 10.04. Merger or Consolidation of Owner Trustee................30
Section 10.05. Appointment of Co-Trustee or Separate Trustee...........30
ARTICLE XI MISCELLANEOUS......................................................32
Section 11.01. Supplements and Amendments..............................32
Section 11.02. No Legal Title to Owner Trust Estate in Holders.........33
Section 11.03. Limitations on Rights of Others.........................33
Section 11.04. Notices.................................................33
Section 11.05. Severability............................................33
Section 11.06. Separate Counterparts...................................34
Section 11.07. Successors and Assigns..................................34
Section 11.08. No Petition.............................................34
Section 11.09. No Recourse.............................................34
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Section 11.10. Headings................................................34
Section 11.11. GOVERNING LAW...........................................34
Section 11.12. Grant of Certificateholder Rights to Note Insurer.......34
Section 11.13. Third-Party Beneficiary.................................35
Section 11.14. Suspension and Termination of Note Insurer's Rights.....35
Section 11.15. Servicer................................................36
EXHIBITS
EXHIBIT A Form of Certificate
EXHIBIT B Form of Certificate of Trust
EXHIBIT C Form of Investment Letter
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This TRUST AGREEMENT, dated as of ________________, by and
among _________________________________________________, as Depositor (the
"Depositor"), and _________________________________________________, a
________________ banking association, as owner trustee (the "Owner Trustee").
ARTICLE I
DEFINITIONS
Section 1.01. Capitalized Terms. For all purposes of this
Agreement, the following terms shall have the meanings set forth below:
"Agreement" shall mean this Trust Agreement, as may be amended
and supplemented from time to time.
"Annual Tax Reports" shall have the meaning assigned thereto
in Section 5.01(k).
"Authorized Officer" shall have the meaning assigned thereto
in Appendix I to the Indenture.
"Basic Documents" shall mean this Agreement, the Sale and
Servicing Agreement, the Loan Sale Agreement, the Indenture and the Insurance
Agreement.
"Business Day" shall mean any day other than (i) a Saturday or
Sunday or (ii) a day that is either a legal holiday or a day on which the Note
Insurer or banking institutions in the State of New York, the State of Delaware,
or the state in which the Indenture Trustee's office from which payments will be
made to Certificateholders, are authorized or obligated by law, regulation or
executive order to be closed.
"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.
"Capital Account" shall have the meaning assigned thereto in
Section 5.01(a).
"Certificates" shall mean the Pool I Certificates and the Pool
II Certificates.
"Certificate of Trust" shall mean the Certificate of Trust, in
the form of Exhibit B, to be filed for the Trust pursuant to Section 3810(a) of
the Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean
the register mentioned and the registrar appointed pursuant to Section 3.04.
"Certificateholder" or "Holder" shall mean a Person in whose
name a Certificate or Certificates is registered.
"Class" shall mean either the Class A-1 Notes or the Class A-2
Notes.
"Class A-1 Notes" shall mean the__________________________,
Mortgage Backed Notes, Series ______, Class A-1.
"Class A-2 Notes" shall mean the _________________________,
Mortgage Backed Notes, Series ______, Class A-2.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, and, where appropriate in context, Treasury Regulations promulgated
thereunder.
"Collateral Agent" shall mean ________________________, a
________ banking association.
"Collection Account" shall have the meaning assigned thereto
in Appendix I to the Indenture.
"Corporate Trust Office" shall mean, with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee located at
_____________________ __________________________, Attention: Corporate Trust
Administration; or at such other address in the State of Delaware as the Owner
Trustee may designate by notice to the Certificateholders and the Depositor, or
the principal corporate trust office of any successor Owner Trustee (the address
(which shall be in the State of Delaware) of which the successor owner trustee
will notify the Certificateholders and the Depositor).
"Depositor" shall mean ___________________________________, a
________ corporation.
"Distribution Date" shall mean the twenty-fifth day of each
month or, if such twenty-fifth day is not a Business Day, the next succeeding
Business Day, commencing ______________________.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Expenses" shall have the meaning assigned to such term in
Section 8.02.
"Holder Nonrecourse Debt Minimum Gain" shall have the meaning
set forth for "partner nonrecourse debt minimum gain" in Treasury Regulations
Section 1.704-2(i)(2). A Holder's share of Holder Nonrecourse Debt Minimum Gain
shall be determined in accordance with Treasury Regulations Section
1.704-2(i)(5).
"Indenture" shall mean the Indenture, dated as of
_____________, by and between the Trust and the Indenture Trustee.
"Indenture Trustee" means _____________________, a
____________ banking corporation, as Indenture Trustee under the Indenture.
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"Insurance Agreement" means the Insurance and Indemnity
Agreement, dated as of _______________, among the Note Insurer, the Trust, the
Depositor, the Servicer and the Originators.
"Investment Letter" shall have the meaning assigned to such
term in Section 3.04.
"Loan Sale Agreement" means the Loan Sale Agreement, dated as
of _____________, among the Originators and the Depositor.
"Non-U.S. Person" shall mean an individual, corporation,
partnership or other person other than a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in or
under the laws of the United States or any political subdivision thereof, an
estate that is subject to U.S. federal income tax regardless of the source of
its income or a trust if (i) a court in the United States is able to exercise
primary supervision over the administration of the trust and (ii) one or more
United States fiduciaries have the authority to control all substantial
decisions of the trust.
"Note Insurance Policy" shall mean the financial guaranty
insurance policy issued by the Note Insurer for the benefit of the holders of
the Notes.
"Note Insurer" shall mean __________________________, a
___________ financial guaranty insurance company.
"Note Insurer Default" shall have the meaning assigned to such
term in the Indenture.
"Notes" shall mean the Class A-1 Notes and the Class A-2
Notes.
"Originators" means__________________________________________.
"Ownership Interest" means, with respect to any Certificate,
any ownership or security interest in such Certificate, including any interest
in such Certificate as the Holder thereof and any other interest therein,
whether direct or indirect, legal or beneficial, as owner or as pledgee.
"Owner Trust Estate" shall mean the Trust Estate (as defined
in Appendix I to the Indenture), including the contribution of $1 referred to in
Section 2.05 hereof.
"Owner Trustee" shall mean ___________________________, a
________ banking association, not in its individual capacity but solely as owner
trustee under this Agreement, and any successor owner trustee hereunder.
"Percentage Interest" shall mean with respect to any
Certificate, the percentage portion of all of the Trust Interest evidenced
thereby as stated on the face of such Certificate.
"Pool I Certificate" shall mean a certificate evidencing the
beneficial interest of a Holder in the sub-trust of the Trust consisting of the
Pool I Mortgage Loans, substantially in the form attached hereto as Exhibit A.
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"Pool II Certificate" shall mean a certificate evidencing the
beneficial interest of a Holder in the sub-trust of the Trust consisting of the
Pool II Mortgage Loans, substantially in the form attached hereto as Exhibit A.
"Prospective Holder" shall have the meaning set forth in
Section 3.09(a).
"Rating Agency Condition" means, with respect to any action to
which a Rating Agency Condition applies, that each Rating Agency shall have been
given ten (10) days (or such shorter period as is acceptable to each Rating
Agency) prior notice thereof and that each of the Rating Agencies shall have
notified the Indenture Trustee, the Depositor, the Servicer, the Note Insurer,
the Owner Trustee and the Trust in writing that such action will not result in a
reduction or withdrawal of the then current "implied" rating of the Notes that
it maintains without taking into account the Note Insurance Policy.
"Record Date" shall mean, with respect to the Certificates and
any Distribution Date, the last Business Day of the month immediately preceding
the month in which such Distribution Date occurs.
"REMIC" means a "real estate mortgage investment conduit"
within the meaning of Section 860D of the Code.
"Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement, dated as of ______________, among the Depositor, the Trust,
the Indenture Trustee, the Collateral Agent and the Servicer.
"Secretary of State" shall mean the Secretary of State of the
State of Delaware.
"Servicer" means ____________________________________________.
"Taxable Year" shall have the meaning assigned thereto in
Section 5.01(j).
"Tax Matters Partner" shall have the meaning assigned thereto
in Section 5.01(l).
"Transfer" means any direct or indirect transfer, sale,
pledge, hypothecation or other form of assignment of any Ownership Interest in a
Certificate.
"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.
"Trust" shall mean the _______________________________________
established by this Agreement.
"Trust Interest" shall mean the right to receive, on each
Distribution Date, distributions of the amounts, if any, to the Holders of the
Certificates pursuant to Section 8.02 of the Indenture. Holders of the Pool I
Certificates will be entitled to distributions in respect of the sub-trust of
the Trust consisting of the Pool I Mortgage Loans. Holders of the Pool II
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Certificates will be entitled to distributions in respect of the sub-trust of
the Trust consisting of the Pool II Mortgage Loans.
"Trust Minimum Gain" shall have the meaning set forth for
"partnership minimum gain" in Treasury Regulations 1.704-2(b)(2) and 1.704-2(d).
In accordance with Treasury Regulations Section 1.704-2(d), the amount of Trust
Minimum Gain is determined by first computing, for each nonrecourse liability of
the Trust, any gain the Trust would realize if it disposed of the property
subject to that liability for no consideration other than full satisfaction of
the liability, and then aggregating the separately computed gains. A Holder's
share of Trust Minimum Gain shall be determined in accordance with Treasury
Regulations Section 1.704-2(g)(1).
"Loan Sale Agreement" means the Depositor's Agreement, dated
as of ____________, among the Originators and the Depositor.
Section 1.02. Other Definitional Provisions.(a) Capitalized
terms used herein and not otherwise defined herein have the meanings assigned to
them in Appendix I to the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles. To the extent that
the definitions of accounting terms in this Agreement or in any such certificate
or other document are inconsistent with the meanings of such terms under
generally accepted accounting principles, the definitions contained in this
Agreement or in any such certificate or other document shall control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation".
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred
to herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein;
references to a Person are also to its permitted successors and assigns.
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ARTICLE II
ORGANIZATION
Section 2.01. Name. The Trust created hereby shall be known as
"__________________________ _______," 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 on behalf of the Trust.
