EXHIBIT 4.2
XXXXXX XXXXXXX ABS CAPITAL I INC.
as Depositor
and
[_______]
as Owner Trustee
_________________________________________
TRUST AGREEMENT
Dated as of [___], 20[__]
__________________________________________
[_______],
Series [___]
EXHIBIT 4.2
Table of Contents
Page
ARTICLE I.
Definitions
Section 1.01. Definitions.............................................1
Section 1.02. Other Definitional Provisions...........................1
ARTICLE II.
Organization
Section 2.01. Name....................................................3
Section 2.02. Office..................................................3
Section 2.03. Purposes and Powers.....................................3
Section 2.04. Appointment of Owner Trustee............................4
Section 2.05. Initial Capital Contribution of Owner Trust
Estate..................................................4
Section 2.06. Declaration of Trust....................................4
Section 2.07. Reserved................................................4
Section 2.08. Title to Trust Property.................................4
Section 2.09. Situs of Trust..........................................4
Section 2.10. Representations and Warranties of the Depositor.........5
Section 2.11. Payment of Trust Fees...................................5
Section 2.12. Federal Income Tax Allocations..........................5
ARTICLE III.
Conveyance of the Revolving Credit Loans; Certificates
Section 3.01. Conveyance of the Revolving Credit Loans................6
Section 3.02. Initial Ownership.......................................6
Section 3.03. The Initial Certificates................................6
Section 3.04. Authentication of Certificates..........................6
Section 3.05. Registration of and Limitations on Transfer and
Exchange of Certificates................................7
Section 3.06. Mutilated, Destroyed, Lost or Stolen
Certificates............................................9
Section 3.07. Persons Deemed Certificateholders......................10
Section 3.08. Access to List of Certificateholders' Names and
Addresses..............................................10
Section 3.09. Maintenance of Office or Agency........................10
Section 3.10. Cooperation............................................12
ARTICLE IV.
Authority and Duties of Owner Trustee
Section 4.01. General Authority......................................13
Section 4.02. General Duties.........................................13
Section 4.03. Action upon Instruction................................13
Section 4.04. No Duties Except as Specified under Specified
Documents or in Instructions...........................14
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Section 4.05. Restrictions...........................................14
Section 4.06. Prior Notice to Certificateholders and the
Credit Enhancer with Respect to Certain Matters........14
Section 4.07. Action by Certificateholders with Respect to
Certain Matters........................................15
Section 4.08. Action by Certificateholders with Respect to
Bankruptcy.............................................15
Section 4.09. Restrictions on Certificateholders' Power..............15
Section 4.10. Majority Control.......................................15
Section 4.11. Doing Business in Other Jurisdictions..................16
ARTICLE V.
Application of Trust Funds
Section 5.01. Distributions..........................................17
Section 5.02. Method of Payment......................................17
Section 5.03. Signature on Returns...................................17
Section 5.04. Statements to Certificateholders.......................17
ARTICLE VI.
Concerning the Owner Trustee
Section 6.01. Acceptance of Trusts and Duties........................18
Section 6.02. Furnishing of Documents................................19
Section 6.03. Representations and Warranties.........................19
Section 6.04. Reliance; Advice of Counsel............................20
Section 6.05. Not Acting in Individual Capacity......................20
Section 6.06. Owner Trustee Not Liable for Certificates or
Related Documents......................................20
Section 6.07. Owner Trustee May Own Certificates and Notes...........21
Section 6.08. Licenses...............................................21
ARTICLE VII.
Compensation of Owner Trustee
Section 7.01. Owner Trustee's Fees and Expenses......................22
Section 7.02. Indemnification........................................22
Section 7.03. Payments to the Owner Trustee..........................23
ARTICLE VIII.
Termination of Trust Agreement
Section 8.01. Termination of Trust Agreement.........................24
ARTICLE IX.
Successor Owner Trustees and Additional Owner Trustees
Section 9.01. Eligibility Requirements for Owner Trustee.............26
Section 9.02. Replacement of Owner Trustee...........................26
Section 9.03. Successor Owner Trustee................................27
Section 9.04. Merger or Consolidation of Owner Trustee...............27
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Section 9.05. Appointment of Co-Trustee or Separate Trustee..........27
ARTICLE X.
Miscellaneous
Section 10.01. Amendments.............................................29
Section 10.02. No Legal Title to Owner Trust Estate...................30
Section 10.03. Limitations on Rights of Others........................30
Section 10.04. Notices................................................31
Section 10.05. Severability...........................................31
Section 10.06. Separate Counterparts..................................31
Section 10.07. Successors and Assigns.................................31
Section 10.08. No Petition............................................32
Section 10.09. No Recourse............................................32
Section 10.10. Headings...............................................32
Section 10.11. GOVERNING LAW..........................................32
Section 10.12. Integration............................................32
Section 10.13. Rights of Credit Enhancer to Exercise Rights of
Certificateholders.....................................32
Section 10.14. Third Party Beneficiary................................32
EXHIBITS
Exhibit A-1 - Form of Class [_] Certificate A-1-1
Exhibit A-2 - Form of Class [_] Certificate A-2-1
Exhibit B - Certificate of Trust of [________] B-1
Exhibit C - Form of 144A Investment Representation C-1
Exhibit D - Form of Investor Representation Letter D-1
Exhibit E - Form of Transferor Representation Letter E-1
Exhibit F - Form of Certificate of Non-Foreign Status F-1
Exhibit G - Form of ERISA Representation Letter G-1
Exhibit H - Form of Representation Letter H-1
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This Trust Agreement, dated as of [___], 20[__] (as amended from time to
time, this "Trust Agreement"), between XXXXXX XXXXXXX ABS CAPITAL I INC., a
Delaware corporation, as depositor (the "Depositor") and [_______], a
[Delaware] banking corporation, as owner trustee (the "Owner Trustee"),
In consideration of the mutual agreements herein contained, the
Depositor and the Owner Trustee agree as follows:
ARTICLE I.
Definitions
Section 1.01. Definitions. For all purposes of this Trust Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the
meanings assigned to such terms in Appendix A to the Indenture dated as of
[___], 20[__] (the "Indenture"), between [________], as issuer, and
[__________], as indenture trustee. All other capitalized terms used herein
shall have the meanings specified herein.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have the
defined meanings when used in any certificate or other document made or
delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
not defined in this Trust Agreement or in any such certificate or other
document, and accounting terms partly defined in this Trust 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
Trust 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 Trust Agreement or in any such
certificate or other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Trust Agreement shall refer to this Trust
Agreement as a whole and not to any particular provision of this Trust
Agreement; Article, Section and Exhibit references contained in this Trust
Agreement are references to Articles, Sections and Exhibits in or to this
Trust Agreement unless otherwise specified; and the term "including" shall
mean "including without limitation".
(d) The definitions contained in this Trust 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.
(e) 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 (the "Trust") 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 xxx and be sued.
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, the Credit Enhancer and the Depositor.
Section 2.03. Purposes and Powers. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Trust Agreement and to sell such Notes and the
Certificates;
(ii) to acquire the Home Equity Loans and to pay the
organizational, start-up and transactional expenses of the Trust;
(iii) to assign, Grant, transfer, pledge and convey the Home
Equity Loans pursuant to the Indenture and to hold, manage and distribute to
the Certificateholders pursuant to Section 5.01 any portion of the Home Equity
Loans released from the Lien of, and remitted to the Trust pursuant to the
Indenture;
(iv) to enter into and perform its obligations under the
Basic Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vi) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions to the
Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities.
The Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this Trust
Agreement or the Basic Documents while any Note is outstanding without the
consent of the Holders of a majority of the Certificate Percentage Interest of
the Certificates, the Credit Enhancer (as evidenced in writing) and the
Indenture Trustee.
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 and the
Owner Trustee hereby accepts such appointment.
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Section 2.05. Initial Capital Contribution of Owner Trust Estate. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the
Trust, as of the date hereof, the sum of $[__]. 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 corpus of the
Trust and shall be deposited in the Certificate Distribution Account. The
Owner Trustee also acknowledges on behalf of the Issuer, the receipt in trust
on the Closing Date of the Home Equity Loans assigned to the Trust pursuant to
Section 3.01, which shall constitute the Owner Trust Estate.
Section 2.06. Declaration of Trust. The Owner Trustee hereby declares
that it shall hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a statutory trust
under the [Delaware] Trust Statute and that this Trust Agreement constitute
the governing instrument of such statutory trust. Effective as of the date
hereof, the Owner Trustee shall have all rights, powers and duties set forth
herein and in the [Delaware] Trust Statute with respect to accomplishing the
purposes of the Trust. It is the intention of the parties hereto that, for
income and franchise tax purposes, the Trust shall be treated as a security
arrangement, with the assets of the Trust being the Trust Estate and the
owners of the related Trust Estate being the owners of the Certificates. The
parties agree that, unless otherwise required by appropriate tax authorities,
the Trust will file or cause to be filed annual or other necessary returns,
reports and other forms, if any, consistent with the characterization of the
Trust as provided in the preceding sentence for such tax purposes. Effective
as of the date hereof, the Owner Trustee shall have all rights, powers and
duties set forth herein and in the [Delaware] Trust Statute with respect to
accomplishing the purposes of the Trust.
Section 2.07. Reserved.
Section 2.08. Title to Trust Property. Subject to the Indenture, legal
title to the Owner Trust Estate shall be vested at all times in the Trust as a
separate legal entity except where applicable law in any jurisdiction requires
title to any part of the Owner Trust Estate to be vested in a trustee or
trustees, in which case title shall be deemed to be vested in the Owner
Trustee, a co-trustee and/or a separate trustee, as the case may be.
The Owners 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
Owners shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of any part
of the Owner Trust Estate.
Section 2.09. Situs of Trust. The Trust will be located and
administered in the State of [Delaware]. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of
[Delaware] or the State of [New York]. The Trust shall not have any employees
in any state other than [Delaware]; provided, however, that nothing herein
shall restrict or prohibit the Owner Trustee from having employees within or
without the State of [Delaware] or taking actions outside the State of
[Delaware] in order to comply with Section 2.03. Payments will be received by
the Trust only in [Delaware], [state], [state] or [state], and
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payments will be made by the Trust only from [Delaware], [state], [state] or
[state]. The only office of the Trust will be at the Corporate Trust Office of
the Owner Trustee in [Delaware].
Section 2.10. Representations and Warranties of the Depositor. The
Depositor hereby represents and warrants to the Owner Trustee and the Credit
Enhancer as of the date hereof 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 Trust Agreement and to carry out its terms; the Depositor has
full power and authority to sell and assign the property to be sold and
assigned to and deposited with the Trust as part of the Trust and the
Depositor has duly authorized such sale and assignment and deposit to the
Trust by all necessary corporate action; and the execution, delivery and
performance of this Trust Agreement have been duly authorized by the Depositor
by all necessary corporate action.
(iii) The consummation of the transactions contemplated by
this Trust 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
articles of incorporation or bylaws 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) This Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Home Equity Loans in favor
of the Securityholders, which security interest is prior to all other Liens,
except the Lien of the Indenture, and is enforceable as such as against
creditors of and purchasers from the Issuer.
(v) The Home Equity Loans constitute "instruments" within
the meaning of the UCC.
(vi) The Depositor owns and has good and marketable title to
the Home Equity Loans free and clear of any lien, claim or encumbrance of any
Person, other than the Lien of the Indenture.
(vii) The Depositor has caused or will have caused, within
[__] days, the filing of all appropriate financing statements in the proper
filing office in the appropriate jurisdictions under applicable law in order
to perfect the security interest in the Home Equity Loans granted to the
Securityholders hereunder.
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(viii) Other than the security interests granted to the
Securityholders pursuant to this Agreement and the Indenture, the Issuer has
not pledged, assigned, sold, granted a security interest in, or otherwise
conveyed any of the Home Equity Loans. The Depositor has not authorized the
filing of and is not aware of any financing statements against the Depositor
that include a description of collateral covering the Home Equity Loans other
than any financing statement relating to the security interest granted to the
Securityholders hereunder or under the Indenture or that has been terminated.
The Depositor is not aware of any judgment or tax lien filings against the
Depositor.
(ix) Prior to the transfer to the Indenture Trustee, the
Depositor had in its possession all original copies of the security
certificates that constitute or evidence the Home Equity Loans. The security
certificates that constitute or evidence the Home Equity Loans do not have any
marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than the Securityholders. All financing
statements filed or to be filed against the Depositor in favor of the
Securityholders in connection herewith describing the Home Equity Loans
contain a statement to the following effect: "A purchase of or security
interest in any collateral described in this financing statement will violate
the rights of the Securityholders."
Section 2.11. Payment of Trust Fees. The Owner Trustee shall pay from
the Owner Trust Estate the Trust's fees and expenses incurred with respect to
the performance of the Trust's duties under the Indenture.
Section 2.12. Federal Income Tax Allocations. Net income of the Trust
for any month, as determined for Federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof), shall
be allocated to the holders of the Certificates.
6
ARTICLE III.
Conveyance of the Home Equity Loans; Certificates
Section 3.01. Conveyance of the Home Equity Loans. The Depositor,
concurrently with the execution and delivery hereof, does hereby transfer and
convey to the Trust, on behalf of the Holders of the Notes and the
Certificates and the Credit Enhancer, without recourse, all its right, title
and interest in and to the Home Equity Loans, together with the Depositor's
right, title and interest under the Home Equity Loan Purchase Agreement.
The parties hereto intend that the transaction set forth herein be a
sale for certain non-tax purposes by the Depositor to the Trust of all of its
right, title and interest in and to the Home Equity Loans. In the event that
the transaction set forth herein is not deemed to be a sale for certain
non-tax purposes, the Depositor hereby Grants to the Trust a security interest
in all of its right, title and interest in, to and under the Owner Trust
Estate, all distributions thereon and all proceeds thereof; and this Trust
Agreement shall constitute a security agreement under applicable law.
Section 3.02. Initial Ownership. Upon the formation of the Trust by the
contribution of the Depositor pursuant to Section 2.05 and until the
conveyance of the Home Equity Loans pursuant to Section 3.01 and the issuance
of the Certificates, the Depositor shall be the sole Certificateholder.
Section 3.03. The Initial Certificates. The Certificates shall be
issued in minimum denominations of a Certificate Percentage Interest of [__]%
and integral multiples of [__]% in excess thereof.
The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee and
authenticated in the manner provided in Section 3.04. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of the Trust,
shall be validly issued and entitled to the benefit of this Trust Agreement,
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. A Person shall become a Certificateholder and shall be entitled
to the rights and subject to the obligations of a Certificateholder hereunder
upon such Person's acceptance of a Certificate duly registered in such
Person's name, pursuant to Section 3.05.
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 and upon satisfaction of
the conditions set forth in Section 3.05. No Certificates, except for the
Certificates issued pursuant to this Section 3.03, shall be issued by the
Trust without the prior written consent of the Credit Enhancer.
Section 3.04. Authentication of Certificates. Concurrently with the
acquisition of the Home Equity Loans by the Trust, the Owner Trustee shall
cause the Certificates in an initial
7
Certificate Percentage Interest of 100.00% to be executed on behalf of the
Trust, authenticated and delivered to or upon the written order of the
Depositor, signed by its chairman of the board, its president or any vice
president, without further corporate action by the Depositor, in authorized
denominations. No Certificate shall entitle its holder to any benefit under
this Trust Agreement or 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 Certificate Paying
Agent, by manual 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 3.05. Registration of and Limitations on Transfer and Exchange
of Certificates. The Certificate Registrar shall keep or cause to be kept, at
the office or agency maintained pursuant to Section 3.09, 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 Trust
hereby appoints the Indenture Trustee as the initial Certificate Registrar and
the Indenture Trustee hereby accepts such appointment. If the Certificate
Registrar resigns or is removed, the Owner Trustee shall appoint a successor
Certificate Registrar.
Subject to satisfaction of the conditions set forth below, upon
surrender for registration of transfer of any Certificate at the office or
agency maintained pursuant to Section 3.09, the Owner Trustee shall execute,
authenticate and deliver (or shall cause the Certificate Registrar as its
authenticating agent to authenticate and deliver), in the name of the
designated transferee or transferees, one or more new Certificates in
authorized denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent. In the event
the Owner Trustee receives any Certificates for re-registration or transfer,
the Owner Trustee shall promptly notify the Certificate Registrar. At the
option of a Certificateholder, Certificates may be exchanged for other
Certificates of authorized denominations of a like aggregate amount upon
surrender of the Certificates to be exchanged at the office or agency
maintained pursuant to Section 3.09.
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 Certificate Registrar duly executed by the
Certificateholder or such Certificateholder's attorney duly authorized in
writing. Each Certificate surrendered for registration of transfer or exchange
shall be cancelled and subsequently 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.
Except as described below, each Certificateholder shall establish its
non-foreign status by submitting to the Certificate Paying Agent an IRS Form
W-9 and the Certificate of Non-Foreign Status set forth in Exhibit F hereto.
8
A Certificate may be transferred to a Certificateholder unable to
establish its non-foreign status as described in the preceding paragraph only
if such Certificateholder provides an Opinion of Counsel, which Opinion of
Counsel shall not be an expense of the Trust, the Owner Trustee, the
Certificate Registrar or the Depositor, satisfactory to the Depositor and the
Credit Enhancer, that such transfer (1) will not affect the tax status of the
Owner Trust and (2) will not adversely affect the interests of any
Certificateholder, Noteholder or the Credit Enhancer, including, without
limitation, as a result of the imposition of any United States federal
withholding taxes on the Trust (except to the extent that such withholding
taxes would be payable solely from amounts otherwise distributable to the
Certificate of the prospective transferee). If such transfer occurs and such
foreign Certificateholder becomes subject to such United States federal
withholding taxes, any such taxes will be withheld by the Indenture Trustee.
Each Certificateholder unable to establish its non-foreign status that
otherwise complies with the foregoing requirements shall submit to the
Certificate Paying Agent a copy of its Form W-8BEN and shall resubmit such
Form W-8BEN every three years.
No transfer, sale, pledge or other disposition of a Certificate shall be
made unless such transfer, sale, pledge or other disposition is exempt from
the registration requirements of the Securities Act and any applicable state
securities laws or is made in accordance with said Act and laws. In the event
of any such transfer, the Certificate Registrar or the Depositor shall prior
to such transfer require the transferee to execute (A) either (i) (a) an
investment letter in substantially the form attached hereto as Exhibit C (or
in such form and substance reasonably satisfactory to the Certificate
Registrar, the Credit Enhancer and the Depositor) which investment letters
shall not be an expense of the Trust, the Owner Trustee, the Certificate
Registrar, the Servicer, the Credit Enhancer or the Depositor and which
investment letter states that, among other things, such transferee (a) is a
"qualified institutional buyer" as defined under Rule 144A, acting for its own
account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (b) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act,
provided by Rule 144A or (ii) (a) a written Opinion of Counsel acceptable to
and in form and substance satisfactory to the Certificate Registrar, the
Credit Enhancer and the Depositor that such transfer may be made pursuant to
an exemption, describing the applicable exemption and the basis therefor, from
said Act and laws or is being made pursuant to said Act and laws, which
Opinion of Counsel shall not be an expense of the Trust, the Owner Trustee,
the Certificate Registrar, the Servicer, the Credit Enhancer or the Depositor
and (b) the transferee executes a representation letter, substantially in the
form of Exhibit D hereto, and the transferor executes a representation letter,
substantially in the form of Exhibit E hereto, each acceptable to and in form
and substance satisfactory to the Certificate Registrar, the Credit Enhancer
and the Depositor certifying the facts surrounding such transfer, which
representation letters shall not be an expense of the Trust, the Owner
Trustee, the Certificate Registrar, the Servicer, the Credit Enhancer or the
Depositor and (B) the Certificate of Non-Foreign Status (in substantially the
form attached hereto as Exhibit F) acceptable to and in form and substance
reasonably satisfactory to the Certificate Registrar, the Credit Enhancer and
the Depositor, which certificate shall not be an expense of the Trust, the
Owner Trustee, the Certificate Registrar, the Credit Enhancer or the Depositor
and (C) an Opinion of Counsel acceptable to the Credit Enhancer, which Opinion
of Counsel shall not be an expense of the Credit Enhancer, that such transfer,
sale, pledge or other disposition of a Certificate will not cause the Trust to
be treated as a taxable mortgage pool for federal income tax purposes. If the
Certificateholder is unable to provide a Certificate of Non-Foreign Status,
the Certificateholder
9
must provide an Opinion of Counsel as described in the preceding paragraph.
The Certificateholder desiring to effect such transfer shall, and does hereby
agree to, indemnify the Trust, the Owner Trustee, the Certificate Registrar,
the Servicer, the Credit Enhancer and the Depositor against any liability that
may result if the transfer is not so exempt or is not made in accordance with
such federal and state laws.
No transfer of Certificates or any interest therein shall be made to any
employee benefit plan or other retirement plan arrangement, including
individual retirement accounts and annuities, Xxxxx plans and bank collective
investment funds and insurance company general or separate accounts in which
such plans, accounts or arrangements are invested, that is subject to ERISA or
Section 4975 of the Code (collectively, "Plan"), any Person acting, directly
or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "plan assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101 ("Plan Assets
Regulation") unless the Depositor, the Owner Trustee, the Certificate
Registrar, the Credit Enhancer and the Servicer are provided with an Opinion
of Counsel which establishes to the satisfaction of the Depositor, the Owner
Trustee, the Certificate Registrar, the Credit Enhancer and the Servicer that
the purchase of Certificates is permissible under applicable law, will not
constitute or result in any prohibited transaction under ERISA or Section 4975
of the Code and will not subject the Depositor, the Owner Trustee, the
Certificate Registrar, the Credit Enhancer or the Servicer to any obligation
or liability (including obligations or liabilities under ERISA or Section 4975
of the Code) in addition to those undertaken in this Agreement, which Opinion
of Counsel shall not be an expense of the Depositor, the Owner Trustee, the
Certificate Registrar, the Credit Enhancer or the Servicer. In lieu of such
Opinion of Counsel, a Person seeking to acquire Certificates may provide a
certification in the form of Exhibit G to this Agreement, which the Depositor,
the Owner Trustee, the Certificate Registrar, the Credit Enhancer and the
Servicer may rely upon without further inquiry or investigation. Neither an
Opinion of Counsel nor a certification will be required in connection with the
initial transfer of any such Certificate by the Depositor to an affiliate of
the Depositor (in which case, the Depositor or any affiliate thereof shall be
deemed to have represented that such affiliate is not a Plan or a Person
investing Plan Assets of any Plan) and the Owner Trustee shall be entitled to
conclusively rely upon a representation (which, upon the request of the Owner
Trustee, shall be a written representation) from the Depositor of the status
of such transferee as an affiliate of the Depositor.
In addition, no transfer of a Certificate shall be permitted, and no
such transfer shall be registered by the Certificate Registrar or be effective
hereunder, unless evidenced by an Opinion of Counsel acceptable to the Credit
Enhancer, which Opinion of Counsel shall not be an expense of the Credit
Enhancer, which establishes that such transfer or the registration of such
transfer would not cause the Trust to be classified as a publicly traded
partnership, by having more than 100 Certificateholders at any time during the
taxable year of the Trust, an association taxable as a corporation, a
corporation or a taxable mortgage pool for federal and relevant state income
tax purposes.
In addition, no transfer, sale, assignment, pledge or other disposition
of a Certificate shall be made unless the proposed transferee executes a
representation letter substantially in the form of Exhibit D, or substantially
in the form of Exhibit H hereto, that (1) the transferee is acquiring the
Certificate for its own behalf and is not acting as agent or custodian for any
other Person or
10
entity in connection with such acquisition and (2) if the transferee is a
partnership, grantor trust or S corporation for federal income tax purposes,
the Certificates are not more than 50% of the assets of the partnership,
grantor trust or S corporation.
In addition, no transfer of any portion of a Class [_] or a Class [_]
Certificate shall be made, and any attempted or purported transfer of a Class
[_] or Class [_] Certificate shall be absolutely null and void and shall vest
no rights in the purported transferee, unless: (i) following such transfer,
for federal income tax purposes, 100% of the Class [_] and Class [_]
Certificates are treated as owned by the same person or persons in the same
proportions as they are owned, or (ii) the transferee provides the Owner
Trustee with an Opinion of Counsel to the effect that such transfer will not
cause the Trust to be subject to an entity level tax for federal income tax
purposes.
Section 3.06. 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, the Owner Trustee and the Credit
Enhancer such security or indemnity as may be required by them to save each of
them and the Issuer from harm, then in the absence of notice to the
Certificate Registrar or the Owner Trustee that such Certificate has been
acquired by a bona fide purchaser, the Owner Trustee shall execute on behalf
of the Trust and the Owner Trustee or the Certificate Paying Agent, as the
Trust'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 tenor and denomination. In connection with the issuance of
any new Certificate under this Section 3.06, 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 3.06 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 3.07. Persons Deemed Certificateholders. Prior to due
presentation of a Certificate for registration of transfer, the Owner Trustee,
the Certificate Registrar, the Credit Enhancer or any Certificate Paying Agent
may treat the Person in whose name any Certificate is 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 none of the Trust, the Owner Trustee, the Certificate
Registrar, the Credit Enhancer or any Certificate Paying Agent shall be bound
by any notice to the contrary.
Section 3.08. Access to List of Certificateholders' Names and
Addresses. The Certificate Registrar shall furnish or cause to be furnished to
the Depositor, the Credit Enhancer or the Owner Trustee, within 15 days after
receipt by the Certificate Registrar of a written request therefor from the
Depositor, the Credit Enhancer or the Owner Trustee, a list, in such form as
the Depositor, the Credit Enhancer or the Owner Trustee, as the case may be,
may reasonably require, of the names and addresses of the Certificateholders
as of the most recent Record Date. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Trust, the
Depositor, the Certificate Registrar, the Credit Enhancer or the Owner Trustee
accountable by reason of the disclosure of its name and address, regardless
11
of the source from which such information was derived. All notices to be given
to the Owner Trustee shall be delivered to its Corporate Trust Office.
Section 3.09. Maintenance of Office or Agency. The Trust, shall
maintain an office or offices or agency or agencies where Certificates may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trust in respect of the Certificates and the Basic
Documents may be served. Such office shall initially be the Corporate Trust
Office of the Certificate Registrar. The Owner Trustee shall give prompt
written notice to the Depositor, the Credit Enhancer and the
Certificateholders of any change in the location of the Certificate Register
or any such office or agency.
(a) Certificate Paying Agent. The Certificate Paying Agent
shall make distributions to Certificateholders from the Certificate
Distribution Account on behalf of the Trust in accordance with the provisions
of the Certificates and Section 5.01 hereof from payments remitted to the
Certificate Paying Agent by the Indenture Trustee pursuant to Section 3.05 of
the Indenture. The Trust hereby appoints the Indenture Trustee as Certificate
Paying Agent and the Indenture Trustee hereby accepts such appointment and
further agrees that it will be bound by the provisions of this Trust Agreement
relating to the Certificate Paying Agent and shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Certificates in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(ii) give the Owner Trustee and the Credit Enhancer notice
of any default by the Trust of which it has actual knowledge in the making of
any payment required to be made with respect to the Certificates;
(iii) at any time during the continuance of any such
default, upon the written request of the Owner Trustee or the Credit Enhancer
forthwith pay to the Owner Trustee on behalf of the Trust all sums so held in
Trust by such Certificate Paying Agent;
(iv) immediately resign as Certificate Paying Agent and
forthwith pay to the Owner Trustee on behalf of the Trust all sums held by it
in trust for the payment of Certificates if at any time it ceases to meet the
standards required to be met by the Certificate Paying Agent at the time of
its appointment;
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Certificates of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; and
(vi) deliver to the Owner Trustee and the Credit Enhancer a
copy of the Statement prepared with respect to each Payment Date by the
Indenture Trustee pursuant to Section 4.01 of the Servicing Agreement.
(b) The Trust may revoke such power and remove the Certificate
Paying Agent if the Owner Trustee determines in its sole discretion that the
Certificate Paying Agent shall have
12
failed to perform its obligations under this Trust Agreement in any material
respect. The Indenture Trustee shall be permitted to resign as Certificate
Paying Agent upon 30 days written notice to the Owner Trustee; provided the
Indenture Trustee is also resigning as Paying Agent under the Indenture at
such time. In the event that the Indenture Trustee shall no longer be the
Certificate Paying Agent under this Trust Agreement and Paying Agent under the
Indenture, the Owner Trustee shall appoint a successor acceptable to the
Credit Enhancer to act as Certificate Paying Agent (which shall be a bank or
trust company) and which shall also be the successor Paying Agent under the
Indenture. The Owner Trustee shall cause such successor Certificate Paying
Agent or any additional Certificate Paying Agent appointed by the Owner
Trustee to execute and deliver to the Owner Trustee and the Credit Enhancer an
instrument to the effect set forth in this Section 3.09 as it relates to the
Certificate Paying Agent. The Certificate Paying Agent shall return all
unclaimed funds to the Trust and upon removal of a Certificate Paying Agent
such Certificate Paying Agent shall also return all funds in its possession to
the Trust. The provisions of Sections 6.01, 6.03, 6.04 and 7.01 shall apply to
the Certificate Paying Agent to the extent applicable. Any reference in this
Agreement to the Certificate Paying Agent shall include any co-paying agent
unless the context requires otherwise.