Section 2.02. Office. The office of the Trust shall be in care
of the Owner Trustee at the Corporate Trust Office or at such other address in
Delaware as the Owner Trustee may designate by written notice to the
Certificateholders, Indenture Trustee, the Note Insurer and the Depositor.
Section 2.03. Purposes and Powers. The purpose of the Trust is
to engage in the following activities:
(a) to issue the Notes pursuant to the Indenture and to sell
such Notes;
(b) with the proceeds of the sale of the Notes, to pay the
organizational, startup and transactional expenses of the Trust and to
purchase the Mortgage Loans to be included in the Owner Trust Estate
from the Depositor with the balance of such funds pursuant to the Sale
and Servicing Agreement;
(c) to assign, grant, transfer, pledge, mortgage and convey
the Owner Trust Estate pursuant to the Indenture and to hold, manage
and distribute to the Certificateholders any portion of the Owner Trust
Estate released from the lien of, and remitted to the Trust pursuant
to, the Indenture;
(d) to enter into and perform its obligations under the Basic
Documents to which it is or is to be a party;
(e) 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;
(f) 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
and payments to the Holders and the Noteholders; and
(g) to issue the Certificates pursuant to this Agreement.
The Trust is hereby authorized by the initial
Certificateholders 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.
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Section 2.04. Appointment of Owner Trustee. The Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein.
Section 2.05. Initial Capital Contribution of Owner Trust
Estate. The Depositor hereby sells, assigns, transfers, conveys and sets over to
the Owner Trustee, as of the date hereof, the sum of $1. The Owner Trustee
hereby acknowledges receipt in trust from the Depositor, as of the date hereof,
of the foregoing contribution, which shall constitute the initial Owner Trust
Estate. The Certificateholders 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.
Concurrently with the execution of this Agreement, the Trust will enter into the
Sale and Servicing Agreement pursuant to which it will purchase the Mortgage
Loans which comprise the remainder of the Owner Trust Estate.
Section 2.06. 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 Holders, subject
to the obligations of the Trust under the Basic Documents. Each Pool of Mortgage
Loans shall constitute a separate sub-trust of the Trust.
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. The
parties agree that no election will be made to treat the sub-trusts of the Trust
consisting of the Pool I Mortgage Loans or the Pool II Mortgage Loans or the
portion of the Owner Trust Estate consisting of the Pool I Mortgage Loans or the
Pool II Mortgage Loans as a REMIC. It is the intention of the parties hereto
that, solely for income and franchise tax purposes, after issuance of the
Certificates, the Trust shall be treated as a partnership, with the assets of
the partnership being the Mortgage Loans and other assets held by the Trust, the
partners of the partnership being the Holders of the Certificates, and the Notes
being non-recourse debt of the partnership (or, if there is only one
Certificateholder, that the Trust shall be disregarded as an entity separate
from such Holder, with the assets held by the Trust being treated as assets of
the Holder and the Notes being treated as non-recourse debt of the Holder). The
parties agree that, unless otherwise required by appropriate tax authorities or
unless the Trust is disregarded as an entity separate from its sole
Certificateholder for income and franchise tax purposes, the Owner Trustee will
file or cause to be filed (at the written direction of the Majority
Certificateholders) annual or other necessary returns, reports and other forms
(such returns, reports and other forms to be prepared by the Depositor)
consistent with the characterization of the Trust as a partnership for such tax
purposes pursuant to Section 5.01(k). Effective as of the date hereof, the Owner
Trustee shall have all rights, powers and duties set forth herein and in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee shall file the Certificate of Trust with the Secretary of
State.
Section 2.07. Liability of the Holders. No Holder shall have
any personal liability for any liability or obligation of the Trust. The
Certificates shall be fully paid and nonassessable.
Section 2.08. Title to Trust Property. (a) Legal title to all
of the Owner Trust Estate shall be vested at all times in the Trust as a
separate legal entity except where applicable
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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 and/or a separate trustee, as the case may be.
(b) The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. No transfer by operation of law or otherwise of
any interest of the Certificateholders shall operate to terminate this Agreement
or the trusts hereunder or entitle any transferee to an accounting or to the
transfer to it of any part of the Owner Trust Estate.
Section 2.09. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All accounts maintained at a bank by the
Owner Trustee or the Indenture Trustee on behalf of the Trust shall be located
in the State of Delaware or the State of New York. The Trust shall not have any
employees; provided, however, nothing herein shall restrict or prohibit the
Owner Trustee from having employees within or without the State of Delaware. The
only office of the Trust will be at the Corporate Trust Office in the State of
Delaware.
Section 2.10. Representations and Warranties of the Depositor;
Covenant of the Certificateholders. The Depositor hereby represents and warrants
to the Owner Trustee and the Note Insurer that:
(i) The Depositor is duly organized and
validly existing as a corporation in good standing under the
laws of the State of Delaware, with power and authority to own
its properties and to conduct its business as such properties
are currently owned and such business is presently conducted.
(ii) The Depositor has the power and
authority to execute and deliver this Agreement and to carry
out its terms; the Depositor has full power and authority to
transfer and assign the property to be transferred and
assigned to and deposited with the Trust and the Depositor has
duly authorized such transfer 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 Depositor by all necessary corporate
action.
(iii) 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 Depositor, or any indenture,
agreement or other instrument to which the Depositor 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 Depositor's knowledge, any order,
rule or regulation applicable to the Depositor of any court or
of any Federal or state regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over
the Depositor or its properties.
(iv) There are no proceedings or
investigations pending or notice of which has been received in
writing before any court, regulatory body, administrative
agency or
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other governmental instrumentality having jurisdiction over
the Depositor or its properties: (x) asserting the invalidity
of this Agreement, (y) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or (z)
seeking any determination or ruling that should reasonably be
expected to materially and adversely affect the performance by
the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
(v) The representations and warranties of
the Depositor in Article III of the Loan Sale Agreement are
true and correct.
(vi) The Depositor has duly executed and
delivered this Agreement, and this Agreement constitutes the
legal, valid and binding obligation of the Depositor,
enforceable against the Depositor, in accordance with its
terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium or similar laws
affecting the enforcement of creditors' rights generally and
by the application of equitable principles.
(b) Each Certificateholder covenants with the Owner Trustee
and the Note Insurer that during the continuance of this Agreement, and while it
holds Certificates, it will comply in all respects with the provisions of its
Certificate of Incorporation in effect from time to time.
ARTICLE III
CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Initial Ownership. Upon the formation of the
Trust by the contribution by the Depositor pursuant to Section 2.05 and until
the issuance of the Certificates, the Depositor shall be the sole beneficiary of
the Trust.
Section 3.02. The Certificates. The Certificates shall be
issued without a principal amount and shall together evidence the entire
beneficial ownership interest in the Trust. The Pool I Certificates shall
evidence the entire beneficial ownership interest in the sub-trust of the Trust
consisting of the Pool I Mortgage Loans, and the Pool II Certificates shall
evidence the entire beneficial ownership interest in the sub-trust of the Trust
consisting of the Pool II Mortgage Loans. The Certificates shall be printed,
lithographed or engraved or may be produced in any other manner as is reasonably
acceptable to the Owner Trustee, as evidenced by its execution thereof. The
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of an Authorized Officer of the Owner Trustee. Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be valid, notwithstanding that such individuals or any of them
shall have ceased to be so authorized prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of authentication
and delivery of such Certificates.
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A transferee of a Certificate shall become a
Certificateholder, and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder upon such transferee's acceptance
of a Certificate duly registered in such transferee's name pursuant to Section
3.04.
Section 3.03. Execution, Authentication and Delivery of Trust
Certificates. Concurrently with the initial transfer of the Mortgage Loans to
the Trust pursuant to the Sale and Servicing Agreement, the Owner Trustee shall
cause the Certificates, representing 100% of the Percentage Interests of the
related Trust Interest, to be executed on behalf of the Trust, authenticated and
delivered on behalf of the Depositor, as initial Certificateholder. No
Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit A,
executed by the Owner Trustee or the Owner Trustee's authenticating agent, by
manual or facsimile signature; such authentication shall constitute conclusive
evidence that such Certificate shall have been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their authentication.
Section 3.04. Registration of Transfer and Exchange of Trust
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.08, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Owner Trustee
shall be the initial "Certificate Registrar".
Upon surrender for registration of transfer of any Certificate
at the office or agency maintained pursuant to Section 3.08, the Owner Trustee
shall execute, authenticate and deliver (or shall cause its authenticating agent
to authenticate and deliver), in the name of the designated transferee or
transferees, one or more new Certificates of a like Percentage Interest dated
the date of authentication by the Owner Trustee or any authenticating agent. At
the option of a Certificateholder, Certificates may be exchanged for other
Certificates of a like Percentage Interest upon surrender of the Certificates to
be exchanged at the office or agency maintained pursuant to Section 3.08.
Every Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Note Insurer, or, upon the occurrence and continuation
of a Note Insurer Default, satisfaction of the Rating Agency Condition, in
addition to the Owner Trustee and the Certificate Registrar duly executed by the
Certificateholder or his attorney duly authorized in writing. In addition, each
Certificate presented or surrendered for registration of transfer and exchange
must be accompanied by a representation letter (an "Investment Letter") from the
Prospective Holder, in the form of Exhibit C hereto, certifying as to the
representations set forth in Section 3.09(a), (b) and (c). Each Certificate
surrendered for registration of transfer or exchange shall be canceled and
disposed of by the Certificate Registrar in accordance with its customary
practice.
No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
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The preceding provisions of this Section 3.04 notwithstanding,
the Owner Trustee shall not make and the Certificate Registrar shall not
register transfers or exchanges of Certificates for a period of fifteen (15)
days preceding the Distribution Date with respect to the Certificates.
Notwithstanding anything contained herein to the contrary, the
Owner Trustee shall not be responsible for ascertaining whether any transfer
complies with the registration provisions or exemptions from the Securities Act
of 1933, as amended, the Securities Act of 1934, as amended, applicable state
securities law or the Investment Company Act of 1940, as amended; provided,
however, that if an Investment Letter is specifically required to be delivered
to the Owner Trustee by a purchaser or transferee of a Certificate, the Owner
Trustee shall be under a duty to examine the same to determine whether it
conforms to the form of Investment Letter set forth as Exhibit C hereto and
shall promptly notify the party delivering the same if such Investment Letter
does not so conform.