(c) The Certificate Paying Agent shall establish and maintain
with itself the Certificate Distribution Account in which the Certificate
Paying Agent shall deposit, on the same day as it is received from the
Indenture Trustee, each remittance received by the Certificate Paying Agent
with respect to payments made pursuant to the Indenture. The Certificate
Paying Agent shall make all distributions of the Certificate Distribution
Amount on the Certificates, from moneys on deposit in the Certificate
Distribution Account.
Section 3.10. Cooperation. The Owner Trustee shall cooperate in all
respects with any reasonable request by the Credit Enhancer for action to
preserve or enforce the Credit Enhancer's rights or interest under this Trust
Agreement or the Insurance Agreement, consistent with this Trust Agreement and
without limiting the rights of the Certificateholders as otherwise expressly
set forth in this Trust Agreement.
13
ARTICLE IV.
Authority and Duties of Owner Trustee
Section 4.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver 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 herein, in each case,
in such form as the Owner Trustee shall approve, as evidenced conclusively by
the Owner Trustee's execution thereof. In addition to the foregoing, the Owner
Trustee is authorized to take all actions required of the Trust pursuant to
the Basic Documents.
Section 4.02. General Duties. The Owner Trustee shall be responsible to
administer the Trust pursuant to the terms of this Trust Agreement in the
interest of the Certificateholders, subject to the Basic Documents and in
accordance with the provisions of this Trust Agreement. The Trust, or the
Servicer acting on behalf of the Trust pursuant to Section 6.07 of the
Servicing Agreement shall: (a) maintain the Trust's books and records separate
from any other person or entity; (b) maintain the Trust's bank accounts
separate from any other person or entity; (c) not commingle the Trust's assets
with those of any other person or entity; (d) conduct the Trust's own business
in its own name; (e) other than as contemplated by the Basic Documents and
related documentation, pay the Trust's own liabilities and expenses only out
of its own funds; (f) observe all formalities required under the [Delaware]
Trust Statute; (g) enter into transactions with Affiliates or the Depositor
only if each such transaction is intrinsically fair, commercially reasonable,
and on the same terms as would be available in the arm's length transaction
with a person or entity that is not an Affiliate; (h) not guarantee or become
obligated for the debts of any other entity or person; (i) not hold out the
Trust's credit as being available to satisfy the obligation of any other
person or entity; (j) not acquire the obligations or securities of the Trust's
Affiliates or the Depositor; (k) other than as contemplated by the Basic
Documents and related documentation,, not make any loans to any other person
or entity or buy or hold evidence of indebtedness issued by any other person
or entity; (l) other than as contemplated by the Basic Documents and related
documentation, not pledge the Trust's assets for the benefit of any other
person or entity; (m) hold the Trust out as a separate entity and conduct any
business only in its own name; (n) correct any known misunderstanding
regarding the Trust's separate identity; (o) not identify the Trust as a
division of any other person or entity; (p) maintain appropriate minutes or
other records of appropriate actions and shall maintain its office separate
from the office of the Depositor, the Seller and the Servicer.
Section 4.03. Action upon Instruction.
(a) Subject to Section 4.12 hereof and this Article IV and in
accordance with the terms of the Basic Documents, the Class [_]
Certificateholders may by written instruction direct the Owner Trustee in the
management of the Trust. Such direction may be exercised at any time by
written instruction of the Class [_] Certificateholders pursuant to this
Article IV.
(b) Notwithstanding the foregoing, 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
14
in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this Trust
Agreement or under any Basic Document, or in the event that the Owner Trustee
is unsure as to the application of any provision of this Trust 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 Trust 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 shall promptly give notice (in such form as shall be
appropriate under the circumstances) to the Class [_] Certificateholders and
the Credit Enhancer requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instructions received from the Credit Enhancer or, with the
prior written consent of the Credit Enhancer, the Holders of the Class [_]
Certificates representing a majority of the Security Balance thereof, 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 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 Trust Agreement or the Basic Documents, as it shall
deem to be in the best interests of the Certificateholders, and the Owner
Trustee shall have no liability to any Person for such action or inaction.
Section 4.04. No Duties Except as Specified under Specified Documents
or in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain
from taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee is a party, except as expressly provided
herein; and no implied duties or obligations shall be read into this Trust
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 Trust Agreement or any Basic Document. Further, notwithstanding
anything to the contrary herein or in any other document, the Owner Trustee
shall not be required to execute, deliver or certify on behalf of the Trust,
the Servicer, the Depositor or any other Person any filings, certificates,
affidavits or other instruments required by the SEC or required under the
Xxxxxxxx-Xxxxx Act of 2002. Notwithstanding any Person's right to instruct the
Owner Trustee, neither the Owner Trustee nor any agent, employee, director or
officer of the Owner Trustee shall have any obligation to execute any
certificates or other documents required by the SEC or required pursuant to
the Xxxxxxxx-Xxxxx Act of 2002 or the rules and regulations promulgated
thereunder, and the refusal to comply with any such instructions shall not
constitute a default or breach under this Agreement or any other document in
connection herewith. 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
15
against, the Owner Trustee in its individual capacity that are not related to
the ownership or the administration of the Owner Trust Estate.
Section 4.05. Restrictions.
(a) The Owner Trustee shall not take any action (x) that is
inconsistent with the purposes of the Trust set forth in Section 2.03 or (y)
that, to the actual knowledge of the Owner Trustee, would result in the Trust
becoming taxable as a corporation for federal income tax purposes. The Class
[_] Certificateholders and the Credit Enhancer shall not direct the Owner
Trustee to take action that would violate the provisions of this Section 4.05.
(b) The Owner Trustee shall not convey or transfer any of the
Trust's properties or assets, including those included in the Trust Estate, to
any Person unless (a) it shall have received an Opinion of Counsel acceptable
to the Credit Enhancer, which Opinion of Counsel shall not be an expense of
the Credit Enhancer, to the effect that such transaction will not have any
material adverse tax consequence to the Trust or any Certificateholder and (b)
such conveyance or transfer shall not violate the provisions of Section
3.16(b) of the Indenture.
Section 4.06. Prior Notice to Certificateholders and the Credit
Enhancer with Respect to Certain Matters. With respect to the following
matters, the Owner Trustee shall not take action unless, at least 30 days
before the taking of such action, the Owner Trustee shall have notified the
Certificateholders and the Credit Enhancer in writing of the proposed action
and Holders of the Class [_] Certificates representing a majority of the
Security Balance thereof and the Credit Enhancer shall not have notified the
Owner Trustee in writing prior to the 30th day after such notice is given that
such Certificateholders or the Credit Enhancer have withheld consent or
provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except
claims or lawsuits brought in connection with the collection of cash
distributions due and owing under the Revolving Credit 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 cash distributions due and owing under the Revolving Credit 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
[Delaware] Trust Statute);
(c) the amendment of this Trust Agreement or any Basic Document
in circumstances where the consent of any Noteholder or the Credit Enhancer is
required;
(d) the amendment of this Trust Agreement or any Basic Document
in circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders
or the Credit Enhancer;
(e) the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent or Indenture Trustee or pursuant to this Trust
Agreement of a successor Certificate Registrar or Certificate Paying Agent or
the consent to the assignment by the Note Registrar, Paying Agent, Indenture
Trustee, Certificate Registrar or Certificate Paying Agent of its obligations
under the Indenture or this Trust Agreement, as applicable;
16
(f) the consent to the calling or waiver of any default of any
Basic Document;
(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 VIII hereof, dissolve,
terminate or liquidate the Trust in whole or in part;
(i) cause the Trust to incur, assume or guaranty any
indebtedness other than as in this Agreement or the other Basic Documents;
(j) do any act that conflicts with any other Basic Document;
(k) do any act which would make it impossible to carry on the
ordinary business of the Trust as described in Section 2.3 hereof;
(l) possess Trust assets, or assign the Trust's right to
property, for other than a Trust purpose;
(m) cause the Trust to lend any funds to any entity;
(n) change the Trust's purpose and powers from those set forth
in this Trust Agreement; and
(o) any other events which may have a materially adverse effect
on the interests of the Credit Enhancer.
Section 4.07. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the direction
of the Class [_] Certificateholders evidencing not less than a majority of the
outstanding Security Balance of such Certificates, and with the consent of the
Credit Enhancer, to (a) remove the Servicer under the Servicing Agreement
pursuant to Section 7.01 thereof or (b) except as expressly provided in the
Basic Documents, sell the Home Equity Loans after the termination of the
Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the Class [_]
Certificateholders evidencing not less than a majority of the outstanding
Security Balance of such Certificates and with the written consent of the
Credit Enhancer.
Section 4.08. Action by Certificateholders or Owner Trustee with
Respect to Bankruptcy. The Owner Trustee shall not have the power, except upon
the direction of the 100% of the Certificateholders and the delivery to the
Owner Trustee of each such Certificateholder of a certificate certifying that
such Certificateholder reasonably believes that the Trust is insolvent, with
the consent of the Credit Enhancer or upon the direction of the Credit
Enhancer and 100% of the Noteholders, and to the extent otherwise consistent
with the Basic Documents, (a) institute any proceedings to declare or
adjudicate the Trust a bankrupt or insolvent, (b) consent to the institution
of bankruptcy or insolvency proceedings against the Trust, (c) 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, (d)
consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of
17
the Trust or a substantial part of the property of the Trust, (e) make any
assignment for the benefit of the Trust's creditors, (f) cause the Trust to
admit in writing its inability to pay its debts generally as they become due,
or (g) take any action, or cause the Trust to take any action, in furtherance
of any of the foregoing (any of the above foregoing actions, a "Bankruptcy
Action"). So long as the Indenture and the Insurance Agreement remain in
effect and no Credit Enhancer Default exists, no Certificateholder shall have
the power to take, and shall not take, any Bankruptcy Action with respect to
the Trust or direct the Owner Trustee to take any Bankruptcy Action with
respect to the Trust.
Section 4.09. Restrictions on Certificateholders' Power. The
Certificateholders and the Credit Enhancer shall not direct the Owner Trustee
to take or to 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
Trust 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 4.10. Majority Control. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Trust
Agreement may be taken by the Certificateholders evidencing not less than a
majority of the outstanding Security Balance of such Certificates. Except as
expressly provided herein, any written notice of the Certificateholders
delivered pursuant to this Trust Agreement shall be effective if signed by
Certificateholders evidencing not less than a majority of the outstanding
Security Balance of such Certificates at the time of the delivery of such
notice.
Section 4.11. Doing Business in Other Jurisdictions. 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 [Delaware] if the taking of such action will, even after the
appointment of a co-trustee or separate trustee in accordance with Section
9.05 hereof, (i) require the consent or approval or authorization or order of
or the giving of notice to, or the registration with or the taking of any
other action in respect of, any state or other governmental authority or
agency of any jurisdiction other than the State of [Delaware]; (ii) result in
any fee, tax or other governmental charge under the laws of the State of
[Delaware] becoming payable by [_______], or (iii) subject [_______] to
personal jurisdiction in any jurisdiction other than the State of [Delaware]
for causes of action arising from acts unrelated to the consummation of the
transactions by [_______] or the Owner Trustee, as the case may be,
contemplated hereby.
Section 4.12. Credit Enhancer's Rights Regarding Actions, Proceedings
or Investigations. Until all Notes issued pursuant to the Indenture have been
paid in full, all amounts owed to the Credit Enhancer have been paid in full,
the Insurance Agreement has terminated and the Credit Enhancement Instrument
has been returned to the Credit Enhancer for cancellation, the following
provisions shall apply:
(a) Subject to Article VI hereof but notwithstanding any other provision
contained herein or in the Basic Documents to the contrary, the
Credit Enhancer shall have the right to participate in, to direct
the defense of, and, at the Credit Enhancer's sole option, to
institute or assume the defense of any action, proceeding or
investigation that could adversely affect the Trust, the Trust
Estate or the rights or obligations of the Credit
18
Enhancer hereunder or under the Credit Enhancement Instrument or the
Basic Documents, including (without limitation) any insolvency or
bankruptcy proceeding in respect of the Servicer, the Seller, the
Depositor, the Trust or any affiliate thereof. Following notice to
the Owner Trustee, the Credit Enhancer shall have exclusive right to
determine, in its sole discretion, the actions necessary to preserve
and protect the Trust or the Trust Estate. All costs and expenses of
the Credit Enhancer in connection with such action, proceeding or
investigation, including (without limitation) any judgment or
settlement entered into affecting the Credit Enhancer or the Credit
Enhancer's interests, shall be deemed reimbursable as an amount
payable to the Credit Enhancer under the Insurance Agreement.
(b) In connection with any action, proceeding or investigation that
could adversely affect the Trust, the Trust Estate or the rights or
obligations of the Credit Enhancer hereunder or under the Credit
Enhancement Instrument or the Basic Documents, including (without
limitation) any insolvency or bankruptcy proceeding in respect of
the Servicer, the Seller, the Depositor, the Trust or any affiliate
thereof, the Owner Trustee hereby agrees to cooperate with, and to
take such action as directed by, the Credit Enhancer, including
(without limitation) entering into such agreements and settlements
as the Credit Enhancer shall direct, in its sole discretion, without
the consent of any Certificateholder.
(c) The Owner Trustee hereby agrees upon actual knowledge thereof to
provide the Credit Enhancer prompt written notice of any action,
proceeding or investigation that names the Trust, the Trust Estate
or the Owner Trustee as a party or that could adversely affect the
Trust, the Trust Estate or the rights or obligations of the Credit
Enhancer hereunder or under the Credit Enhancement Instrument or the
Basic Documents, including (without limitation) any insolvency or
bankruptcy proceeding in respect of the Servicer, the Seller, the
Depositor, the Trust or any affiliate thereof.
(d) Notwithstanding anything contained herein or in the Basic Documents
to the contrary, the Owner Trustee shall not, without the Credit
Enhancer's prior written consent or unless directed by the Credit
Enhancer, undertake or join any litigation or agree to any
settlement of any action, proceeding or investigation affecting the
Trust, the Trust Estate or the rights or obligations of the Credit
Enhancer hereunder or under the Credit Enhancement Instrument or the
Basic Documents.
(e) Each Certificateholder, by acceptance of its Certificate, and the
Owner Trustee agree that the Credit Enhancer shall have such rights
as set forth in this Section 4.12, which are in addition to any
rights of the Credit Enhancer pursuant to the other provisions of
the Basic Documents, that the rights set forth in this Section 4.12
may be exercised by the Credit Enhancer, in its sole discretion,
without the need for the consent or approval of any
Certificateholder or the Owner Trustee, subject to Article VI hereof
but notwithstanding any other provision contained herein or in any
Basic Document, and that nothing contained in this Section 4.12
shall be deemed to be an obligation of the Credit Enhancer to
exercise any of the rights provided for herein.