Section 3.05. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated 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 Certificate and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, the Owner Trustee on behalf of the Trust shall execute
and the Owner Trustee, or the Owner Trustee's authenticating agent, shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Percentage
Interest. In connection with the issuance of any new Certificate under this
Section 3.05, 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 Certificate issued
pursuant to this Section shall constitute conclusive evidence of ownership in
the Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 3.06. Persons Deemed Owners. Each person by virtue of
becoming a Certificateholder in accordance with this Agreement shall be deemed
to be bound by the terms of this Agreement. Prior to due presentation of a
Certificate for registration of transfer, the Owner Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be registered
in the Certificate Register as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 5.02 and for all other purposes
whatsoever, and neither the Owner Trustee nor the Certificate Registrar shall be
bound by any notice to the contrary.
Section 3.07. Access to List of Holders' Names and Addresses.
The Certificate Registrar shall furnish or cause to be furnished to the Owner
Trustee, the Servicer, the Depositor and the Indenture Trustee immediately prior
to each Distribution Date, a list of the names and addresses of the
Certificateholders as of the most recent Record Date. If one or more Holders of
Certificates, together evidencing Percentage Interests totaling not less than
25%, apply in writing to the Certificate Registrar, and such application states
that the applicants desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates and such
application is accompanied by a copy of the communication that such
11
applicants propose to transmit, then the Certificate Registrar shall, within
five (5) Business Days after the receipt of such application, afford such
applicants access during normal business hours to the current list of
Certificateholders. Each Certificateholder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Certificate Registrar or the Owner Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
Section 3.08. Maintenance of Office or Agency. The Owner
Trustee shall maintain an office or offices or agency or agencies where notices
and demands to or upon the Owner Trustee in respect of the Basic Documents may
be served, and so long as the Owner Trustee is the Certificate Registrar, where
Certificates may be surrendered for registration of transfer or exchange and
notices and demands to or upon the Certificate Registrar in respect of the
Certificates, may be served. The Owner Trustee initially designates the
Corporate Trust Office as its principal corporate trust office for such
purposes. The Owner Trustee shall give prompt written notice to the Depositor
and to the Certificateholders of any change in the location of the Certificate
Register or any such office or agency.
Section 3.09. Restrictions on Transfer of Certificates. (a)
Each prospective purchaser and any subsequent transferee of a Certificate (each,
a "Prospective Holder"), other than the Depositor, shall represent and warrant,
in writing, to the Owner Trustee and the Certificate Registrar and any of their
respective successors that:
(i) Such Person is (A) a "qualified
institutional buyer" as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Securities Act"), and
is aware that the seller of the Certificate may be relying on
the exemption from the registration requirements of the
Securities Act provided by Rule 144A and is acquiring such
Certificate for its own account or for the account of one or
more qualified institutional buyers for whom it is authorized
to act, or (B) a Person involved in the organization or
operation of the Trust or an affiliate of such Person within
the meaning of Rule 3a-7 of the Investment Company Act of
1940, as amended (including, but not limited to, the
Depositor).
(ii) Such Person understands that the
Certificates have not been and will not be registered under
the Securities Act and may be offered, sold, pledged or
otherwise transferred only to a person whom the seller
reasonably believes is (A) a qualified institutional buyer or
(B) a Person involved in the organization or operation of the
Trust or an affiliate of such Person, in a transaction meeting
the requirements of Rule 144A under the Securities Act and in
accordance with any applicable securities laws of any state of
the United States.
(iii) Such Person understands that the
Certificates bear a legend to the following effect:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
ANY STATE SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR
12
INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING
PLEDGED) BY THE HOLDER HEREOF ONLY TO (I) A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE ACT, IN
A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE
STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) A PERSON
INVOLVED IN THE ORGANIZATION OR OPERATION OF THE TRUST OR AN
AFFILIATE OF SUCH A PERSON WITHIN THE MEANING OF RULE 3a-7 OF
THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (INCLUDING, BUT
NOT LIMITED TO, _______________) IN A TRANSACTION THAT IS
REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS
OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS
CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS."
(b) By its acceptance of a Certificate, each Prospective
Holder agrees and acknowledges that no legal or beneficial interest in all or
any portion of any Certificate may be transferred directly or indirectly to an
entity that holds residual securities as nominee to facilitate the clearance and
settlement of such securities through electronic book-entry changes in accounts
of participating organizations (a "Book-Entry Nominee") and any such purported
transfer shall be void and have no effect.
(c) No transfer of a Certificate or any beneficial interest
therein shall be made to any person unless the Note Insurer has given its prior
written consent to such transfer (or, upon the occurrence and continuance of a
Note Insurer Default, satisfaction of the Rating Agency Condition) and the Owner
Trustee has received a representation letter from the Transferee to the effect
that such transferee (i) is not a person which is an employee benefit plan,
trust or account subject to Title I of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") or Section 4975 of the Code or a governmental
plan, as defined in Section 3(32) of ERISA, subject to any federal, state or
local law which is, to a material extent, similar to the foregoing provisions of
ERISA or the Code (any such person being a "Plan"), (ii) is not an entity,
including an insurance company separate account or general account, whose
underlying assets include "plan assets" by reason of a Plan's investment in the
entity and (iii) is not directly or indirectly purchasing such Certificate or
interest therein on behalf of, as investment manager of, as named fiduciary of,
as trustee of, or with the assets of a Plan.
(d) The Owner Trustee shall not execute, and shall not
countersign and deliver, a Certificate in connection with any transfer thereof
unless the transferor shall have provided to the Owner Trustee an Investment
Letter, signed by the transferee, which certificate shall contain the consent of
the transferee to any amendments of this Agreement as may be required to
effectuate further the foregoing restrictions on transfer of the Certificates to
Book-
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Entry Nominees, and an agreement by the transferee that it will not
transfer a Certificate without providing to the Owner Trustee an Investment
Letter.
(e) The Certificates shall bear an additional legend referring
to the restrictions contained in paragraph (b) above.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice to Holders with Respect to Certain
Matters. With respect to the following matters, the Owner Trustee shall not take
action (and the Certificateholders shall not direct the Owner Trustee to take
any action) unless at least thirty (30) days before the taking of such action,
the Owner Trustee shall have notified the Certificateholders (if the Note
Insurer has directed the Owner Trustee to take action) and the Note Insurer (if
the Certificateholders have directed the Owner Trustee to take action) in
writing of the proposed action and neither the Certificateholders nor the Note
Insurer shall have notified the Owner Trustee in writing prior to the 30th day
after such notice is given that such Certificateholders and/or the Note Insurer
have withheld consent or the Certificateholders have provided alternative
written direction (any direction by the Certificateholders shall require the
prior written consent of the Note Insurer):
(a) the initiation of any claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection
of the Mortgage Loans) and the compromise of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of the Mortgage
Loans);
(b) 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);
(c) the amendment or other change to this Agreement or any
Basic Document in circumstances where the consent of any Holder is
required; provided, that notwithstanding this Section 4.01, the
prior written consent of the Note Insurer must be obtained for any
amendment or change to this Agreement or any Basic Document;
(d) the amendment or other change to this Agreement or any
Basic Document in circumstances where the consent of any Holder or
the Note Insurer is not required and such amendment materially
adversely affects the interest of the Certificateholders;
(e) the appointment pursuant to the Indenture of a successor
Note Registrar, or Indenture Trustee or pursuant to this Agreement
of a successor Certificate Registrar or the consent to the
assignment by the Note Registrar or Indenture Trustee or Certificate
Registrar of its obligations under the Indenture or this Agreement,
as applicable;
(f) the consent to the waiver of any default of any Basic
Document;
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(g) the consent to the assignment by the Indenture Trustee or
Servicer of their respective obligations under any Basic Document;
(h) except as provided in Article IX hereof, dissolve,
terminate or liquidate the Trust in whole or in part;
(i) merge or consolidate the Trust with or into any other
entity, or convey or transfer all or substantially all of the
Trust's assets to any other entity;
(j) cause the Trust to incur, assume or guaranty any
indebtedness other than as set forth in this Agreement or the Basic
Documents;
(k) do any act which would make it impossible to carry on the
ordinary business of the Trust as described in Section 2.03 hereof;
(l) confess a judgment against the Trust;
(m) possess Trust assets, or assign the Trust's right to
property, for other than a Trust purpose;
(n) cause the Trust to lend any funds to any entity; or
(o) change the Trust's purpose and powers from those set forth
in this Trust Agreement.
In addition the Trust shall not commingle its assets with
those of any other entity. The Trust shall maintain its financial and accounting
books and records separate from those of any other entity. Except as expressly
set forth herein, the Trust shall pay its indebtedness, operating expenses and
liabilities from its own funds, and the Trust shall not pay the indebtedness,
operating expenses and liabilities of any other entity. The Trust shall maintain
appropriate minutes or other records of all appropriate actions and shall
maintain its office separate from the offices of the Depositor and the Servicer.
Notwithstanding the other provisions of this Section 4.01, the
Owner Trustee shall not have the power, except upon the written direction of all
of the Certificateholders with the prior written consent of the Note Insurer,
and to the extent otherwise consistent with the Basic Documents, to (i) remove
or replace the Servicer or the Indenture Trustee, (ii) institute proceedings to
have the Trust declared or adjudicated bankrupt or insolvent, (iii) consent to
the institution of bankruptcy or insolvency proceedings against the Trust, (iv)
file a petition or consent to a petition seeking reorganization or relief on
behalf of the Trust under any applicable federal or state law relating to
bankruptcy, (v) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or any similar official) of the Trust or a substantial
portion of the property of the Trust, (vi) make any assignment for the benefit
of the Trust's creditors, (vii) cause the Trust to admit in writing its
inability to pay its debts generally as they become due, (viii) take any action,
or cause the Trust to take any action, in furtherance of any of the foregoing
(any of the above, a "Bankruptcy Action"). So long as the Indenture and the
Insurance Agreement remain in effect and no Note Insurer Default exists, no
Certificateholder
15
shall have the power to take, and shall not take, any Bankruptcy Action with
respect to the Trust or direct the Owner Trustee to take any Bankruptcy Action
with respect to the Trust.
Section 4.02. Action by Holders with Respect to Bankruptcy.
The Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior written consent of
all Certificateholders and the Note Insurer and the delivery to the Owner
Trustee by each such Certificateholder of a certification that such
Certificateholder reasonably believes that the Trust is insolvent.
Section 4.03. Restrictions on Holders' Power. The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Agreement or any of the Basic
Documents or would be contrary to Section 2.03 nor shall the Owner Trustee be
obligated to follow any such direction, if given.
Section 4.04. Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the Holders of Certificates evidencing more than 50%
of the Percentage Interest in each of the Trust Interests and such action shall
be binding upon all Certificateholders. Except as expressly provided herein, any
written notice of the Certificateholders delivered pursuant to this Agreement
shall be effective if signed by Holders of Certificates evidencing more than 50%
of the Percentage Interest in each of the Trust Interests at the time of the
delivery of such notice and such action shall be binding upon all
Certificateholders.
ARTICLE V
TAX PROVISIONS; CERTAIN DUTIES
Section 5.01. Federal Income Tax Provisions. If the Trust is
treated as a partnership (rather than disregarded as a separate entity) for
federal income tax purposes pursuant to Section 2.06, the following provisions
shall apply:
(a) A separate capital account (a "Capital
Account") shall be established and maintained for each
Certificateholder by the Depositor, in accordance with
Treasury Regulations Section 1.704-1 (b)(2)(iv). No
Certificateholder shall be entitled to interest on its Capital
Account or any capital contribution made by such Holder to the
Trust.
(b) Upon termination of the Trust pursuant
to Article IX, any amounts available for distribution to
Holders shall be distributed to the Holders with positive
Capital Account balances in accordance with such balances. For
purposes of this Section 5.01(b), the Capital Account of each
Holder shall be determined after all adjustments made in
accordance with this Section 5.01 resulting from the Trust's
operations and from all sales and dispositions of all or any
part of the assets of the Trust. Any distributions pursuant to
this Section 5.01(b) shall be made by the end of the Taxable
Year in which the termination occurs (or, if later, within 90
days after the date of the termination).
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(c) No Certificateholder shall be required
to restore any deficit balance in its Capital Account.
Furthermore, no Holder shall be liable for the return of the
Capital Account of, or of any capital contribution made to the
Trust by, another Holder.
(d) Profit and loss of the Trust for each
Taxable Year shall be allocated to the Certificateholders in
accordance with their respective Percentage Interests.
(e) Notwithstanding any provision to the
contrary, (i) any expense of the Trust that is a "nonrecourse
deduction" within the meaning of Treasury Regulations Section
1.704-2(b)(1) shall be allocated in accordance with the
Holders' respective Percentage Interests, (ii) any expense of
the Trust that is a "partner nonrecourse deduction" within the
meaning of Treasury Regulations Section 1.704-2(i)(2) shall be
allocated in accordance with Treasury Regulations Section
1.704-2(i)(1), (iii) if there is a net decrease in Trust
Minimum Gain within the meaning of Treasury Regulations
Section 1.704-2(f)(1) for any Taxable Year, items of gain and
income shall be allocated among the Holders in accordance with
Treasury Regulations Section 1.704-2(f) and the ordering rules
contained in Treasury Regulations Section 1.704-2(i), and (iv)
if there is a net decrease in Holder Nonrecourse Debt Minimum
Gain within the meaning of Treasury Regulations Section
1.704-2(i)(4) for any Taxable Year, items of gain and income
shall be allocated among the Holders in accordance with
Treasury Regulations Section 1.704-2(i)(4) and the ordering
rules contained in Treasury Regulations Section 1.704-2(j). A
Holder's "interest in partnership profits" for purposes of
determining its share of the nonrecourse liabilities of the
Trust within the meaning of Treasury Regulations Section
1.752-3(a)(3) shall be such Holder's Percentage Interest.
(f) If a Holder receives in any Taxable Year
an adjustment, allocation, or distribution described in
subparagraphs (4), (5), or (6) of Treasury Regulations Section
1.704-l(b)(2)(ii)(d) that causes or increases a negative
balance in such Holder's Capital Account that exceeds the sum
of such Holder's shares of Trust Minimum Gain and Holder
Nonrecourse Debt Minimum Gain, as determined in accordance
with Treasury Regulations Sections 1.704-2(g) and 1.704-2(i),
such Holder shall be allocated specially for such Taxable Year
(and, if necessary, later Taxable Years) items of income and
gain in an amount and manner sufficient to eliminate such
negative Capital Account balance as quickly as possible as
provided in Treasury Regulations Section 1.704-l(b)(2)(ii)(d).
After the occurrence of an allocation of income or gain to a
Holder in accordance with this Section 5.01(f), to the extent
permitted by Regulations Section 1.704-l(b), items of expense
or loss shall be allocated to such Holder in an amount
necessary to offset the income or gain previously allocated to
such Holder under this Section 5.01(f).
(g) Loss shall not be allocated to a Holder
to the extent that such allocation would cause a deficit in
such Holder's Capital Account (after reduction to reflect the
items described in Treasury Regulations Section
1.704-l(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of
such Holder's shares of Trust Minimum Gain and Holder
Nonrecourse Debt Minimum Gain. Any loss in excess of that
limitation shall be allocated to all the Holders in accordance
with their respective Percentage Interests. After the
occurrence of an allocation of loss to a Holder in accordance
with this Section 5.01(g), to the extent permitted by Treasury
Regulations Section 1.704-l(b), profit shall be allocated to
such
17
Holder in an amount necessary to offset the loss previously
allocated to such Holder under this Section 5.01(g).
(h) If a Holder transfers any part or all of
its Percentage Interest and the transferee is admitted as a
Holder as provided herein (a "Transferee Holder"), the
distributive shares of the various items of profit and loss
allocable among the Holders during such Taxable Year shall be
allocated between the transferor and the Transferee Holder (at
the election of the Holders (including the transferor, but
excluding the Transferee Holder)) either (i) as if the Taxable
Year had ended on the date of the transfer or (ii) based on
the number of days of such Taxable Year that each was a Holder
without regard to the results of Trust activities in the
respective portions of such Taxable Year in which the
transferor and Transferee Holder were Holders.
(i) "Profit" and "loss" and any items of
income, gain, expense or loss referred to in this Section 5.01
shall be determined in accordance with federal income tax
accounting principles as modified by Treasury Regulations
Section 1.704-l(b)(2)(iv), except that profits and losses
shall not include items of income, gain, and expense that are
specially allocated pursuant to Sections 5.01(e), 5.01(f) or
5.01(g) hereof. All allocations of income, profits, gains,
expenses, and losses (and all items contained therein) for
federal income tax purposes shall be identical to all
allocations of such items set forth in this Section 5.01,
except as otherwise required by Section 704(c) of the Code and
Section 1.704-l(b)(4) of the Treasury Regulations.
(j) The taxable year of the Trust (the
"Taxable Year") shall be the calendar year or such other
taxable year as may be required by Section 706(b) of the Code.
(k) At the Trust's expense, the Depositor
shall (i) prepare, or cause to be prepared, and file or cause
to be filed such tax returns relating to the Trust (including
a partnership information return, IRS Form 1065) as are
required by applicable federal, state, and local law, (ii)
cause such returns to be signed in the manner required by law,
(iii) make such elections as may from time to time be required
or appropriate under any applicable law so as to maintain the
Trust's classification as a partnership for tax purposes, (iv)
prepare and deliver, or cause to be prepared and delivered, to
the Holders, no later than 120 days after the close of each
Taxable Year (or no later than April 15th), a Schedule K-1, a
copy of the Trust's informational tax return (IRS Form 1065),
and such other reports (collectively, the "Annual Tax
Reports") setting forth in sufficient detail all such
information and data with respect to the transactions effected
by or involving the Trust during such Taxable Year as shall
enable each Holder to prepare its federal, state, and local
income tax returns in accordance with the laws then
prevailing, and (v) collect, or cause to be collected, any
withholding tax as described in Section 5.02(c) with respect
to income or distributions to Certificateholders.
(l) The Depositor shall, if required, be
designated as the tax matters partner for the Trust within the
meaning of Section 6231(a)(7) of the Code (the "Tax Matters
Partner"). The Tax Matters Partner shall have the right and
obligation to take all actions authorized and required,
respectively, by the Code for the Tax Matters Partner. The Tax
Matters Partner shall have the right to retain professional
assistance in respect of any
18
audit or controversy proceeding initiated with respect to the
Trust by the Internal Revenue Service or any state or local
taxing authority, and all expenses and fees incurred by the
Tax Matters Partner on behalf of the Trust shall constitute
expenses of the Trust. In the event the Tax Matters Partner
receives notice of a final partnership adjustment under
Section 6223(a)(2) of the Code, the Tax Matters Partner shall
either (i) file a court petition for judicial review of such
adjustment within the period provided under Section 6226(a) of
the Code, a copy of which petition shall be mailed to all
other Holders on the date such petition is filed, or (ii) mail
a written notice to all other Holders, within such period,
that describes the Tax Matters Partner's reasons for
determining not to file such a petition.
(m) Except as otherwise provided in this
Section 5.01 and Section 6.06, the Holders shall instruct the
Depositor in writing as to whether to make any available
election under the Code or any applicable state or local tax
law on behalf of the Trust.
Section 5.02. Withholding Taxes. In the event that any
withholding tax is imposed under federal, state, or local law on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to such Certificateholder in accordance with
this Section 5.02. The Indenture Trustee, on behalf of the Owner Trustee, is
hereby authorized and directed to retain in the Distribution Account from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Indenture Trustee from contesting any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The Certificate Registrar will
provide the Indenture Trustee with a statement indicating the amount of any such
withholding tax. The amount of any withholding tax imposed with respect to a
Certificateholder shall be treated as cash distributed to such Certificateholder
at the time it is withheld by the Indenture Trustee and remitted to the
appropriate taxing authority from the Distribution Account at the direction of
the Indenture Trustee, on behalf of the Owner Trustee. If there is a possibility
that withholding tax is payable with respect to a distribution (such as a
distribution to a Certificateholder who is a Non-U.S. Person), the Indenture
Trustee may in its sole discretion withhold such amounts in accordance with this
paragraph (c). In the event that a Certificateholder wishes to apply for a
refund of any such withholding tax, the Owner Trustee and the Indenture Trustee
shall reasonably cooperate with such Certificateholder in making such claim so
long as such Certificateholder agrees in writing to reimburse the Owner Trustee
for any out-of-pocket expenses incurred.
Any Holder which is organized under the laws of a jurisdiction
outside the United States shall, on or prior to the date such Holder becomes a
Holder, (a) so notify the Owner Trustee and the Indenture Trustee, on behalf of
the Trust, (b) (i) provide the Owner Trustee and the Indenture Trustee, on
behalf of the Trust, with Internal Revenue Service form 1001, 4224, 8709 or W-8,
as appropriate, or (ii) notify the Owner Trustee and the Indenture Trustee, on
behalf of the Trust, that it is not entitled to an exemption from United States
withholding tax or a reduction in the rate thereof on payments of interest. Any
such Holder agrees by its acceptance of a Certificate, on an ongoing basis, to
provide like certification for each taxable year and to notify the Owner Trustee
and the Indenture Trustee, on behalf of the Trust, should subsequent
circumstances arise affecting the information provided. The Trust, the Owner
Trustee and the
19
Indenture Trustee shall be fully protected in relying upon, and each Holder by
its acceptance of a Certificate hereunder agrees to indemnify and hold the
Trust, the Owner Trustee and the Indenture Trustee harmless against all claims
or liability of any kind arising in connection with or related to their reliance
upon any documents, forms or information provided by any Holder. In addition, if
the Indenture Trustee has not withheld taxes on any payment made to any Holder,
and the Indenture Trustee is subsequently required to remit to any taxing
authority any such amount not withheld, such Holder shall return such amount to
the Indenture Trustee upon written demand by the Indenture Trustee. Neither the
Owner Trustee nor the Indenture Trustee shall be liable for damages to any
Holder due to a violation of the Code unless and only to the extent such
liability is caused by the Owner Trustee's or the Indenture Trustee's failure to
act in accordance with its standard of care under this Agreement.
Section 5.03. Accounting and Records to the Noteholders,
Owners, the Internal Revenue Service and Others. The Depositor shall (i)
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 5.01, (ii) deliver (or cause to be
delivered) to each Holder, 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 Holder to prepare its Federal and state
income tax returns and (iii) 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. The Owner Trustee or the Servicer,
as the case may be, shall make all elections pursuant to this Section 5.03 as
directed in writing by the Depositor. An Authorized Officer of the Trust shall
sign all tax information returns, if any, filed pursuant to this Section 5.03
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 Depositor or the Servicer. The Depositor 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 Depositor shall
not make the election provided under Section 754 of the Code.
Section 5.04. Signature on Returns. Notwithstanding the
provisions of Section 5.03 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 Holder to sign such
documents, in which case such documents shall be signed by the Holders.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01. General Authority. The Owner Trustee is
authorized and directed to execute and deliver or cause to be executed and
delivered the Notes, the Certificates and the Basic Documents to which the Trust
is to be a party and each certificate or other document attached as an exhibit
to or contemplated by the Basic Documents to which the Trust is to be a party
and any amendment or other agreement or instrument described in Article III, in
20
each case, in such form as the Depositor and the Owner Trustee shall approve, as
evidenced conclusively by the Owner Trustee's execution thereof. In addition,
the Owner Trustee is authorized and directed, on behalf of the Trust, to execute
and deliver to the Authenticating Agent the Trust Request and the Trust Orders
referred to in Section 2.11 of the Indenture, directly to the Authenticating
Agent to authenticate and deliver Class A-1 Notes in the Original Note Principal
Balance of $__________, and Class A-2 Notes in the Original Note Principal
Balance of $__________. In addition to the foregoing, the Owner Trustee is
authorized, but shall not be obligated, to take all actions required of the
Trust, pursuant to the Basic Documents.
Section 6.02. General Duties. (a) It shall be the duty of the
Owner Trustee:
(i) to discharge (or cause to be discharged)
all of its responsibilities pursuant to the terms of this
Agreement and the Basic Documents to which the Trust is a
party and to administer the Trust in the interest of the
Certificateholders, subject to the Basic Documents and in
accordance with the provisions of this Agreement; and
(ii) to obtain and preserve the Trust's
qualification to do business in the State of Delaware.
(b) The Owner Trustee shall not be responsible for taking any
action on behalf of the Trust under any Basic Document unless specifically
directed in writing to do so in accordance with Section 6.03 of this Agreement.
(c) The Owner Trustee shall not be responsible for any matter
regarding the Securities Act, the Exchange Act or the Investment Company Act of
1940, as amended, or the rules or regulations thereunder.
Section 6.03. Action upon Instruction. (a) Subject to Article
IV hereof, and in accordance with the terms of the Basic Documents, the
Certificateholders may by written instruction direct the Owner Trustee in the
management of the Trust but only to the extent consistent with the limited
purpose of the Trust. Such direction may be exercised at anytime by written
instruction of the Certificateholders pursuant to Article IV hereof. Without
limiting the generality of the foregoing, the Owner Trustee shall act as
directed by the Certificateholders in connection with Note redemptions requested
by the Certificateholders, and shall take all actions and deliver all documents
that the Trust is required to take and deliver in accordance with Section 4.01
and Article X of the Indenture in order to effect any redemption requested by
the 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 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) Subject to Article IV hereof, whenever the Owner Trustee
is unable to decide between alternative courses of action permitted or required
by the terms of this Agreement or under any Basic Document, the Owner Trustee
shall promptly give notice (in such form as shall be appropriate under the
circumstances) to the Certificateholders and the Note
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Insurer requesting instruction from the Certificateholders as to the course of
action to be adopted, and to the extent the Owner Trustee acts in good faith in
accordance with any written instruction of the Certificateholders 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
(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 Certificateholders, and shall have no liability to
any Person for such action or inaction.
(d) Subject to Article IV hereof, 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 Certificateholders requesting instruction and, to the extent that the
Owner Trustee acts or refrains from acting in good faith in accordance with any
such instruction received, 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 ten (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
Certificateholders, and shall have no liability to any Person for such action or
inaction.
Section 6.04. No Duties Except as Specified in this Agreement,
the Basic Documents or any 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 Trust is a party, except as
expressly provided by the terms of this Agreement, any Basic Document or in any
document or written instruction received by the Owner Trustee pursuant to
Section 6.03; and no implied duties or obligations shall be read into this
Agreement or any Basic Document against the Owner Trustee. The Owner Trustee
shall have no responsibility for filing any financing or continuation statement
in any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder or to
prepare or file any Securities and Exchange Commission filing for the Trust or
to record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee in its
individual capacity that are not related to the ownership or the administration
of the Owner Trust Estate.
Section 6.05. 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
22
the Basic Documents and (iii) in accordance with any document or instruction
delivered to the Owner Trustee pursuant to Section 6.03.
Section 6.06. Restrictions. Other than with respect to actions
expressly provided for herein, neither the Owner Trustee nor the Depositor shall
take any action (a) that violates or results in a breach of or is inconsistent
with the purposes of the Trust set forth in Section 2.03 or (b) that, to the
actual knowledge of the Depositor and the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee or the Depositor to take
action that would violate the provisions of this Section 6.06.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.01. Acceptance of Trusts and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this Agreement
and the Basic Documents. The Owner Trustee also agrees to disburse all moneys
actually received by it constituting part of the 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 breach or misconduct or gross
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.03 expressly made by the Owner Trustee in its
individual capacity. In particular, but not by way of limitation (and subject to
the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable
for any error of judgment made by a Responsible Officer of the
Owner Trustee;
(b) the Owner Trustee shall not be liable
with respect to any action taken or omitted to be taken by it
in accordance with the instructions of the Depositor, the
Certificateholders or the Note Insurer given in accordance
with this Agreement;
(c) no provision of this Agreement or any
Basic Document shall require the Owner Trustee to expend or
risk funds or otherwise incur any financial liability in the
performance of any of its rights or powers hereunder or under
any Basic Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably
assured or provided to it;
(d) under no circumstances shall the Owner
Trustee be liable for indebtedness evidenced by or arising
under any of the Basic Documents, including the principal of
and interest on the Notes;
(e) the Owner Trustee shall not be
responsible for or in respect of the validity or sufficiency
of this Agreement or for the due execution hereof by the
Depositor or for the form, character, genuineness,
sufficiency, value or validity of any of the Owner Trust
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Estate or for or in respect of the validity or sufficiency of
the Basic Documents, other than the certificate of
authentication on the Certificates, and the Owner Trustee
shall in no event assume or incur any liability, duty, or
obligation to any Noteholder or to any 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 Depositor, the Indenture
Trustee, the Collateral Agent, or the Servicer under any of
the Basic Documents or otherwise and the Owner Trustee shall
have no obligation or liability to perform the obligations of
the Trust under this Agreement or the Basic Documents that are
required to be performed by the Indenture Trustee, the
Servicer or the Collateral Agent;
(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 Depositor, any of the Certificateholders or
the Note Insurer, unless such Certificateholders, the
Depositor or the Note Insurer have offered to the Owner
Trustee security or indemnity reasonably satisfactory to it
against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of
the Owner Trustee to perform any discretionary act enumerated
in this Agreement or in any Basic Document shall not be
construed as a duty, and the Owner Trustee shall not be
answerable for other than its gross negligence or willful
breach or misconduct in the performance of any such act; and
(h) notwithstanding anything contained
herein to the contrary, neither __________________________ nor
the Owner Trustee shall be required to take any action in any
jurisdiction other than in the State of ________ if the taking
of such action will (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 ________; (ii) result in
any fee, tax or other governmental charge under the laws of
any jurisdiction or any political subdivisions thereof in
existence on the date hereof other than the State of ________
becoming payable by _______________________________; or (iii)
subject ______________________________________to personal
jurisdiction in any jurisdiction other than the State of
________ for causes of action arising from acts unrelated to
the consummation of the transactions by
____________________________ or the Owner Trustee, as the case
may be, contemplated hereby. The Owner Trustee shall be
entitled to obtain advice of counsel (which advice shall be an
expense of the Servicer) to determine whether any action
required to be taken pursuant to this Agreement or the other
Basic Documents results in the consequences described in
clauses (i), (ii) and (iii) of the preceding sentence. In the
event that said counsel advises the Owner Trustee that such
action will result in such consequences, the Owner Trustee
will appoint an additional trustee pursuant to Section 10.05
hereof to proceed with such action.