Section 4.13. Restrictions on Trust Activities. The Trust shall abide
by the following restrictions:
19
(a) other than as contemplated by the Basic Documents and related
documentation, the Trust shall not incur any indebtedness;
(b) other than as contemplated by the Basic Documents and related
documentation, the Trust shall not engage in any dissolution,
liquidation, consolidation, merger or sale of assets;
(c) the Trust shall not engage in any business activity in which it is
not currently engaged other than as contemplated by the Basic
Documents and related documentation;
(d) the Trust shall not form, or cause to be formed, any subsidiaries
and shall not own or acquire any asset other than as contemplated by
the Basic Documents and related documentation; and
other than as contemplated by the Basic Documents and related
documentation, the Trust shall not follow the directions or instructions of
the Depositor.
Section 4.14. Tax Election.
In the event that either the Class [_] or Class [_] Certificates are
held by more than one Holder, or the Trust is successfully recharacterized by
the IRS as a partnership, the Owner Trustee (or its agent) shall file an
application with the IRS for a taxpayer identification number with respect to
the Trust (and, upon receipt of such number, notify the Indenture Trustee
thereof) and prepare or cause to be prepared and sign and/or file a tax return
in connection with the transactions contemplated hereby (the "Tax Return");
provided, however, that the Owner Trustee (or its agent) shall, upon receipt
of a written request, send or cause to be sent a copy of the completed Tax
Return to the Servicer, the Depositor, the Certificateholders, the Credit
Enhancer and the Indenture Trustee on or after the due date of the Tax Return.
The Servicer, the Depositor, the Credit Enhancer and any Certificateholders
shall each, upon request by the Owner Trustee (or its agent), furnish the
Owner Trustee (or its agent) with all such information as may be reasonably
required from the Servicer, the Depositor, the Credit Enhancer or the
Certificateholders in connection with the preparation of such Tax Return. The
Owner Trustee shall keep copies of the Tax Returns delivered to or filed by it
(or its agent).
20
ARTICLE V.
Application of Trust Funds
Section 5.01. Distributions.
(a) On each Payment Date, the Certificate Paying Agent shall
distribute to the Certificateholders all funds on deposit in the Certificate
Distribution Account and available therefor (as provided in Section 3.05 of
the Indenture), as the Certificate Distribution Amount for such Payment Date
as follows:
(i) With respect to any Payment Date during the Managed
Amortization Period, in the following order and priority:
A. first, to the Class [_] Certificateholders from
Seller P&I Collections for such Payment Date, interest on any Additional
Balance Contributed Amount at the Net Loan Rate Cap for such Payment Date;
B. second, to the Class [_] Certificateholders from
Seller P&I Collections for such Payment Date, an amount up to the Additional
Balance Contributed Amount for such Payment Date; and
C. third, any remaining amounts, to the Class [_]
Certificateholders.
(ii) With respect to any Payment Date during the Rapid
Amortization Period, in the following order and priority:
A. first, to the Class [_] Certificateholders from
Seller P&I Collections for such Payment Date, interest on the Class Principal
Balance thereof at the Net Loan Rate Cap for such Payment Date;
B. second, to the Class [_] Certificateholders, any
remaining Investor Floating Allocation Percentage of Interest Collections for
such Payment Date;
C. third, to the Class [_] Certificateholders, until
the Class Principal Balance thereof has been reduced to [_]; and
D. fourth, to the Class [_] Certificateholders, until
the Class Principal Balance thereof has been reduced to [_].
provided, further, that the Issuer shall cause any Revolving Credit Loans
removed from the Trust Estate pursuant to Section 2.3 of the Home Equity Loan
Purchase Agreement to be assigned to the Holder of the Class [_] Certificates
and the Class Principal Balance of the Class [_] Certificates shall be reduced
by the Principal Balance of such Revolving Credit Loans (it being understood
that, if any such assignment occurs during the Managed Amortization Period,
the Principal Balance of such Revolving Credit Loans will be offset against
the Class Principal
21
Balance of the Class [_] Certificates following commencement of the Rapid
Amortization Period).
All distributions made pursuant to this Section shall be distributed to the
Certificateholders on a pro rata basis based on the Certificate Percentage
Interests thereof.
(b) In the event that any withholding tax is imposed on the
distributions (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section 5.01. The Certificate Paying Agent is hereby
authorized and directed to retain or cause to be retained 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 Owner Trustee from contesting any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted by
law, pending the outcome of such proceedings). The amount of any withholding
tax imposed with respect to a Certificateholder shall be treated as cash
distributed to such Certificateholder at the time it is withheld by the
Certificate Paying Agent and remitted to the appropriate taxing authority. If
there is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a non-U.S. Certificateholder), the
Certificate Paying Agent may in its sole discretion withhold such amounts in
accordance with this paragraph.
(c) Distributions to Certificateholders shall be subordinated to
the creditors of the Trust, including the Noteholders.
Section 5.02. Method of Payment. Subject to Section 8.01(c),
distributions required to be made to Certificateholders on any Payment Date as
provided in Section 5.01 shall be made to each Certificateholder of record on
the preceding Record Date either by wire transfer, in immediately available
funds, to the account of such Holder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
to the Certificate Registrar and Certificate Paying Agent appropriate written
instructions at least five Business Days prior to such Payment Date or, if
not, by check mailed to such Certificateholder at the address of such Holder
appearing in the Certificate Register.
Section 5.03. Signature on Returns. The Owner Trustee shall sign on
behalf of the Trust the tax returns, if any, of the Trust forwarded to it in
execution form.
Section 5.04. Statements to Certificateholders. On each Payment Date,
the Indenture Trustee shall make available to each Certificateholder and the
Credit Enhancer the Statement provided to the Owner Trustee and the
Certificate Paying Agent by the Indenture Trustee pursuant to Section 4.01 of
the Servicing Agreement with respect to such Payment Date.
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ARTICLE VI.
Concerning the Owner Trustee
Section 6.01. 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 Trust Agreement.
The Owner Trustee and the Certificate Paying Agent also agree to disburse all
moneys actually received by it constituting part of the Owner Trust Estate
upon the terms of the Basic Documents and this Trust Agreement. The Owner
Trustee shall not be answerable or accountable hereunder or under any Basic
Document under any circumstances, except (i) for its own willful misconduct,
gross negligence or bad faith or grossly negligent failure to act, (ii) in the
case of the inaccuracy of any representation or warranty contained in Section
6.03 expressly made by the Owner Trustee, (iii) for liabilities arising from
the failure of the Owner Trustee to perform obligations expressly undertaken
by it in the last sentence of Section 4.04 hereof and (iv) for taxes, fees or
other charges on, based on or measured by, any fees, commissions or
compensation received by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding
sentence):
(a) No provision of this Trust 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, duties 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;
(b) 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;
(c) The Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Trust 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 Estate, or for or in
respect of the validity or sufficiency of the Basic Documents, the Notes, the
Certificates, other than the certificate of authentication on the
Certificates, if executed by the Owner Trustee 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 or
expressly agreed to in the Basic Documents;
(d) The execution, delivery, authentication and performance by
it of this Trust Agreement will not require the authorization, consent or
approval of, the giving of notice to, the filing or registration with, or the
taking of any other action with respect to, any governmental authority or
agency;
(e) The Owner Trustee shall not be liable for the default or
misconduct of the Credit Enhancer, the Depositor, the Indenture Trustee or the
Servicer under any of the Basic Documents or otherwise and the Owner Trustee
shall have no obligation or liability to perform the obligations of the Trust
under this Trust Agreement or the Basic Documents that are required
23
to be performed by the Indenture Trustee under the Indenture, the Servicer
under the Servicing Agreement or the Seller under the Home Equity Loan
Purchase Agreement; and
(f) The Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it or duties imposed by this Trust
Agreement, or to institute, conduct or defend any litigation under this Trust
Agreement or otherwise or in relation to this Trust Agreement or any Basic
Document, at the request, order or direction of any of the Certificateholders
or Credit Enhancer unless the Owner Trustee has been offered security or
indemnity satisfactory to it against the costs, expenses and liabilities that
may be incurred by the Owner Trustee therein or thereby. The right of the
Owner Trustee to perform any discretionary act enumerated in this Trust
Agreement or in any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its gross negligence, bad
faith or willful misconduct in the performance of any such act.
Section 6.02. Furnishing of Documents. The Owner Trustee shall furnish
to the Securityholders and the Credit Enhancer promptly upon receipt of a
written reasonable request therefor, duplicates or copies of all reports,
notices, requests, demands, certificates, financial statements and any other
instruments furnished to the Trust under the Basic Documents.
Section 6.03. Representations and Warranties. The Owner Trustee hereby
represents and warrants to the Depositor, the Credit Enhancer and the
Certificateholders, that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the State of [Delaware]. It has
all requisite corporate power and authority to execute, deliver and perform
its obligations under this Trust Agreement;
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Trust Agreement, and this Trust Agreement
will be executed and delivered by one of its officers who is duly authorized
to execute and deliver this Trust Agreement on its behalf;
(c) Neither the execution nor the delivery by it of this Trust
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
bylaws or any indenture, mortgage, contract, agreement or instrument to which
it is a party or by which any of its properties may be bound;
(d) This Trust Agreement, assuming due authorization, execution
and delivery by the Owner Trustee and the Depositor, constitutes a valid,
legal and binding obligation of the Owner Trustee, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally and to general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law;
(e) The Owner Trustee is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental
24
agency, which default might have consequences that would materially and
adversely affect the condition (financial or other) or operations of the Owner
Trustee or its properties or might have consequences that would materially
adversely affect its performance hereunder; and
(f) No litigation is pending or, to the best of the Owner
Trustee's knowledge, threatened against the Owner Trustee which would prohibit
its entering into this Trust Agreement or performing its obligations under
this Trust Agreement.
Section 6.04. 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, bond, or other document or paper believed
by it to be genuine and believed by it to be signed by the proper party or
parties. The Owner Trustee may accept a certified copy of a resolution of the
board of directors or other governing body of any corporate party as
conclusive evidence that such resolution has been duly adopted by such body
and that the same is in full force and effect. As to any fact or matter the
method of 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 Trust hereunder and
in the performance of its duties and obligations under this Trust Agreement or
the Basic Documents, the Owner Trustee (i) may act directly or through its
agents, attorneys, custodians or nominees (including persons acting under a
power of attorney) 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, attorneys, custodians or nominees (including persons acting under a
power of attorney) if such persons 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 at the
expense of the Trust. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the opinion or
advice of any such counsel, accountants or other such Persons and not contrary
to this Trust Agreement or any Basic Document.
Section 6.05. Not Acting in Individual Capacity. Except as provided in
this Article VI, 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 Trust Agreement or any Basic Document shall look only to
the Owner Trust Estate for payment or satisfaction thereof.
Section 6.06. Owner Trustee Not Liable for Certificates or Related
Documents. The recitals contained herein and in the Certificates (other than
the signatures 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 Trust Agreement, of any Basic Document or
of the Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the
25
Notes, or of any Related Documents. The Owner Trustee shall at no time have
any responsibility or liability with respect to the sufficiency of the Owner
Trust Estate or its ability to generate the payments to be distributed to
Certificateholders under this Trust Agreement or the Noteholders under the
Indenture, including, the compliance by the Depositor or the Seller 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 Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
Section 6.07. 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 Seller,
the Certificate Paying Agent, the Certificate Registrar and the Indenture
Trustee in transactions with the same rights as it would have if it were not
Owner Trustee.
Section 6.08. Licenses. The Owner Trustee shall cooperate with the
Servicer to 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.
26
ARTICLE VII.
Compensation of Owner Trustee
Section 7.01. 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 before the date hereof with the Servicer, and the
Owner Trustee shall be reimbursed for its reasonable expenses hereunder and
under the Basic Documents, including the reasonable compensation, expenses and
disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may reasonably employ in connection with the exercise and
performance of its rights and its duties hereunder and under the Basic
Documents which shall be payable by the Servicer pursuant to Section 3.09 of
the Servicing Agreement.
Section 7.02. Indemnification. The holder of the majority of the
Certificate Percentage Interest of the Class [_] Certificates shall indemnify,
defend and hold harmless the Owner Trustee 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 the Owner Trustee or any Indemnified Party in any way
relating to or arising out of this Trust 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, provided, that:
(i) the holder of the majority of the Certificate Percentage
Interest of the Class [_] Certificates shall not be liable for or required to
indemnify an Indemnified Party from and against Expenses arising or resulting
from the Owner Trustee's willful misconduct, gross negligence or bad faith or
as a result of any inaccuracy of a representation or warranty contained in
Section 6.03 expressly made by the Owner Trustee;
(ii) with respect to any such claim, the Indemnified Party
shall have given the holder of the majority of the Certificate Percentage
Interest of the Class [_] Certificates written notice thereof promptly after
the Indemnified Party shall have actual knowledge thereof;
(iii) while maintaining control over its own defense, the
holder of the majority of the Certificate Percentage Interest of the Class [_]
Certificates shall consult with the Indemnified Party in preparing such
defense; and
(iv) notwithstanding anything in this Agreement to the
contrary, the holder of the majority of the Certificate Percentage Interest of
the Class [_] Certificates shall not be liable for settlement of any claim by
an Indemnified Party entered into without the prior consent of the holder of
the majority of the Certificate Percentage Interest of the Class [_]
Certificates which consent shall not be unreasonably withheld.
The indemnities contained in this Section shall survive the resignation
or termination of the Owner Trustee or the termination of this Trust
Agreement. In the event of any claim, action or proceeding for which indemnity
will be sought pursuant to this Section 7.02, the Owner
27
Trustee's choice of legal counsel, if other than the legal counsel retained by
the Owner Trustee in connection with the execution and delivery of this Trust
Agreement, shall be subject to the approval of the holder of the majority of
the Certificate Percentage Interest of the Class [_] Certificates, which
approval shall not be unreasonably withheld. In addition, upon written notice
to the Owner Trustee and with the consent of the Owner Trustee which consent
shall not be unreasonably withheld, the holder of the majority of the
Certificate Percentage Interest of the Class [_] Certificates has the right to
assume the defense of any claim, action or proceeding against the Owner
Trustee.
Section 7.03. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
Section 7.04. Non-recourse Obligations. Notwithstanding anything in
this Agreement or any Basic Document, the Owner Trustee agrees in its
individual capacity and in its capacity as Owner Trustee for the Trust that
all obligations of the Trust to the Owner Trustee individually or as Owner
Trustee for the Trust shall be recourse to the Owner Trust Estate only and
specifically shall not be recourse to the assets of any Certificateholder.