Section 7.02. Furnishing of Documents. The Owner Trustee shall
furnish to the Certificateholders promptly upon receipt of a written request
therefor, duplicates or copies of
24
all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents. On behalf of the Owner Trustee, the
Depositor shall furnish to Noteholders promptly upon written request therefor,
copies of the Sale and Servicing Agreement and the Indenture.
Section 7.03. Representations and Warranties. The Owner
Trustee hereby represents and warrants to the Depositor and the
Certificateholders, that:
(a) It is a national banking association
duly organized and validly existing in good standing under the
laws of the United States of America. 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.
(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 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.
Section 7.04. 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, Note, or other document or paper believed by it to be genuine and
believed by it to be signed by the proper party or parties. The Owner Trustee
may accept a certified copy of a resolution of the board of directors or other
governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which is
not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer or other authorized officers of the relevant party, as to such
fact or matter and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, Accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the
25
written opinion or advice of any such counsel, Accountants or other such persons
and not contrary to this Agreement or any Basic Document.
Section 7.05. Not Acting in Individual Capacity. Except as
provided in Section 7.03, in accepting the trusts hereby created,
____________________ 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 7.06. Owner Trustee Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates (other
than the signature and countersignature of the Owner Trustee on the
Certificates) shall be taken as the statements of the Depositor, and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement, of
any Basic Document or of the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates and as specified in
Section 7.03) or the Notes, or of any Mortgage Loans or related documents. The
Owner Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any 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 Certificateholders under this Agreement or the
Noteholders under the Indenture, including, without limitation, the existence,
condition and ownership of any Mortgaged Property, the existence and
enforceability of any insurance thereon, the existence and contents of any
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 Depositor or the Servicer with any warranty
or representation made under any Basic Document or in any related document or
the accuracy of any such warranty or representation or any action of the
Indenture Trustee or the Servicer or any subservicer taken in the name of the
Owner Trustee.
Section 7.07. Owner Trustee May Own Certificates and Notes.
The Owner Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates or Notes and may deal with the Depositor, the
Indenture Trustee and the Servicer in banking transactions with the same rights
as it would have if it were not Owner Trustee.
Section 7.08. Licenses. The Depositor shall cause the Trust to
use its best efforts to obtain and maintain the effectiveness of any licenses
required in connection with this Agreement and the Basic Documents and the
transactions contemplated hereby and thereby until such time as the Trust shall
terminate in accordance with the terms hereof.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.01. Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder such fees as
have been separately agreed upon
26
before the date hereof between the Servicer and the Owner Trustee, and the Owner
Trustee shall be entitled to be reimbursed by the Servicer for its other
reasonable expenses hereunder as separately agreed.
Section 8.02. Indemnification. The Certificateholders shall be
liable as obligor for, and shall indemnify the Owner Trustee (in its individual
and trust capacities) and its successors, assigns, agents and servants
(collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may at any time be imposed on, incurred by, or asserted
against 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 Certificateholders shall not be liable for or required to
indemnify an Indemnified Party from and against Expenses arising or resulting
from any of the matters described in the third sentence of Section 7.01. The
indemnities contained in this Section 8.02 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 Certificateholders will be entitled to participate
therein, with counsel selected by such Holders and reasonably satisfactory to
the Indemnified Parties, but after notice from an Indemnified Party to the
Certificateholders of its election to assume the defense thereof, the
Certificateholders shall not be liable to the Indemnified Party under this
Section 8.02 for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense of such action; provided,
however, that this sentence shall not be in effect if (1) the Certificateholders
shall not have employed counsel reasonably satisfactory to the Indemnified Party
to represent the Indemnified Party within a reasonable time after notice of
commencement of the action, (2) the Certificateholders shall have authorized the
employment of counsel for the Indemnified Party at the expense of the
Certificateholders or (3) in the event any such claim involves a possible
imposition of criminal liability or penalty or a material civil penalty on such
Indemnified Party, a conflict of interest between such Indemnified Party and the
Certificateholders or another indemnitee or the granting of material injunctive
relief against such Indemnified Party, and such Indemnified Party informs the
Certificateholders that such Indemnified Party desires to be represented by
separate counsel, in which case, the reasonable fees and expenses of such
separate counsel shall be born by the Certificateholders. If the
Certificateholders assume the defense of any such proceeding, they shall be
entitled to settle such proceeding without any liability being assessed against
any Indemnified Party or, if such settlement provides for release of any such
Indemnified Party without any liability being assessed against any Indemnified
Party in connection with all matters relating to the proceeding which have been
asserted against such Indemnified Party in such proceeding by the other parties
to such settlement, without the prior written consent of such Indemnified Party,
but otherwise only with the prior written consent of such Indemnified Party.
Certificateholders shall be liable for this indemnification obligation pro rata,
based upon their respective Percentage Interests.
Section 8.03. Payments to the Owner Trustee. Any amounts paid
to the Owner Trustee pursuant to this Article VIII shall be deemed not to be a
part of the Owner Trust Estate immediately after such payment.
27
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section 8.02. Termination of Trust Agreement. (a) This
Agreement (other than Article VIII) and the Trust shall terminate and be of no
further force or effect on the earlier of: (i) the final payment or other
liquidation of the Mortgage Loans and the disposition of all REO Properties and
the remittance of all funds due hereunder with respect to such Mortgage Loans
and REO Properties or the disposition of the Mortgage Loans and REO Properties
at the direction of a majority of the Certificateholders, in either case after
the satisfaction and discharge of the Indenture pursuant to Section 4.01 of the
Indenture; and (ii) the expiration of 21 years from the death of the last
survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ (the late ambassador of the
United States to the Court of St. ▇▇▇▇▇). The bankruptcy, liquidation,
dissolution, death or incapacity of any Certificateholder or the Depositor shall
not (x) operate to terminate this Agreement or the Trust, nor (y) entitle the
Depositor's or such Certificateholder's legal representatives or heirs to claim
an accounting or to take any action or proceeding in any court for a partition
or winding up of 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 Section 9.01(a) above, none of the
Depositor, the Servicer, the Note Insurer nor any Certificateholder shall be
entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Distribution Date upon which the Certificateholders shall surrender their
Certificates to the Indenture Trustee for payment of the final distributions and
cancellation, shall be given by the Owner Trustee to the Certificateholders, the
Note Insurer, the Rating Agencies and the Indenture Trustee mailed within five
(5) Business Days of receipt by the Owner Trustee from the Servicer of notice of
such termination pursuant to Section 9.01(a) above, which notice given by the
Owner Trustee shall state (i) the Distribution Date upon or with respect to
which final payment of the Certificates shall be made upon presentation and
surrender of the Certificates 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 Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates 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 Certificateholders.
The Indenture Trustee shall give notice to the Owner Trustee of each
presentation and surrender of Certificates promptly, and the Indenture Trustee
shall promptly cause to be distributed to the related Certificateholders amounts
distributable on such Distribution Date pursuant to the terms of the Indenture.
(d) Upon the winding up of the Trust in accordance with
Section 3808 of the Business Trust Statute 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.
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ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee. The
Owner Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the Business Trust Statute; authorized to exercise trust
powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or state authorities; and
having (or having a parent that has) a rating of at least "Baa3" by ▇▇▇▇▇'▇ and
"A-1" by S&P (or otherwise acceptable to the Rating Agencies) and being
acceptable to the Note Insurer. If such corporation shall publish reports of
condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section 10.01, 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 10.01,
the Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.02.
Section 10.02. 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 Depositor, the Servicer, the
Indenture Trustee and the Note Insurer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a successor Owner Trustee
(acceptable to the Note Insurer) by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Owner Trustee and one
copy to the successor Owner Trustee. If no successor Owner Trustee shall have
been so appointed and have accepted appointment within thirty (30) days after
the giving of such notice of resignation, the resigning Owner Trustee or the
Note Insurer may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.01 and shall fail to resign after
written request therefor by the Certificateholders or the Servicer, or if at any
time the Owner Trustee shall be legally unable to act, or shall be adjudged
bankrupt or insolvent, or a receiver of the Owner Trustee or of its property
shall be appointed, or any public officer shall take charge or control of the
Owner Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Note Insurer, or the Certificateholders or
the Servicer with the written consent of the Note Insurer, may remove the Owner
Trustee. If the Certificateholders or the Servicer or the Note Insurer shall
remove the Owner Trustee under the authority of the immediately preceding
sentence, the Note Insurer, or the Servicer with the written consent of the Note
Insurer, shall promptly appoint a successor Owner Trustee by written instrument
in duplicate, one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed and one copy to the successor Owner Trustee and payment
of all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section 10.02 shall not become effective until acceptance of appointment by
the successor Owner Trustee pursuant to Section 10.03, written approval by the
Note Insurer and payment of all fees and expenses owed to the outgoing
29
Owner Trustee. The Servicer shall provide notice of such resignation or removal
of the Owner Trustee to each of the Rating Agencies, the Indenture Trustee, the
Collateral Agent and the Note Insurer.
Section 10.03. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 10.02 shall execute, acknowledge and
deliver to the Depositor, the Indenture Trustee, the Note Insurer and to its
predecessor Owner Trustee an instrument accepting such appointment under this
Agreement, and thereupon the resignation or removal of the predecessor Owner
Trustee shall become effective and such successor Owner Trustee (if acceptable
to the Note Insurer), without any further act, deed or conveyance, shall become
fully vested with all the rights, powers, duties, and obligations of its
predecessor under this Agreement, with like effect as if originally named as
Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees and
expenses deliver to the successor Owner Trustee all documents and statements and
moneys held by it under this Agreement; and the Depositor and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties, and
obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Owner Trustee shall be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 10.03, the Depositor shall mail notice of the successor
of such Owner Trustee to all Certificateholders, the Indenture Trustee, the
Collateral Agent, the Noteholders, the Note Insurer and the Rating Agencies. If
the Depositor fails to mail such notice within ten (10) days after acceptance of
appointment by the successor Owner Trustee, the successor Owner Trustee shall
cause such notice to be mailed at the expense of the Depositor.
Any successor Owner Trustee appointed pursuant to this Section
10.03 shall file an amendment to the Certificate of Trust with the Secretary of
State identifying the name and principal place of business of such successor
Owner Trustee in the State of ________.
Section 10.04. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section
10.01, without the execution or filing of any instrument or any further act on
the part of any of the parties hereto, except the filing of an amendment to the
Certificate of Trust, if appropriate, anything herein to the contrary
notwithstanding; provided, further, that the Owner Trustee shall mail notice of
such merger, conversion or consolidation to the Rating Agencies.
Section 10.05. Appointment of Co-Trustee or Separate Trustee
(a) 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
30
Mortgaged Property may at the time be located, and for the purpose of performing
certain duties and obligations of the Owner Trustee with respect to the Trust
and the Certificates, the Owner Trustee shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the Owner
Trustee and acceptable to the Note 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 10.05, such powers, duties, obligations, rights and trusts as the
Note Insurer and the Owner Trustee may consider necessary or desirable. 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 10.01 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.03.
(b) Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provision and
conditions:
(i) all rights, powers, duties and
obligations conferred or imposed upon the Owner Trustee shall
be conferred upon and exercised or performed by the Owner
Trustee and such separate 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
(iii) the Owner Trustee may at any time
accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to the separate trustees and
co-trustees, as if given to each of them. Every instrument appointing any
separate trustee or co-trustee, other than this Agreement, shall refer to this
Agreement and to the conditions of this Article X. Each separate trustee and
co-trustee, upon its acceptance of appointment, shall be vested with the estates
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee.
(d) Any separate trustee or co-trustee may at any time appoint
the Owner Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Agreement on its behalf and in its name. If any separate 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
31
Owner Trustee, to the extent permitted by law, without the appointment of a new
or successor trustee.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Supplements and Amendments. This Agreement may
be amended by the Depositor, and the Owner Trustee, with the prior written
consent of the Note Insurer, and with prior written notice to the Rating
Agencies, but without the consent of any of the Noteholders or the
Certificateholders or the Indenture Trustee, to cure any ambiguity, to correct
or supplement any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions in
this Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided, however, such action shall not adversely
affect in any material respect the interests of any Noteholder or
Certificateholder or the rights of the Note Insurer. An amendment described
above shall be deemed not to adversely affect in any material respect the
interests of any Noteholder if the party requesting the amendment satisfies the
Rating Agency Condition with respect to such amendment.
This Agreement may also be amended from time to time by the
Depositor and the Owner Trustee, with the prior written consent of the Rating
Agencies and with the prior written consent of the Indenture Trustee, the Note
Insurer, the Noteholders evidencing more than 50% of the Outstanding Principal
Balance of the Notes, the Holders of Certificates evidencing more than 50% of
the Percentage Interests of the Trust Interest and if the party requesting such
amendment satisfies the Rating Agency Condition with respect to such amendment,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders; provided,
however, no such amendment shall (a) increase or reduce in any manner the amount
of, or accelerate or delay the timing of, collections of payments on the
Mortgage Loans or distributions that shall be required to be made for the
benefit of the Noteholders, the Certificateholders or the Note Insurer, (b)
reduce the aforesaid percentage of the Outstanding Principal Balance of the
Notes or the Percentage Interests required to consent to any such amendment, in
either case of clause (a) or (b) without the consent of the holders of all the
outstanding Notes, the Note Insurer and the Holders of all the outstanding
Certificates.
Promptly after the execution of any such amendment or consent,
the Depositor shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee, the Note
Insurer and each of the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents (and any other consents of Certificateholders
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may prescribe.
32
Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such amendment
with the Secretary of State.
Prior to the execution of any amendment to this Agreement or
the Certificate of Trust, the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
Section 11.02. No Legal Title to Owner Trust Estate in
Holders. The Certificateholders shall not have legal title to any part of the
Owner Trust Estate. The Certificateholders shall be entitled to receive
distributions with respect to their undivided ownership interest therein only in
accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title, or interest of the 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 11.03. Limitations on Rights of Others. The provisions
of this Agreement are solely for the benefit of the Owner Trustee, the
Depositor, the Certificateholders, the Note Insurer and, to the extent expressly
provided herein, the Indenture Trustee and the Noteholders, and nothing in this
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
Section 11.04. Notices. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been given
if (1) personally delivered, (2) upon receipt by the intended recipient or three
Business Days after mailing if mailed by certified mail, postage prepaid (except
that notice to the Owner Trustee shall be deemed given only upon actual receipt
by the Owner Trustee), (3) sent by express courier delivery service and received
by the intended recipient or (4) except with respect to notices sent to the
Owner Trustee, transmitted by telex or facsimile transmission (or any other type
of electronic transmission agreed upon by the parties and confirmed by a writing
delivered by any of the means described in (1), (2) or (3), at the following
addresses: (i) if to the Owner Trustee, at its Corporate Trust Office; (ii) if
to the Note Insurer, _____________________________; (iii) if to the Depositor,
or, as to each such party, at such other address as shall be designated by such
party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder 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
Certificateholder receives such notice.
Section 11.05. 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
33
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 11.06. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 11.07. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Depositor, the Note Insurer, the Owner Trustee and its successors and each
owner and its successors and permitted assigns, all as herein provided. Any
request, notice, direction, consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such
Certificateholder.
Section 11.08. No Petition. The Owner Trustee, by entering
into this Agreement, each Certificateholder, by accepting a Certificate, and the
Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Depositor or the Trust, or join in any institution against the
Depositor or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy law in connection with any obligations
relating to the Certificates, the Notes, this Agreement or any of the Basic
Documents.
Section 11.09. No Recourse. Each Certificateholder by
accepting a Certificate acknowledges that such Certificateholder's Certificate
represents a beneficial interest in the Trust only and does not represent an
interest in or an obligation of the Servicer, theDepositor, the Owner Trustee 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 Certificates or the Basic Documents.
Section 11.10. Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
Section 11.11. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
Section 11.12. Grant of Certificateholder Rights to Note
Insurer. (a) In consideration for the issuance of the Certificates and for the
guarantee of the Notes by the Note Insurer pursuant to the Note Insurance
Policy, the Holders of the Certificates hereby grant to the Note Insurer the
right to act as the Holder of 100% of the outstanding Certificates for the
purpose of exercising the rights hereunder of the Certificateholders under this
Agreement without the consent of the Certificateholders, including the voting
rights of such Holders hereunder, but
34
excluding those rights requiring the consent of all such Holders, and any rights
of such Holders to distributions under the Indenture; provided, that the
preceding grant of rights to the Note Insurer by the Holders of the Certificates
shall be subject to Section 11.14.
(b) The rights of the Note Insurer to direct certain actions
and consent to certain actions of the Certificateholders hereunder will
terminate at such time as the outstanding Principal Balance of the Notes has
been reduced to zero and the Note Insurer has been reimbursed for any amounts
owed under the Note Insurance Policy and the Insurance Agreement and the Note
Insurer has no further obligation under the Note Insurance Policy.
(c) The duties and responsibilities of the Owner Trustee shall
be limited to those expressly provided for in this Agreement. The parties hereto
agree that except for purposes of the foregoing sentence, the Owner Trustee
shall have no management responsibilities or owe any fiduciary duties to the
Note Insurer (or the Noteholders in the event they succeed to the Note Insurer's
rights).
(d) Whenever in connection with its performance under this
Agreement the Owner Trustee receives inconsistent notices or advice from the
Note Insurer and the Certificateholders, the Owner Trustee shall, in the absence
of a Note Insurer Default, take the action required by the notices or advice
received from the Note Insurer.
Section 11.13. Third-Party Beneficiary. The Indenture Trustee
and the Note Insurer are intended third-party beneficiaries of this Agreement,
and this Agreement shall be binding upon and inure to the benefit of the
Indenture Trustee and the Note Insurer; provided, that, notwithstanding the
foregoing, for so long as a Note Insurer Default is continuing with respect to
its obligations under the Note Insurance Policy, the Certificateholders shall
succeed to the Note Insurer's rights hereunder. Without limiting the generality
of the foregoing, all covenants and agreements in this Agreement that expressly
confer rights upon the Note Insurer shall be for the benefit of and run directly
to the Note Insurer, and the Note Insurer shall be entitled to rely on and
enforce such covenants to the same extent as if it were a party to this
Agreement.
Section 11.14. Suspension and Termination of Note Insurer's
Rights. During the continuation of a Note Insurer Default, rights granted or
reserved to the Note Insurer hereunder shall vest instead in the
Certificateholders; provided, that the Note Insurer shall be entitled to any
distributions of reimbursements as set forth in the Insurance Agreement and the
Note Insurer shall retain those rights under Section 11.01 to consent to any
amendment of this Agreement.
At such time as either (i) the outstanding Note Principal
Balance of the Notes has been reduced to zero or (ii) the Note Insurance Policy
has been terminated and in either case of (i) or (ii) the Note Insurer has been
reimbursed for all amounts owed under the Note Insurance Policy and the
Insurance Agreement (and the Note Insurer no longer has any obligation under the
Note Insurance Policy, except for breach thereof by the Note Insurer), then the
rights and benefits granted or reserved to the Note Insurer hereunder (including
the rights to direct certain actions and receive certain notices) shall
terminate and the Certificateholders shall be entitled to
35
the exercise of such rights and to receive such benefits of the Note Insurer
following such termination to the extent that such rights and benefits are
applicable to the Certificateholders.
Section 11.15. 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, the Depositor 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.
[Remainder of Page Intentionally Left Blank]
36
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
_____________________________, as Depositor
By: _______________________________________
Name:
Title:
______________________________, not in its
individual capacity but solely as Owner
Trustee under the Trust Agreement
By: _______________________________________
Name:
Title:
37
EXHIBIT A-1
FORM OF CERTIFICATE
POOL [I] [II] CERTIFICATE
THE EQUITY INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR ANY STATE SECURITIES LAWS. THIS EQUITY INTEREST MAY BE DIRECTLY OR
INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE
HOLDER HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) A PERSON INVOLVED IN THE
ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN
THE MEANING OF RULE 3A-7 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED
(INCLUDING, BUT NOT LIMITED TO, ___________________) IN A TRANSACTION THAT IS
REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS. NO PERSON IS
OBLIGATED TO REGISTER THIS EQUITY INTEREST UNDER THE ACT OR ANY STATE SECURITIES
LAWS.
NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN SHALL BE MADE
TO ANY PERSON UNLESS THE OWNER TRUSTEE HAS RECEIVED A REPRESENTATION LETTER FROM
THE TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE (I) IS NOT A PERSON WHICH IS
AN EMPLOYEE BENEFIT PLAN, TRUST OR ACCOUNT SUBJECT TO TITLE I OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE CODE OR A GOVERNMENTAL PLAN, AS DEFINED IN SECTION 3(32) OF ERISA, SUBJECT
TO ANY FEDERAL, STATE OR LOCAL LAW WHICH IS, TO A MATERIAL EXTENT, SIMILAR TO
THE FOREGOING PROVISIONS OF ERISA OR THE CODE (ANY SUCH PERSON BEING A "PLAN"),
(II) IS NOT AN ENTITY, INCLUDING AN INSURANCE COMPANY SEPARATE ACCOUNT OR
GENERAL ACCOUNT, WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF A
PLAN'S INVESTMENT IN THE ENTITY AND (III) IS NOT DIRECTLY OR INDIRECTLY
PURCHASING THIS CERTIFICATE OR A BENEFICIAL INTEREST HEREIN ON BEHALF OR, AS
INVESTMENT MANAGER OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN.
THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS,
PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE OWNER TRUSTEE
AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT SUCH TRANSFEREE (A)
AGREES TO BE BOUND BY
A-1
AND TO ABIDE BY THE TRANSFER RESTRICTIONS APPLICABLE TO THIS CERTIFICATE; (B) IS
NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS NOMINEE TO FACILITATE THE
CLEARANCE AND SETTLEMENT OF SUCH SECURITY THROUGH ELECTRONIC BOOK-ENTRY CHANGES
IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS; AND (C) UNDERSTANDS THAT IT MUST
TAKE INTO ACCOUNT ITS PERCENTAGE INTEREST OF THE TAXABLE INCOME RELATING TO THIS
CERTIFICATE.
A-2
Pool [I][II] Certificate No. 1 Percentage Interest:
THIS CERTIFIES THAT ______________ (the "Holder") is the
registered owner of a ___% Percentage Interest of the related Trust Interest in
___________________________ (the "Trust") existing under the laws of the State
of Delaware and created pursuant to that certain Trust Agreement, dated as of
______________ (the "Trust Agreement"), by and among
____________________________________, as Depositor, and
_________________________, not its individual capacity but solely as owner
trustee under the Trust Agreement (the "Owner Trustee"). Capitalized terms used
but not otherwise defined herein have the meanings assigned to such terms in the
Trust Agreement. The Owner Trustee, on behalf of the Trust and not in its
individual capacity, has executed this Certificate by one of its duly authorized
signatories as set forth below. This Certificate is one of the Certificates
referred to in the Trust Agreement and is issued under and is subject to the
terms, provisions and conditions of the Trust Agreement to which the Holder of
this Certificate by virtue of the acceptance hereof agrees and by which the
Holder hereof is bound. Reference is hereby made to the Trust Agreement for the
rights of the Holder of this Certificate, as well as for the terms and
conditions of the Trust created by the Trust Agreement.
The recitals contained herein (other than the signature and
countersignature of the Owner Trustee) shall be taken as the statements of the
Depositor, and the Owner Trustee assumes no responsibility for the correctness
thereof.
The Holder, by its acceptance hereof, agrees not to transfer
this Certificate except in accordance with terms and provisions of the Trust
Agreement.
The Holder, by its acceptance hereof, acknowledges that such
Holder's Certificate represents a beneficial interest in the Trust only and does
not represent an interest in or an obligation of the Servicer, the Depositor,
the Owner Trustee 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 herein, in the Trust Agreement or the other Basic Documents.
THIS 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.
A-3
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Certificate to be duly
executed.
___________________________________________
By: _______________________________________,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement
By: _______________________________________
Authorized Signatory
Dated:
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Trust Agreement.
__________________________________________,
not in its individual capacity but solely
as Owner Trustee under the Trust Agreement,
as Authenticating Agent
By: _______________________________________
Authorized Signatory
Dated:
A-4
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 Instrument, and all rights thereunder, hereby irrevocably
constituting and appointing __________ Attorney to transfer said Instrument 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 as it
appears upon the face of the within Instrument in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-5
EXHIBIT B
FORM OF CERTIFICATE OF TRUST
CERTIFICATE OF TRUST OF
--------------------------------
THIS CERTIFICATE OF TRUST OF _________________________________
(the "Trust"), dated as of_____________________________, is being duly executed
and filed by __________________________________________, a _________ banking
association, as owner trustee (the "Owner 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
_____________________________________________________.
2. Delaware Trustee. The name and business address of the
Owner Trustee of the Trust in the State of Delaware is
__________________________________________, Attention: Corporate
Trust Administration.
3. Effective Date. This Certificate of Trust shall be
effective at 9:00 a.m. on ________________.
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.
_____________________________________, not in
its individual capacity but solely as Owner
Trustee under a Trust Agreement, dated as of
___________.
By: _________________________________________
Name:
Title:
B-1
EXHIBIT C
FORM OF INVESTMENT LETTER
___________________, ____
[Trust]
[Owner Trustee]
Re: ___________ (the "Trust")
Mortgage Backed Notes, Series ____
Ladies and Gentlemen:
_________________________________________ (the "Holder") has
purchased or acquired, or intends to purchase or acquire from ________________,
the current Holder (the "Current Holder"), a Pool [I][II] Certificate
representing a ___% Percentage Interest (the "___% Certificate") in the related
Trust Interest for the referenced Trust, which represents an interest in the
Trust created pursuant to that certain Trust Agreement, dated as of _______ (the
"Trust Agreement"), by and among _______________, as Depositor, _________,
and____________, as Owner Trustee. Capitalized terms used and not otherwise
defined herein have the meanings assigned to such terms in the Trust Agreement.
CERTIFICATION
The undersigned, as an authorized officer or agent of the
Holder, hereby certifies, represents, warrants and agrees on behalf of the
Holder as follows:
1. The Holder is duly organized, validly existing and in good
standing under the laws of the jurisdiction in which it was formed and is
authorized to invest in the ___% Certificate. The person executing this letter
on behalf of the Holder is duly authorized to do so on behalf of the Holder.
2. The Holder hereby acknowledges that no transfer of the ___%
Certificate may be made unless such transfer is exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Securities Act");
and applicable state securities laws, or is made in accordance with the
Securities Act and such laws.
3. The Holder understands that the ___% Certificate has not
been and will not be registered under the Securities Act and may be offered,
sold, pledged or otherwise transferred apply to a person whom the transferor
reasonably believes is (A) a qualified institutional buyer (as defined in Rule
144A under the Securities Act) or (B) a Person involved in the organization or
operation of the Trust or an affiliate of such Person, in a transaction meeting
the requirements of Rule 144A under the Securities Act and in accordance with
any applicable securities laws of
44
any state of the United States. The Holder understands that the ___% Certificate
bears a legend to the foregoing effect.
4. The Holder is acquiring the ___% Certificate for its own
account or for accounts for which it exercises sole investment discretion, and
not with a view to or for sale or other transfer in connection with any
distribution of the ___% Certificate in any manner that would violate Section 5
of the Securities Act or any applicable state securities laws, subject
nevertheless to any requirement of law that the disposition of the Holder's
property shall at all times be and remain within its control.
5. The Holder is (A) a "qualified institutional buyer" (a
"QIB") as defined in Rule 144A under the Securities Act, and is aware that the
transferor of the ___% Certificate may be relying on the exemption from the
registration requirements of the Securities Act provided by Rule 144A and is
acquiring such ___% Certificate for its own Account or for the Account of one or
more qualified institutional buyers for whom it is authorized to act, or (B) a
Person involved in the organization or operation of the Trust or an affiliate of
such Person within the meaning of Rule 3a-7 of the Investment Company Act of
1940, as amended (including, but not limited to, the Transferor). The Holder is
able to bear the economic risks of such an investment. The Holder is a QIB
because [STATE FACTUAL BASIS FOR QIB STATUS]
6. If the Holder sells or otherwise transfers the registered
ownership of such ___% Certificate, the Holder will comply with the restrictions
and requirements with respect to the transfer of the ownership of the ___%
Certificate under the Trust Agreement, and the Holder will obtain from any
subsequent purchaser or transferee substantially the same certifications,
representations, warranties and covenants as required under the Trust Agreement
in connection with such subsequent sale or transfer thereof.
7. The Holder is not an entity that will hold a ___%
Certificate as nominee (a "Book Entry Nominee") to facilitate the clearance and
settlement of such security through electronic book-entry changes in Accounts or
participating organizations.
8. The Holder (i) is not a person which is an employee benefit
plan, trust or account subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code or a
governmental plan, as defined in Section 3(32) of ERISA, subject to any federal,
state or local law which is, to a material extent, similar to the foregoing
provisions of ERISA or the Code (any such person being a "Plan"), (ii) is not an
entity, including an insurance company separate account or general account,
whose underlying assets include "plan assets" by reason of a Plan's investment
in the entity and (iii) is not directly or indirectly purchasing such ___%
Certificate on behalf of, as investment manager of, as named fiduciary of, as
trustee of, or with assets of a Plan.
9. The Holder hereby agrees to indemnify each of the Trust,
the Indenture Trustee and the Owner Trustee against any liability that may
result if the Holder's transfer of a ___% Certificate (or any portion thereof)
is not exempt from the registration requirements of the Securities Act and any
applicable state securities laws or is not made in accordance with such federal
and state laws. Such indemnification of the Trust, the Indenture Trustee and the
Owner Trustee shall survive the termination of the related Trust Agreement.
C-2
IN WITNESS WHEREOF, the Holder has caused this instrument to
be executed on its behalf, pursuant to the authority of its Board of Directors,
by its duly authorized signatory this ____ day of __________, 199_.
[NAME OF HOLDER]
By: ______________________________________
Name:
Title:
C-3