28
ARTICLE VIII.
Termination of Trust Agreement
Section 8.01. Termination of Trust Agreement.
(a) This Trust Agreement (other than this Article VIII) and the
Trust shall terminate and be of no further force or effect upon the later of
(x) the termination of the Term of the Policy (as defined in the Credit
Enhancement Instrument) and all amounts due to the Credit Enhancer have been
paid in full and (y) the earliest of (i) the final distribution of all moneys
or other property or proceeds of the Owner Trust Estate in accordance with the
terms of the Indenture and this Trust Agreement, (ii) the Payment Date in [__]
20[__], and (iii) the purchase by the Servicer of all Home Equity Loans
pursuant to Section 8.08(a) of the Servicing Agreement. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder shall
not (x) operate to terminate this Trust Agreement or the Trust or (y) entitle
such Certificateholder's legal representatives or heirs to claim an accounting
or to take any action or proceeding in any court for a partition or winding up
of all or any part of the Trust or the Owner Trust Estate or (z) otherwise
affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in Section 8.01(a), neither the Depositor
nor any Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Payment Date upon which Certificateholders shall surrender their Certificates
to the Certificate Paying Agent for payment of the final distribution and
cancellation, shall be given by the Certificate Paying Agent by letter to
Certificateholders and the Credit Enhancer mailed within five Business Days of
receipt of notice of such termination from the Owner Trustee, stating (i) the
Payment 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 Certificate Paying Agent therein designated, (ii) the amount of
any such final payment and (iii) that the Record Date otherwise applicable to
such Payment Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of the
Certificate Payment Agent therein specified. The Certificate Paying Agent
shall give such notice to the Owner Trustee and the Certificate Registrar at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, the Certificate Paying Agent shall cause to be
distributed to Certificateholders amounts distributable on such Payment Date
pursuant to Section 5.01.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Certificate Paying Agent shall give
a second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. Subject to applicable laws with respect to escheat of funds, if
within one year following the Payment Date on which final payment of the
Certificates was to have been made pursuant to Section 3.10, all the
Certificates shall not have been surrendered for cancellation, the Certificate
Paying Agent may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost
29
thereof shall be paid out of the funds and other assets that shall remain
subject to this Trust Agreement. Any funds remaining in the Certificate
Distribution Account after exhaustion of such remedies shall be distributed by
the Certificate Paying Agent to the holder of the majority of the Certificate
Percentage Interest of the Certificates.
(d) Upon the winding up of the Trust and its termination, the
Owner Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3820 of the [Delaware] Trust Statute.
30
ARTICLE IX.
Successor Owner Trustees and Additional Owner Trustees
Section 9.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of
Section 3807(a) of the [Delaware] Trust Statute; authorized to exercise
corporate trust powers; having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and having (or having a parent that has) long-term debt
obligations with a rating of at least A by Xxxxx'x and/or Standard & Poor's
and being acceptable to the Credit Enhancer. If such corporation shall publish
reports of condition at least annually pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purpose of
this Section, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Owner Trustee shall
cease to be eligible in accordance with the provisions of this Section 9.01,
the Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 9.02.
Section 9.02. Replacement of Owner Trustee. The Owner Trustee may at
any time resign and be discharged from the trusts hereby created by giving 30
days prior written notice thereof to the Credit Enhancer and the Depositor.
Upon receiving such notice of resignation, the Indenture Trustee shall
promptly appoint a successor Owner Trustee with the prior written consent of
the Credit Enhancer which will not be unreasonably withheld, by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the resigning Owner Trustee and one copy to the successor Owner Trustee. If no
successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee or the Credit Enhancer 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 9.01 and shall fail to resign after
written request therefor by the Indenture Trustee or the Credit Enhancer, 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 Indenture Trustee may
and shall at the direction of the Credit Enhancer remove the Owner Trustee. If
the Indenture Trustee shall remove the Owner Trustee under the authority of
the immediately preceding sentence, the Indenture Trustee shall promptly
appoint a successor Owner Trustee acceptable to the Credit Enhancer by written
instrument, in duplicate, one copy of which instrument shall be delivered to
the outgoing Owner Trustee so removed, one copy to the Credit Enhancer and one
copy to the successor Owner Trustee, and shall pay all fees owed to the
outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 9.03 and payment of all fees and expenses
owed to the outgoing Owner Trustee.
31
Section 9.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to
the Indenture Trustee, the Credit Enhancer and to its predecessor Owner
Trustee an instrument accepting such appointment under this Trust Agreement,
and thereupon the resignation or removal of the predecessor Owner Trustee
shall become effective, and such successor Owner Trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor under this Trust Agreement,
with like effect as if originally named as Owner Trustee. The predecessor
Owner Trustee shall upon payment of its fees and expenses deliver to the
successor Owner Trustee all documents and statements and monies held by it
under this Trust Agreement; 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 9.03 unless at the time of such acceptance such successor Owner
Trustee shall be eligible pursuant to Section 9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 9.03, the Certificate Registrar shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders, the Credit
Enhancer and the Rating Agencies. If the Certificate Registrar shall fail to
mail such notice within 10 days after acceptance of such appointment by the
successor Owner Trustee, the successor Owner Trustee shall cause such notice
to be mailed at the expense of the Trust.
Section 9.04. Merger or Consolidation of Owner Trustee. Any Person into
which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, without
the execution or filing of any instrument or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, that such Person shall be eligible pursuant to Section 9.01 and,
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Credit Enhancer and the Rating Agencies.
Section 9.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Trust Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate may at the time be located, the Owner Trustee
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons acceptable to the Credit Enhancer to act as co-trustee,
jointly with the Owner Trustee, or as separate trustee or trustees, of all or
any part of the Owner Trust Estate, and to vest in such Person, in such
capacity, such title to the Trust or any part thereof and, subject to the
other provisions of this Section, such powers, duties, obligations, rights and
trusts as the Owner Trustee may consider necessary or desirable. No co-trustee
or separate trustee under this Trust Agreement shall be required to meet the
terms of eligibility as a successor Owner Trustee pursuant to Section 9.01 and
no notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 9.03.
32
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) 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
Owner Trust Estate or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(b) No trustee under this Trust Agreement shall be personally
liable by reason of any act or omission of any other trustee under this Trust
Agreement; and
(c) The Owner Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Trust
Agreement and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Owner Trustee or separately, as may be provided therein,
subject to all the provisions of this Trust Agreement, specifically including
every provision of this Trust Agreement relating to the conduct of, affecting
the liability of, or affording protection to, the Owner Trustee. Each such
instrument shall be filed with the Owner Trustee and a copy thereof given to
the Depositor, the Servicer and the Credit Enhancer.
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
Trust Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
33
ARTICLE X.
Miscellaneous
Section 10.01. Amendments.
(a) This Trust Agreement may be amended from time to time by the
parties hereto, including the Certificate Registrar and Certificate Paying
Agent if affected by such amendment, as specified in this Section 10.01,
provided that any amendment, except as provided in subparagraph (e) below, be
accompanied by an Opinion of Counsel, to the Owner Trustee, acceptable to the
Credit Enhancer to the effect that such amendment (i) complies with the
provisions of this Section and (ii) will not cause the Trust to be subject to
an entity level tax.
(b) If the purpose of the amendment (as detailed therein) is to
correct any mistake, eliminate any inconsistency, cure any ambiguity or deal
with any matter not covered (i.e., to give effect to the intent of the
parties), it shall not be necessary to obtain the consent of any Holders, but
the Owner Trustee shall be furnished with (A) a letter from the Rating
Agencies that the amendment will not result in the downgrading or withdrawal
of the rating then assigned to any Security if determined without regard to
the Credit Enhancement Instrument and (B) an Opinion of Counsel, acceptable to
the Credit Enhancer to the effect that such action will not adversely affect
in any material respect the interests of any Holders, and the prior written
consent of the Credit Enhancer shall be obtained.
(c) If the purpose of the amendment is to prevent the imposition
of any federal or state taxes at any time that any Security is outstanding
(i.e., technical in nature), it shall not be necessary to obtain the consent
of any Holder, but the Owner Trustee shall be furnished with an Opinion of
Counsel, acceptable to the Credit Enhancer that such amendment is necessary or
helpful to prevent the imposition of such taxes and is not materially adverse
to any Holder and the prior written consent of the Credit Enhancer shall be
obtained.
(d) If the purpose of the amendment is to add or eliminate or
change any provision of the Trust Agreement other than as contemplated in (b)
and (c) above, the amendment shall require (A) the prior written consent of
the Credit Enhancer and an Opinion of Counsel, acceptable to the Credit
Enhancer to the effect that such action will not adversely affect in any
material respect the interests of any Holders and (B) either (a) a letter from
the Rating Agency that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to any security if determined without
regard to the Credit Enhancement Instrument or (b) the consent of Holders of
the Class [_] Certificates evidencing a majority of the Certificate Percentage
Interest of such Certificates and the Indenture Trustee; provided, however,
that no such amendment shall (i) reduce in any manner the amount of, or delay
the timing of, payments received that are required to be distributed on any
Certificate without the consent of the related Certificateholder and the
Credit Enhancer, or (ii) reduce the aforesaid percentage of Certificates the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all such Certificates then outstanding.
(e) If the purpose of the amendment is to provide for the
holding of any of the Certificates in book-entry form, it shall require the
consent of Holders of all such Certificates
34
then outstanding; provided, that the Opinion of Counsel specified in
subparagraph (a) above shall not be required.
(f) If the purpose of the amendment is to provide for the
issuance of additional certificates representing an interest in the Trust, it
shall not be necessary to obtain the consent of any Holder, but the Owner
Trustee shall be furnished with (A) an Opinion of Counsel to the effect that
such action will not adversely affect in any material respect the interests of
any Holders and (B) a letter from the Rating Agencies that the amendment will
not result in the downgrading or withdrawal of the rating then assigned to any
Security, if determined without regard to the Credit Enhancement Instrument
and the prior written consent of the Credit Enhancer shall be obtained.
(g) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to each Certificateholder, the Indenture Trustee,
the Credit Enhancer and each of the Rating Agencies. It shall not be necessary
for the consent of Certificateholders or the Indenture Trustee pursuant to
this Section 10.01 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 Trust 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.
(h) In connection with the execution of any amendment to any
agreement to which the Trust is a party, other than this Trust Agreement, the
Owner Trustee shall be entitled to receive and conclusively rely upon an
Opinion of Counsel, acceptable to the Credit Enhancer to the effect that such
amendment is authorized or permitted by the documents subject to such
amendment and that all conditions precedent in the Basic Documents for the
execution and delivery thereof by the Trust or the Owner Trustee, as the case
may be, have been satisfied.
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 of the State of [Delaware].
Section 10.02. No Legal Title to Owner Trust Estate. 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 beneficial interest therein only in accordance with
Articles V and VIII. 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 Trust
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 10.03. Limitations on Rights of Others. Except for Section 2.07,
the provisions of this Trust Agreement are solely for the benefit of the Owner
Trustee, the Depositor, the Certificateholders, the Credit Enhancer and, to
the extent expressly provided herein, the Indenture Trustee and the
Noteholders, and nothing in this Trust Agreement (other than Section 2.07),
whether express or implied, shall be construed to give to any other Person any
35
legal or equitable right, remedy or claim in the Owner Trust Estate or under
or in respect of this Trust Agreement or any covenants, conditions or
provisions contained herein.
Section 10.04. Notices.
(a) Unless otherwise expressly specified or permitted by the
terms hereof, all notices shall be in writing and shall be deemed given upon
receipt, if to the Owner Trustee, addressed to [_______], [address]; if to the
Depositor, addressed to [________]; [address] if to the Credit Enhancer,
addressed to [________], [address], Attention: [______] Re: [________], Series
[___], Confirmation: [_______], Telecopy No. [_______] (in each case in which
notice or other communication to the Credit Enhancer refers to an Event of
Default, a claim on the Credit Enhancement Instrument or with respect to which
failure on the part of the Credit Enhancer to respond shall be deemed to
constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the [_______] and shall
be marked to indicate "URGENT MATERIAL ENCLOSED"; if to the Certificate Paying
Agent or Certificate Registrar, to [address], Attention: [_______]; with a
copy to the Indenture Trustee's Corporate Trust Office; if to the Rating
Agencies, addressed to [___________], [address] and [___________], [address],
Attention: [_____] or, as to each party, at such other address as shall be
designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Trust Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
(c) A copy of any notice delivered to the Owner Trustee or the
Trust shall also be delivered to the Depositor and the Credit Enhancer.
Section 10.05. Severability. Any provision of this Trust Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 10.06. Separate Counterparts. This Trust 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 10.07. Successors and Assigns. All representations, warranties,
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, each of the Depositor, the Owner Trustee and its successors
and each Certificateholder and its successors and permitted assigns, all as
herein provided and the Credit Enhancer. Any request, notice, direction,
consent, waiver or other instrument or action by a Certificateholder shall
bind the successors and assigns of such Certificateholder.
Section 10.08. No Petition. The Owner Trustee, by entering into this
Trust Agreement and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will
36
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 proceedings
under any United States federal or state bankruptcy or similar law in
connection with any obligations to the Certificates, the Notes, this Trust
Agreement or any of the Basic Documents.
Section 10.09. No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Depositor, the Seller, the Owner Trustee, the Indenture
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 Trust Agreement, the Certificates or the Basic Documents.
Section 10.10. 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 10.11. GOVERNING LAW. THIS TRUST 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 10.12. Integration. This Trust Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understanding pertaining thereto.
Section 10.13. Rights of Credit Enhancer to Exercise Rights of
Certificateholders. By accepting its Certificate, each Certificateholder
agrees that unless a Credit Enhancer Default exists, the Credit Enhancer shall
have the right to exercise all rights of the Certificateholders under this
Agreement without any further consent of the Certificateholders. Nothing in
this Section, however, shall alter or modify in any way, the fiduciary
obligations of the Owner Trustee to the Certificateholders pursuant to this
Agreement, or create any fiduciary obligation of the Owner Trustee to the
Credit Enhancer.
Section 10.14. Third Party Beneficiary. The Credit Enhancer is an
intended third party beneficiary of this Agreement, entitled to enforce the
provisions hereof as if a party hereto.
37
IN WITNESS WHEREOF, the Depositor and the Owner Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
XXXXXX XXXXXXX ABS CAPITAL I INC.
By: /_____________________________________
Name: [_______]
Title: [_______]
[_______]
as Owner Trustee
By: /_____________________________________
Name: [_______]
Title: [_______]
Acknowledged and Agreed:
[__________]
as Certificate Registrar
and Certificate Paying Agent
By: _____________________________
Name: [_______]
Title: [_______]
38
EXHIBIT A-1
FORM OF CLASS [_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES
AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
THIS CERTIFICATE IS ISSUED IN THE CERTIFICATE PERCENTAGE INTEREST
BELOW. THE HOLDER OF THIS CERTIFICATE HEREBY CONSENTS TO ANY CHANGE IN ITS
CERTIFICATE PERCENTAGE INTEREST IN ACCORDANCE WITH SUCH SECTION.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE TRUST AGREEMENT (THE
"AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
CERTIFICATE REGISTRAR SHALL HAVE RECEIVED EITHER (i) A REPRESENTATION LETTER
FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER BENEFIT PLAN SUBJECT TO THE PROHIBITED
TRANSACTION RESTRICTIONS AND THE FIDUCIARY RESPONSIBILITY REQUIREMENTS OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"), A PERSON
ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY SUCH PLAN OR A PERSON USING
"PLAN ASSETS," WITHIN THE MEANING OF THE DEPARTMENT OF LABOR REGULATION AT 29
C.F.R. ss.2510.3-101, TO ACQUIRE THIS CERTIFICATE (COLLECTIVELY A "PLAN
INVESTOR"), OR (ii) AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT
ENACTMENTS) AND WILL NOT SUBJECT THE DEPOSITOR, THE OWNER TRUSTEE, THE
SERVICER, THE CREDIT ENHANCER OR THE CERTIFICATE REGISTRAR TO ANY OBLIGATION
OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THE TRANSFEREE OF THIS CERTIFICATE SHALL BE SUBJECT TO UNITED
STATES FEDERAL WITHHOLDING TAX UNLESS THE CERTIFICATE REGISTRAR SHALL HAVE
RECEIVED A CERTIFICATE OF NON-FOREIGN
A-1-1
STATUS CERTIFYING AS TO THE TRANSFEREE'S STATUS AS A U.S. PERSON OR
CORPORATION OR PARTNERSHIP UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE SELLER, THE COMPANY, THE SERVICER, THE INDENTURE TRUSTEE, OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE AGREEMENT OR THE BASIC DOCUMENTS.
A-1-2
Certificate No. ____
Cut-off Date:
[___], 20[__]
Date of Trust Agreement:
[___], 20[__]
First Payment Date: Certificate Percentage Interest of
[____], 20[__] this Certificate: ____________%]
Assumed Final Payment Date: CUSIP [_____]
[______________]
SERIES [___], CLASS [_]
evidencing a fractional undivided beneficial ownership interest in the
Owner Trust Estate, the property of which consists primarily of the Home
Equity Loans, created by XXXXXX XXXXXXX ABS CAPITAL I INC. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement
referred to below).
This Certificate is payable solely from the assets of the Owner
Trust Estate, and does not represent an obligation of or interest in the
Depositor, the Seller, the Servicer, the Indenture Trustee, the Credit
Enhancer or the Owner Trustee or any of their affiliates. This Certificate is
not guaranteed or insured by any governmental agency or instrumentality or by
the Depositor, the Seller, the Servicer, the Indenture Trustee or the Owner
Trustee or any of their affiliates. None of the Depositor, the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that [name of Holder] is the registered owner of
the Security Balance evidenced by this Certificate (as set forth on the face
hereof) in certain distributions with respect to the Owner Trust Estate,
consisting primarily of the Home Equity Loans, created by Xxxxxx Xxxxxxx ABS
Capital I Inc. The Trust (as defined herein) was created pursuant to a Trust
Agreement dated as specified above (as amended and supplemented from time to
time, the "Agreement") between the Depositor and [_______], as owner trustee
(the "Owner Trustee," which term includes any successor entity under the
Agreement), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the [__] day of each month or, if such [__] day is not a Business Day,
the Business Day immediately
A-1-3
following (the "Payment Date"), commencing on the first Payment Date specified
above, to the Person in whose name this Certificate is registered at the close
of business on the last day (or if such last day is not a Business Day, the
Business Day immediately preceding such last day) of the month immediately
preceding the month of such distribution (the "Record Date"), in an amount
equal to the pro rata portion evidenced by this Certificate (based on the
Certificate Percentage Interest stated on the face hereon) of the Certificate
Distribution Amount, if any, required to be distributed to Holders of the
Class [_] Certificates on such Payment Date. Distributions on this Certificate
will be made as provided in the Agreement by the Certificate Paying Agent by
wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon.
Except as otherwise provided in the Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Certificate Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the Corporate
Trust Office. The initial Security Balance of this Certificate is set forth
above. The Security Balance hereof will be reduced to the extent of the
distributions allocable to principal.
No transfer of this Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance
with said Act and laws. In the event that such a transfer is to be made, (i)
the Certificate Registrar, the Credit Enhancer or the Depositor may require an
opinion of counsel acceptable to and in form and substance satisfactory to the
Certificate Registrar, the Credit Enhancer and the Depositor that such
transfer is exempt (describing the applicable exemption and the basis
therefor) from or is being made pursuant to the registration requirements of
the Securities Act of 1933, as amended, and of any applicable statute of any
state and (ii) the transferee shall execute an investment letter in the form
described in the Agreement and (iii) the Certificate Registrar shall require
the transferee to execute an investment letter and a Certificate of
Non-Foreign Status in the form described by the Agreement (or if a Certificate
of Non-Foreign Status is not provided, an Opinion of Counsel as described in
the Agreement), which investment letter and certificate or Opinion of Counsel
shall not be at the expense of the Trust, the Owner Trustee, the Certificate
Registrar, the Credit Enhancer or the Depositor. The Holder hereof desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trust, the
Owner Trustee, the Depositor, the Servicer, the Credit Enhancer and the
Certificate Registrar against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.
In connection with any such transfer, the Certificate Registrar (unless
otherwise directed by the Depositor) will also require either (i) a
representation letter, in the form as described by the Agreement, stating that
the transferee is not an employee benefit or other plan subject to the
prohibited transaction restrictions or the fiduciary responsibility
requirements of ERISA or Section 4975 of the Code ("Plan"), any person acting,
directly or indirectly, on behalf of any such plan or any person using the
"plan assets," within the meaning of the Department of Labor regulations at 29
C.F.R. ss.2510.3-101, to effect such acquisition (collectively, a "Plan
Investor") or (ii) if such transferee is a Plan Investor, an Opinion of
Counsel acceptable to and in form and substance satisfactory to the Depositor,
the Owner Trustee, the Servicer, the Credit Enhancer and the Certificate
Registrar to the effect that the purchase or holding of the Certificate is
permissible under applicable law, will not constitute
A-1-4
or result in a prohibited transaction under Section 406 of ERISA or Section
4975 of the Code (or comparable provisions of any subsequent enactments) and
will not subject the Depositor, the Owner Trustee, the Servicer, the Credit
Enhancer or the Certificate Registrar to any obligation or liability in
addition to those undertaken in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as [________] Certificates of the Series specified hereon (herein
collectively called the "Certificates"). All terms used in this Certificate
which are defined in the Agreement shall have the meanings assigned to them in
the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Certificate
Distribution Account that have been released from the Lien of the Indenture
for payment hereunder and that neither the Owner Trustee in its individual
capacity, the Credit Enhancer nor the Depositor is personally liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
The Holder of this Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Indenture,
dated as of [___], 20[__] between [________] (the "Trust") and [__________].
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Depositor, 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 or similar law in connection with any
obligations relating to the Certificates, the Notes, the Agreement or any of
the Basic Documents.
The Agreement permits the amendment thereof as specified below,
provided that any amendment be accompanied by the consent of the Credit
Enhancer and an Opinion of Counsel to the Owner Trustee and acceptable to the
Credit Enhancer to the effect that such amendment complies with the provisions
of the Agreement and will not cause the Trust to be subject to an entity level
tax. If the purpose of the amendment is to correct any mistake, eliminate any
inconsistency, cure any ambiguity or deal with any matter not covered, it
shall not be necessary to obtain the consent of any Holder, but the Owner
Trustee shall be furnished with a letter from the Rating Agencies that the
amendment will not result in the downgrading or withdrawal of the rating then
assigned to any Security if determined without regard to the Credit
Enhancement Instrument and the counsel of the Credit Enhancer shall be
obtained. If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Security is outstanding, it shall
not be necessary to obtain the consent of any Holder, but the Owner Trustee
shall be furnished with an Opinion of Counsel that such amendment is necessary
or helpful to prevent the imposition of such taxes and is not materially
adverse to any Holder and the consent of the Credit Enhancer shall be
obtained. If the purpose of the amendment is to add or eliminate or change any
provision of the Agreement, other than as specified in the preceding two
sentences, the amendment shall require the consent of the Credit Enhancer and
either (a) a letter from the Rating Agencies that the amendment will not
result in
A-1-5
the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the Credit Enhancement Instrument or (b) the
consent of Holders of a majority of the Certificate Percentage Interests of
the Class [_] Certificates and the Indenture Trustee; provided, however, that
no such amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments received that are required to be distributed on any
Certificate without the consent of the related Certificateholder, or (ii)
reduce the aforesaid percentage of Certificates the Holders of which are
required to consent to any such amendment without the consent of the Holders
of all such Certificates then outstanding.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office of the Certificate Registrar,
accompanied by a written instrument of transfer in form satisfactory to the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and
aggregate Certificate Percentage Interest will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Agreement is
the Indenture Trustee.
Except as provided in the Agreement, the Certificates are issuable
only in minimum denominations of a [__]% Certificate Percentage Interest and
in integral multiples of a [__]% Certificate Percentage Interest in excess
thereof. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of
authorized denominations, as requested by the Holder surrendering the same.
This Certificate is issued in the Certificate Percentage Interest above. The
Holder of this Certificate hereby consents to any change in its Certificate
Percentage Interest in accordance with such Section.
No service charge will be made for any such registration of
transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee, the Certificate Paying Agent, or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Owner
Trustee, the Certificate Paying Agent, the Certificate Registrar or any such
agent shall be affected by any notice to the contrary.
This Certificate shall be governed by and construed in accordance
with the laws of the State of [Delaware].
The obligations created by the Agreement in respect of the
Certificates and the Trust created thereby shall terminate upon the later of
(x) the termination of the Term of the Policy (as defined in the Credit
Enhancement Instrument) and the payment in full of all amounts due to the
Credit Enhancer and (y) the earliest of (i) the final distribution of all
moneys or other property or proceeds of the Owner Trust Estate in accordance
with the terms of the Indenture and the Agreement, (ii) the Payment Date in
[__] 20[__], and (iii) the purchase by the Servicer of all Home Equity Loans
pursuant to Section 8.08(a) of the Servicing Agreement.
A-1-6
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, or an authenticating
agent by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-1-7
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
Dated: __________________________________________
By: _____________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within mentioned
Agreement.
[_______],
not in its individual capacity
but solely as Owner Trustee
By: _____________________________
Authorized Signatory
or ____________________________,
as Authenticating Agent of the Trust
By: _____________________________
Authorized Signatory
A-1-8
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
_________________________________*/
Signature Guaranteed:
_________________________________*/
-----------------
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial
bank or trust company.
A-1-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately available
funds to ______________________________________________
_________________________________________________________________
for the account of ________________________________________, account number
______________, or, if mailed by check, to ______________.
Applicable statements should be mailed to __________________.
______________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
X-0-00
XXXXXXX X-0
FORM OF CLASS [_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE NOTES
AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
THIS CERTIFICATE IS ISSUED IN THE CERTIFICATE PERCENTAGE INTEREST
BELOW. THE HOLDER OF THIS CERTIFICATE HEREBY CONSENTS TO ANY CHANGE IN ITS
CERTIFICATE PERCENTAGE INTEREST IN ACCORDANCE WITH SUCH SECTION.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND
MAY NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT
AND LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3.05 OF THE TRUST AGREEMENT (THE
"AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE
CERTIFICATE REGISTRAR SHALL HAVE RECEIVED EITHER (i) A REPRESENTATION LETTER
FROM THE TRANSFEREE OF THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS
NOT AN EMPLOYEE BENEFIT PLAN OR OTHER BENEFIT PLAN SUBJECT TO THE PROHIBITED
TRANSACTION RESTRICTIONS AND THE FIDUCIARY RESPONSIBILITY REQUIREMENTS OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986 (THE "CODE"), A PERSON
ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY SUCH PLAN OR A PERSON USING
"PLAN ASSETS," WITHIN THE MEANING OF THE DEPARTMENT OF LABOR REGULATION AT 29
C.F.R. ss.2510.3-101, TO ACQUIRE THIS CERTIFICATE (COLLECTIVELY A "PLAN
INVESTOR"), OR (ii) AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR
SECTION 4975 OF THE CODE (OR COMPARABLE PROVISIONS OF ANY SUBSEQUENT
ENACTMENTS) AND WILL NOT SUBJECT THE DEPOSITOR, THE OWNER TRUSTEE, THE
SERVICER, THE CREDIT ENHANCER OR THE CERTIFICATE REGISTRAR TO ANY OBLIGATION
OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
THE TRANSFEREE OF THIS CERTIFICATE SHALL BE SUBJECT TO UNITED
STATES FEDERAL WITHHOLDING TAX UNLESS THE CERTIFICATE REGISTRAR SHALL HAVE
RECEIVED A CERTIFICATE OF NON-FOREIGN
A-2-1
STATUS CERTIFYING AS TO THE TRANSFEREE'S STATUS AS A U.S. PERSON OR
CORPORATION OR PARTNERSHIP UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION
OF THE SELLER, THE COMPANY, THE SERVICER, THE INDENTURE TRUSTEE, OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE AGREEMENT OR THE BASIC DOCUMENTS.
A-2-2
Certificate No. ____
Cut-off Date:
[___], 20[__]
Date of Trust Agreement:
[___], 20[__]
First Payment Date: Certificate Percentage Interest of
[____], 20[__] this Certificate: ____________%]
Assumed Final Payment Date: CUSIP [_____]
[_______________]
SERIES [___], CLASS [_]
evidencing a fractional undivided beneficial ownership interest in the
Owner Trust Estate, the property of which consists primarily of the Home
Equity Loans, created by XXXXXX XXXXXXX ABS CAPITAL I INC. (hereinafter called
the "Depositor," which term includes any successor entity under the Agreement
referred to below).
This Certificate is payable solely from the assets of the Owner
Trust Estate, and does not represent an obligation of or interest in the
Depositor, the Seller, the Servicer, the Indenture Trustee, the Credit
Enhancer or the Owner Trustee or any of their affiliates. This Certificate is
not guaranteed or insured by any governmental agency or instrumentality or by
the Depositor, the Seller, the Servicer, the Indenture Trustee or the Owner
Trustee or any of their affiliates. None of the Depositor, the Seller, the
Servicer, the Indenture Trustee or the Owner Trustee or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that [name of Holder] is the registered owner of
the Security Balance evidenced by this Certificate (as set forth on the face
hereof) in certain distributions with respect to the Owner Trust Estate,
consisting primarily of the Home Equity Loans, created by Xxxxxx Xxxxxxx ABS
Capital I Inc. The Trust (as defined herein) was created pursuant to a Trust
Agreement dated as specified above (as amended and supplemented from time to
time, the "Agreement") between the Depositor and [_______], as owner trustee
(the "Owner Trustee," which term includes any successor entity under the
Agreement), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be
made on the [__] day of each month or, if such [__] day is not a Business Day,
the Business Day immediately
A-2-3
following (the "Payment Date"), commencing on the first Payment Date specified
above, to the Person in whose name this Certificate is registered at the close
of business on the last day (or if such last day is not a Business Day, the
Business Day immediately preceding such last day) of the month immediately
preceding the month of such distribution (the "Record Date"), in an amount
equal to the pro rata portion evidenced by this Certificate (based on the
Certificate Percentage Interest stated on the face hereon) of the Certificate
Distribution Amount, if any, required to be distributed to Holders of the
Class [_] Certificates on such Payment Date. Distributions on this Certificate
will be made as provided in the Agreement by the Certificate Paying Agent by
wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon.
Except as otherwise provided in the Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Certificate Paying Agent of the pendency of such distribution
and only upon presentation and surrender of this Certificate at the Corporate
Trust Office. The initial Security Balance of this Certificate is set forth
above. The Security Balance hereof will be reduced to the extent of the
distributions allocable to principal.
No transfer of this Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance
with said Act and laws. In the event that such a transfer is to be made, (i)
the Certificate Registrar, the Credit Enhancer or the Depositor may require an
opinion of counsel acceptable to and in form and substance satisfactory to the
Certificate Registrar, the Credit Enhancer and the Depositor that such
transfer is exempt (describing the applicable exemption and the basis
therefor) from or is being made pursuant to the registration requirements of
the Securities Act of 1933, as amended, and of any applicable statute of any
state and (ii) the transferee shall execute an investment letter in the form
described in the Agreement and (iii) the Certificate Registrar shall require
the transferee to execute an investment letter and a Certificate of
Non-Foreign Status in the form described by the Agreement (or if a Certificate
of Non-Foreign Status is not provided, an Opinion of Counsel as described in
the Agreement), which investment letter and certificate or Opinion of Counsel
shall not be at the expense of the Trust, the Owner Trustee, the Certificate
Registrar, the Credit Enhancer or the Depositor. The Holder hereof desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trust, the
Owner Trustee, the Depositor, the Servicer, the Credit Enhancer and the
Certificate Registrar against any liability that may result if the transfer is
not so exempt or is not made in accordance with such federal and state laws.
In connection with any such transfer, the Certificate Registrar (unless
otherwise directed by the Depositor) will also require either (i) a
representation letter, in the form as described by the Agreement, stating that
the transferee is not an employee benefit or other plan subject to the
prohibited transaction restrictions or the fiduciary responsibility
requirements of ERISA or Section 4975 of the Code ("Plan"), any person acting,
directly or indirectly, on behalf of any such plan or any person using the
"plan assets," within the meaning of the Department of Labor regulations at 29
C.F.R. ss.2510.3-101, to effect such acquisition (collectively, a "Plan
Investor") or (ii) if such transferee is a Plan Investor, an Opinion of
Counsel acceptable to and in form and substance satisfactory to the Depositor,
the Owner Trustee, the Servicer, the Credit Enhancer and the Certificate
Registrar to the effect that the purchase or holding of the Certificate is
permissible under applicable law, will not constitute
A-2-4
or result in a prohibited transaction under Section 406 of ERISA or Section
4975 of the Code (or comparable provisions of any subsequent enactments) and
will not subject the Depositor, the Owner Trustee, the Servicer, the Credit
Enhancer or the Certificate Registrar to any obligation or liability in
addition to those undertaken in the Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as [________] Certificates of the Series specified hereon (herein
collectively called the "Certificates"). All terms used in this Certificate
which are defined in the Agreement shall have the meanings assigned to them in
the Agreement.
The Certificateholder, by its acceptance of this Certificate,
agrees that it will look solely to the funds on deposit in the Certificate
Distribution Account that have been released from the Lien of the Indenture
for payment hereunder and that neither the Owner Trustee in its individual
capacity, the Credit Enhancer nor the Depositor is personally liable to the
Certificateholders for any amount payable under this Certificate or the
Agreement or, except as expressly provided in the Agreement, subject to any
liability under the Agreement.
The Holder of this Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Indenture,
dated as of [___], 20[__] between [________] (the "Trust") and [__________].
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Depositor, 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 or similar law in connection with any
obligations relating to the Certificates, the Notes, the Agreement or any of
the Basic Documents.
The Agreement permits the amendment thereof as specified below,
provided that any amendment be accompanied by the consent of the Credit
Enhancer and an Opinion of Counsel to the Owner Trustee and acceptable to the
Credit Enhancer to the effect that such amendment complies with the provisions
of the Agreement and will not cause the Trust to be subject to an entity level
tax. If the purpose of the amendment is to correct any mistake, eliminate any
inconsistency, cure any ambiguity or deal with any matter not covered, it
shall not be necessary to obtain the consent of any Holder, but the Owner
Trustee shall be furnished with a letter from the Rating Agencies that the
amendment will not result in the downgrading or withdrawal of the rating then
assigned to any Security if determined without regard to the Credit
Enhancement Instrument and the counsel of the Credit Enhancer shall be
obtained. If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Security is outstanding, it shall
not be necessary to obtain the consent of any Holder, but the Owner Trustee
shall be furnished with an Opinion of Counsel that such amendment is necessary
or helpful to prevent the imposition of such taxes and is not materially
adverse to any Holder and the consent of the Credit Enhancer shall be
obtained. If the purpose of the amendment is to add or eliminate or change any
provision of the Agreement, other than as specified in the preceding two
sentences, the amendment shall require the consent of the Credit Enhancer and
either (a) a letter from the Rating Agencies that the amendment will not
result in
A-2-5
the downgrading or withdrawal of the rating then assigned to any Security, if
determined without regard to the Credit Enhancement Instrument or (b) the
consent of Holders of a majority of the Certificate Percentage Interests of
the Class [_] Certificates and the Indenture Trustee; provided, however, that
no such amendment shall (i) reduce in any manner the amount of, or delay the
timing of, payments received that are required to be distributed on any
Certificate without the consent of the related Certificateholder, or (ii)
reduce the aforesaid percentage of Certificates the Holders of which are
required to consent to any such amendment without the consent of the Holders
of all such Certificates then outstanding.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office of the Certificate Registrar,
accompanied by a written instrument of transfer in form satisfactory to the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new
Certificates of authorized denominations evidencing the same Class and
aggregate Certificate Percentage Interest will be issued to the designated
transferee. The initial Certificate Registrar appointed under the Agreement is
the Indenture Trustee.
Except as provided in the Agreement, the Certificates are issuable
only in minimum denominations of a [__]% Certificate Percentage Interest and
in integral multiples of a [__]% Certificate Percentage Interest in excess
thereof. As provided in the Agreement and subject to certain limitations
therein set forth, the Certificates are exchangeable for new Certificates of
authorized denominations, as requested by the Holder surrendering the same.
This Certificate is issued in the Certificate Percentage Interest above. The
Holder of this Certificate hereby consents to any change in its Certificate
Percentage Interest in accordance with such Section.
No service charge will be made for any such registration of
transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee, the Certificate Paying Agent, or
the Certificate Registrar may treat the Person in whose name this Certificate
is registered as the owner hereof for all purposes, and none of the Owner
Trustee, the Certificate Paying Agent, the Certificate Registrar or any such
agent shall be affected by any notice to the contrary.
This Certificate shall be governed by and construed in accordance
with the laws of the State of [Delaware].
The obligations created by the Agreement in respect of the
Certificates and the Trust created thereby shall terminate upon the later of
(x) the termination of the Term of the Policy (as defined in the Credit
Enhancement Instrument) and the payment in full of all amounts due to the
Credit Enhancer and (y) the earliest of (i) the final distribution of all
moneys or other property or proceeds of the Owner Trust Estate in accordance
with the terms of the Indenture and the Agreement, (ii) the Payment Date in
[__] 20[__], and (iii) the purchase by the Servicer of all Home Equity Loans
pursuant to Section 8.08(a) of the Servicing Agreement.
A-2-6
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, or an authenticating
agent by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.
A-2-7
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
Dated: __________________________________________
By: _____________________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within mentioned
Agreement.
[_______],
not in its individual capacity
but solely as Owner Trustee
By: _____________________________
Authorized Signatory
or ____________________________,
as Authenticating Agent of the Trust
By: _____________________________
Authorized Signatory
A-2-8
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
(Please print or type name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
_________________________________*/
Signature Guaranteed:
_________________________________*/
-----------------
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular,
without alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial
bank or trust company.
A-2-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately available
funds to ______________________________________________
_________________________________________________________________
for the account of ________________________________________, account number
______________, or, if mailed by check, to ______________.
Applicable statements should be mailed to __________________.
______________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
A-2-10
EXHIBIT B
TO THE TRUST AGREEMENT
CERTIFICATE OF TRUST
OF
[________]
This Certificate of Trust of [________] (the "Trust") is being duly
executed and filed on behalf of the Trust by [_______], a [Delaware] banking
corporation, as trustee, to form a statutory trust under the [Delaware]
Statutory Trust Act (12 Del. C. Section 3801 et seq.)(the "Act").
1. Name. The name of the trust formed hereby is [________]
2. [Delaware] Trustee. The name and the business address of the trustee
of the Trust in the State of [Delaware] is [_______], [address], Attention:
[__].
3. Effective Date. This Certificate of Trust shall be filed on [____],
20[__] with an effective date of [____], 20[__].
IN WITNESS HEREOF, the undersigned has duly executed this Certificate of
Trust in accordance with Section 3811(a) of the Act.
[_______], not in its individual capacity but
solely as Owner Trustee of the Trust
By: ______________________________
Name:
Title:
B-1
EXHIBIT C
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the
undersigned buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of
the Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security with, any
person in any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that would
constitute a distribution of the Rule 144A Securities under the Securities Act
of 1933, as amended (the "1933 Act"), or that would render the disposition of
the Rule 144A Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, and that the Seller has not offered the Rule
144A Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the
Owner Trustee, the Credit Enhancer and the Depositor (as defined in the Trust
Agreement (the "Agreement"), dated as of [___], 20[__] between Xxxxxx Xxxxxxx
ABS Capital I Inc., as Depositor and [_______] as Owner Trustee pursuant to
Section 3.05 of the Agreement and [__________] as indenture trustee), as
follows:
a. The Buyer understands that the Rule 144A Securities have
not been registered under the 1933 Act or the securities laws of
any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters that it is capable of evaluating
the merits and risks of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Seller, the Indenture Trustee, the Owner Trustee, the Credit
Enhancer or the Servicer.
C-1
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or
any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with
respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action,
that would constitute a distribution of the Rule 144A Securities
under the 1933 Act or that would render the disposition of the
Rule 144A Securities a violation of Section 5 of the 1933 Act or
require registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner
with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that
term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached
hereto as Annex 1 or Annex 2. The Buyer is aware that the sale to
it is being made in reliance on Rule 144A. The Buyer is acquiring
the Rule 144A Securities for its own account or the accounts of
other qualified institutional buyers, understands that such Rule
144A Securities may be resold, pledged or transferred only (i) to
a person reasonably believed to be a qualified institutional buyer
that purchases for its own account or for the account of a
qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A,
or (ii) pursuant to another exemption from registration under the
1933 Act.
3. The Buyer represents that:
(i) either (a) or (b) is satisfied, as marked below:
____ a. The Buyer is not an employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or the Internal Revenue Code of 1986 (the "Code"), a Person
acting, directly or indirectly, on behalf of any such plan or Person
acquiring such Certificates with "plan assets" of a Plan within the
meaning of the Department of Labor regulation promulgated at 29 C.F.R.
ss.2510.3-101; or
____ b. The Buyer has provided the Depositor, the Owner
Trustee, the Certificate Registrar, the Credit Enhancer and the Servicer
with an opinion of counsel, satisfactory to the Depositor, the Owner
Trustee, the Certificate Registrar, the Credit Enhancer and the
Servicer, to the effect that the purchase and holding of a Certificate
by or on behalf of the Buyer is permissible under applicable law, will
not constitute or result in a prohibited transaction under Section 406
of ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments) and will not subject the Depositor, the Owner
Trustee, the Certificate Registrar, the Credit Enhancer or the Servicer
to any obligation or liability (including liabilities under ERISA or
Section
C-2
4975 of the Code) in addition to those undertaken in the Trust
Agreement, which opinion of counsel shall not be an expense of the
Depositor, the Owner Trustee, the Certificate Registrar, the Credit
Enhancer or the Servicer; and
(i) the Buyer is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406 and 407
of ERISA and Section 4975 of the Code and understands that each of the parties
to which this certification is made is relying and will continue to rely on
the statements made in this paragraph 3.
4. This document may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when
so executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document
as of the date set forth below.
___________________________________ ___________________________________
Print Name of Seller Print Name of Buyer
By:________________________________ By:________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.________________________________ No.________________________________
Date:______________________________ Date:______________________________
C-3
ANNEX 1 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $______________________(1) in securities
(except for the excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in accordance
with Rule 144A) and (ii) the Buyer satisfies the criteria in the category
marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or charitable
organization described in Section 501(c)(3) of the Internal Revenue
Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking and
is supervised by the State or territorial banking commission or similar
official or is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $[__] as demonstrated in its latest annual
financial statements, a copy of which is attached hereto.
---------
(1) Buyer must own and/or invest on a discretionary basis at least $[__] in
securities unless Buyer is a dealer, and, in that case, Buyer must own
and/or invest on a discretionary basis at least $[__] in securities.
C-4
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined by
a State or Federal authority having supervision over any such
institutions or is a foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least $[__] as
demonstrated in its latest annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act of
1974.
___ Investment Adviser. The Buyer is an investment adviser
registered under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company
licensed by the U.S. Small Business Administration under Section 301(c)
or (d) of the Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business
development company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank
or trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions, or
any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee benefit
plans within the meaning of Title I of the Employee Retirement Income
Security Act of 1974, but is not a trust fund that includes as
participants individual retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer
is a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject
to a repurchase agreement and (vii) currency, interest rate and commodity
swaps.
C-5
4. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph. Further, in determining
such aggregate amount, the Buyer may have included securities owned by
subsidiaries of the Buyer, but only if such subsidiaries are consolidated with
the Buyer in its financial statements prepared in accordance with generally
accepted accounting principles and if the investments of such subsidiaries are
managed under the Buyer's direction. However, such securities were not
included if the Buyer is a majority-owned, consolidated subsidiary of another
enterprise and the Buyer is not itself a reporting company under the
Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A
and understands that the seller to it and other parties related to the Rule
144A Securities are relying and will continue to rely on the statements made
herein because one or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer
for the account of a third party (including any separate account) in reliance
on Rule 144A, the Buyer will only purchase for the account of a third party
that at the time is a "qualified institutional buyer" within the meaning of
Rule 144A. In addition, the Buyer agrees that the Buyer will not purchase
securities for a third party unless the Buyer has obtained a current
representation letter from such third party or taken other appropriate steps
contemplated by Rule 144A to conclude that such third party independently
meets the definition of "qualified institutional buyer" set forth in Rule
144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions
herein. Until such notice is given, the Buyer's purchase of Rule 144A
Securities will constitute a reaffirmation of this certification as of the
date of such purchase.
________________________________________________
Print Name of Buyer
By:_____________________________________________
Name:
Title:
Date:___________________________________________
C-6
ANNEX 2 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $[__] in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year. For purposes of determining the amount of securities owned
by the Buyer or the Buyer's Family of Investment Companies, the cost of such
securities was used.
____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned
in the aggregate $______________ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated in
accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein
means two or more registered investment companies (or series thereof) that
have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because
one investment adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and
certificates of deposit, (iii) loan participations, (iv) repurchase
agreements, (v) securities owned but subject to a repurchase agreement and
(vi) currency, interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made are relying and will
continue to rely on the statements
C-7
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
________________________________________________
Print Name of Buyer
By: __________________________________________
Name:
Title:
IF AN ADVISER:
________________________________________________
Print Name of Buyer
Date:___________________________________________
C-8
EXHIBIT D
FORM OF INVESTOR REPRESENTATION LETTER
_________________, 20____
Xxxxxx Xxxxxxx ABS Capital I Inc.
[__________]
[__________]
[__________]
[__________].
[__________]
Attention: [__]
Re: [_______]
Series [___], Class [__]
----------------------------------
Ladies and Gentlemen:
______________________ (the "Purchaser") intends to purchase from
__________________ (the "Seller") a ___% Certificate Percentage Interest of
Certificates of Series [___], Class [ ] (the "Certificates"), issued pursuant
to the Trust Agreement (the "Trust Agreement"), dated as of [___], 20[__],
between Xxxxxx Xxxxxxx ABS Capital I Inc. as depositor (the "Company") and
[_______], as owner trustee (the "Owner Trustee"), as acknowledged and agreed
by [__________], as Certificate Registrar and Certificate Paying Agent. All
terms used herein and not otherwise defined shall have the meanings set forth
in the Trust Agreement. The Purchaser hereby certifies, represents and
warrants to, and covenants with, the Company, the Credit Enhancer and the
Certificate Registrar that:
1. The Purchaser understands that (a) the Certificates have
not been and will not be registered or qualified under the
Securities Act of 1933, as amended (the "Act") or any state
securities law, (b) the Company is not required to so register or
qualify the Certificates, (c) the Certificates may be resold only
if registered and qualified pursuant to the provisions of the Act
or any state securities law, or if an exemption from such
registration and qualification is available, (d) the Trust
Agreement contains restrictions regarding the transfer of the
Certificates and (e) the Certificates will bear a legend to the
foregoing effect.
2. The Purchaser is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters,
D-1
and, in particular, in such matters related to securities similar
to the Certificates, that it is capable of evaluating the merits
and risks of investment in the Certificates, (b) able to bear the
economic risks of such an investment and (c) an "accredited
investor" within the meaning of Rule 501(a) promulgated pursuant
to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review (a) a copy of the Trust Agreement and (b)
such other information concerning the Certificates, the Revolving
Credit Loans and the Company as has been requested by the
Purchaser from the Company or the Seller and is relevant to the
Purchaser's decision to purchase the Certificates. The Purchaser
has had any questions arising from such review answered by the
Company or the Seller to the satisfaction of the Purchaser.
5. The Purchaser has not and will not nor has it authorized
or will it authorize any person to (a) offer, pledge, sell,
dispose of or otherwise transfer any Certificate, any interest in
any Certificate or any other similar security to any person in any
manner, (b) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in
any manner, (c) otherwise approach or negotiate with respect to
any Certificate, any interest in any Certificate or any other
similar security with any person in any manner, (d) make any
general solicitation by means of general advertising or in any
other manner or (e) take any other action, that (as to any of (a)
through (e) above) would constitute a distribution of any
Certificate under the Act, that would render the disposition of
any Certificate a violation of Section 5 of the Act or any state
securities law, or that would require registration or
qualification pursuant thereto. The Purchaser will not sell or
otherwise transfer any of the Certificates, except in compliance
with the provisions of the Trust Agreement.
6. The Purchaser represents:
(i) that either (a) or (b) is satisfied, as marked below:
____ a. The Purchaser is not an employee benefit plan or
other benefit plan subject to the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986 (the "Code"), a Person acting, directly or
indirectly, on behalf of any such plan or Person acquiring such
Certificates with "plan assets" of a Plan within the meaning of the
Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101;
or
____ b. The Purchaser has provided the Depositor, the Owner
Trustee, the Certificate Registrar, the Credit Enhancer and the Servicer
with an opinion of counsel, satisfactory to the Depositor, the Owner
Trustee, the Certificate Registrar, the Credit Enhancer and the
Servicer, to the effect that the purchase and holding of a Certificate
by or on behalf of the Purchaser is permissible under applicable law,
will not constitute or result in a prohibited transaction under Section
406 of ERISA or Section
D-2
4975 of the Code (or comparable provisions of any subsequent enactments)
and will not subject the Depositor, the Owner Trustee, the Certificate
Registrar, the Credit Enhancer or the Servicer to any obligation or
liability (including liabilities under ERISA or Section 4975 of the
Code) in addition to those undertaken in the Trust Agreement, which
opinion of counsel shall not be an expense of the Depositor, the Owner
Trustee, the Certificate Registrar, the Credit Enhancer or the Servicer;
and
(ii) the Purchaser is familiar with the prohibited
transaction restrictions and fiduciary responsibility requirements
of Sections 406 and 407 of ERISA and Section 4975 of the Code and
understands that each of the parties to which this certification
is made is relying and will continue to rely on the statements
made in this paragraph 6.
7. The Purchaser is acquiring the Certificate for its own
behalf and is not acting as agent or custodian for any other
person or entity in connection with such acquisition;
8. The Purchaser is not a partnership, grantor trust or S
corporation for federal income tax purposes, or, if the Purchaser
is a partnership, grantor trust or S corporation for federal
income tax purposes, the Certificates are not more than [__]% of
the assets of the partnership, grantor trust or S corporation.
9. The Purchaser is not a non-United States person.
Very truly yours,
By:_____________________________
Name:
Title:
D-3
EXHIBIT E
FORM OF TRANSFEROR REPRESENTATION LETTER
_________________, 20____
Xxxxxx Xxxxxxx ABS Capital I Inc
[__________]
[__________]
[__________]
[__________]
[__________]
Attention: [__________]
Re: [_______]
Series [___], Class [__]
----------------------------------
Ladies and Gentlemen:
______________________ (the "Purchaser") intends to purchase from
__________________ (the "Seller") a ___% Certificate Percentage Interest of
Class [ ] Certificates of Series [___] (the "Certificates"), issued pursuant
to the Trust Agreement (the "Trust Agreement"), dated as of [___], 20[__]
between Xxxxxx Xxxxxxx ABS Capital I Inc. as depositor (the "Company") and
[_______], as owner trustee (the "Owner Trustee"), as acknowledged and agreed
by [__________], as Certificate Registrar and Certificate Paying Agent. All
terms used herein and not otherwise defined shall have the meanings set forth
in the Trust Agreement. The Seller hereby certifies, represents and warrants
to, and covenants with, the Company, the Credit Enhancer and the Certificate
Registrar that:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
has otherwise approached or negotiated with respect to any Certificate, any
interest in any Certificate or any other similar security with any person in
any manner, (d) has made any general solicitation by means of general
advertising or in any other manner, or (e) has taken any other action, that
(as to any of (a) through (e) above) would constitute a distribution of the
Certificates under the Securities Act of 1933 (the "Act"), that would render
the disposition of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or qualification
pursuant thereto. The Seller will not act, in any manner set forth in the
foregoing sentence with respect to any Certificate. The Seller has not and
will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Trust Agreement.
Very truly yours,
(Seller)
E-1
By:
Name:
Title:
E-2
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is delivered
pursuant to Section 3.05 of the Trust Agreement, dated as of [___], 20[__]
(the "Trust Agreement"), between Xxxxxx Xxxxxxx ABS Capital I Inc., as
depositor and [_______], as Owner Trustee, in connection with the acquisition
of, transfer to or possession by the undersigned, whether as beneficial owner
(the "Beneficial Owner"), or nominee on behalf of the Beneficial Owner of the
[_______], Series [___] (the "Certificate"). Capitalized terms used but not
defined in this certificate have the respective meanings given them in the
Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a nominee),
and in all cases sign and otherwise complete Part III.
In addition, each holder shall submit with the Certificate an IRS Form
W-9 relating to such holder.
To confirm to the Trust that the provisions of Sections 871, 881 or 1446
of the Internal Revenue Code (relating to withholding tax on foreign partners)
do not apply in respect of the Certificate held by the undersigned, the
undersigned hereby certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is ) not a
non-resident alien for purposes of U.S. income
taxation;
2. My (The Beneficial Owner's) name and
home address are:
____________________
____________________
; and
3. My (The Beneficial Owner's) U.S.
taxpayer identification number (Social Security
Number) is __________________________.
B. Corporate, Partnership or Other Entity as Beneficial Owner
1. ________________________ (Name of the
Beneficial Owner) is not a foreign corporation,
foreign partnership, foreign trust or foreign estate
(as those terms are defined in the Code and Treasury
Regulations;
F-1
2. The Beneficial Owner's office address
and place of incorporation (if applicable) is
______________________________________; and
3. The Beneficial Owner's U.S. employer
identification number is ____________________.
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this certificate has been made in reliance upon
information contained in:
______ an IRS Form W-9
______ a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the
undersigned agrees to notify the Trust at least [__] ([_]) days prior to the
date that the form relied upon becomes obsolete, and (ii) in connection with
change in Beneficial Owners, the undersigned agrees to submit a new
Certificate of Non-Foreign Status to the Trust promptly after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees to
notify the Trust within [__] ([_]) days of the date that the Beneficial Owner
becomes a foreign person. The undersigned understands that this certificate
may be disclosed to the Internal Revenue Service by the Trust and any false
statement contained therein could be punishable by fines, imprisonment or
both.
F-2
Under penalties of perjury, I declare that I have examined this
certificate and to the best of my knowledge and belief it is true, correct and
complete and will further declare that I will inform the Trust of any change
in the information provided above, and, if applicable, I further declare that
I have the authority* to sign this document.
___________________
Name
___________________
Title (if applicable)
___________________
Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of attorney
must accompany this certificate.
F-3
EXHIBIT G
FORM OF ERISA REPRESENTATION LETTER
_____________, 20__
Xxxxxx Xxxxxxx ABS Capital I Inc.
[__________]
[__________]
[_______]
[__________]
[__________]
[__________]
[__________]
[__________]
[__________]
[__________]
[__________]
[__________]
Attention: [__________]
Re: Xxxxxx Xxxxxxx ABS Capital I Inc.
[__________], Series [___], Class [__]
--------------------------------------
Dear Sirs:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") a ___% Certificate
Percentage Interest of Xxxxxx Xxxxxxx ABS Capital I Inc. [_______], Series
[___], Class [ ] (the "Certificates"), issued pursuant to a Trust Agreement
(the "Trust Agreement") dated as of [___], 20[__] among Xxxxxx Xxxxxxx ABS
Capital I Inc., as depositor (the "Depositor") and [_______], as trustee (the
"Owner Trustee"). Capitalized terms used herein and not otherwise defined
shall have the meanings assigned thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Owner Trustee, the Certificate Registrar,
the Credit Enhancer and the Servicer that:
The Certificates (i) are not being acquired by or on behalf
of, and will not be transferred to, any employee benefit plan
within the meaning of section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA") or other
retirement arrangement, including individual retirement accounts
and annuities, Xxxxx plans and bank collective investment funds
and insurance company general or separate accounts in which such
plans, accounts or
G-1
arrangements are invested, that is subject to Section 406 of ERISA
or Section 4975 of the Internal Revenue Code of 1986 (the "Code")
(any of the foregoing, a "Plan"), (ii) are not being acquired with
"plan assets" of a Plan within the meaning of the Department of
Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101, and (iii) will
not be transferred to any entity that is deemed to be investing in
plan assets within the meaning of the DOL regulation, 29 C.F.R.
ss. 2510.3-101.
The Transferee is familiar with the prohibited transaction restrictions
and fiduciary responsibility requirements of Sections 406 and 407 of ERISA and
Section 4975 of the Code and understands that each of the parties to which
this certification is made is relying and will continue to rely on the
statements made herein.
Very truly yours,
By:_______________________________________
Name:
Title:
G-2
EXHIBIT H
FORM OF REPRESENTATION LETTER
_____________, 200__
Xxxxxx Xxxxxxx ABS Capital I Inc.
[__________]
[__________]
[_______]
[__________]
[__________]
[__________]
[__________]
[__________]
[__________]
[__________]
[__________]
[__________]
Attention: [__________]
Re: [__________]
[__________], Series [___], Class [__]
--------------------------------------
Dear Sirs:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") a ___% Certificate
Percentage Interest of [_______], Series [___], Class [ ] (the
"Certificates"), issued pursuant to a Trust Agreement (the "Trust Agreement")
dated as of [___], 20[__] among Xxxxxx Xxxxxxx ABS Capital I Inc., as
depositor (the "Depositor") and [_______], as trustee (the "Owner Trustee").
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Owner Trustee, the Certificate Registrar,
the Credit Enhancer and the Servicer that:
(1) the Transferee is acquiring the Certificate for its own
behalf and is not acting as agent or custodian for any other
person or entity in connection with such acquisition; and
H-1
(2) the Transferee is not a partnership, grantor trust or S
corporation for federal income tax purposes, or, if the Transferee
is a partnership, grantor trust or S corporation for federal
income tax purposes, the Certificates are not more than [__]% of
the assets of the partnership, grantor trust or S corporation.
Very truly yours,
By:_______________________________________
Name:
Title:
H-2
