Exhibit 4.3
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TRUST AGREEMENT
among
[ ]
as Seller,
Bond Securitization, L.L.C.
as Depositor,
and
[ ],
as Owner Trustee
Dated as of [ ]
[ ] HOME EQUITY LOAN TRUST 200_-_ Home Equity Loan
Asset-Backed Notes, Series 200_-_
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Table of Contents
Page
ARTICLE I
DEFINITIONS
Section 1.1 Capitalized Terms..................................................................1
Section 1.2 Other Definitional Provisions......................................................4
ARTICLE II
ORGANIZATION
Section 2.1 Name...............................................................................5
Section 2.2 Office.............................................................................5
Section 2.3 Purposes and Powers................................................................5
Section 2.4 Appointment of Owner Trustee.......................................................6
Section 2.5 Initial Capital Contribution of Owner Trust Estate.................................6
Section 2.6 Declaration of Trust...............................................................6
Section 2.7 Title to Trust Property............................................................6
Section 2.8 Situs of Trust.....................................................................6
Section 2.9 Representations and Warranties of the Depositor....................................7
Section 2.10 Federal Income Tax Allocations.....................................................8
ARTICLE III
OWNERSHIP INTEREST AND TRANSFERS OF THE OWNERSHIP INTEREST
Section 3.1 Initial Ownership..................................................................9
Section 3.2 The Ownership Interest.............................................................9
Section 3.3 [Reserved].........................................................................9
Section 3.4 Registration of Transfer and Exchange of Ownership Interest........................9
Section 3.5 [Reserved].........................................................................9
Section 3.6 Persons Deemed Transferors.........................................................9
Section 3.7 [Reserved].........................................................................9
Section 3.8 Maintenance of Office or Agency....................................................9
Section 3.9 Appointment of Paying Agent.......................................................10
Section 3.10 [Reserved]........................................................................10
Section 3.11 [Reserved]........................................................................10
Section 3.12 [Reserved]........................................................................10
Section 3.13 Restrictions on Transfers of Ownership Interest...................................10
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.1 Prior Notice to the Transferor and the Insurer with Respect to Certain
Matters...........................................................................13
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Section 4.2 [Reserved]........................................................................15
Section 4.3 Action by Transferor with Respect to Bankruptcy...................................15
Section 4.4 Restrictions on Transferor's Power................................................15
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.1 Establishment of Trust Account....................................................16
Section 5.2 Application Of Trust Funds........................................................16
Section 5.3 Method of Payment.................................................................16
Section 5.4 [Reserved]........................................................................16
Section 5.5 Accounting and Reports to the Transferor, the Internal Revenue Service
and Others........................................................................16
Section 5.6 Signature on Returns..............................................................17
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.1 General Authority.................................................................18
Section 6.2 General Duties....................................................................18
Section 6.3 Action upon Instruction...........................................................18
Section 6.4 No Duties Except as Specified in this Agreement, the Transaction
Documents or in Instructions......................................................19
Section 6.5 No Action Except Under Specified Documents or Instructions........................20
Section 6.6 Restrictions......................................................................20
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.1 Acceptance of Trusts and Duties...................................................21
Section 7.2 Furnishing of Documents...........................................................22
Section 7.3 Representations and Warranties....................................................22
Section 7.4 Reliance; Advice of Counsel.......................................................23
Section 7.5 Not Acting in Individual Capacity.................................................23
Section 7.6 Owner Trustee Not Liable for the Ownership Interest or the Mortgage Loans.........24
Section 7.7 Owner Trustee May Own the Ownership Interest and the Notes........................24
Section 7.8 Licenses..........................................................................24
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.1 Owner Trustee's Fees and Expenses.................................................25
Section 8.2 Indemnification...................................................................25
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Section 8.3 Payments to the Owner Trustee.....................................................25
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section 9.1 Termination of Trust Agreement....................................................26
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.1 Eligibility Requirements for Owner Trustee........................................28
Section 10.2 Resignation or Removal of Owner Trustee...........................................28
Section 10.3 Successor Owner Trustee...........................................................29
Section 10.4 Merger or Consolidation of Owner Trustee..........................................29
Section 10.5 Appointment of Co-Owner Trustee or Separate Owner Trustee.........................29
ARTICLE XI
MISCELLANEOUS
Section 11.1 Supplements and Amendments........................................................32
Section 11.2 No Legal Title to Owner Trust Estate in Transferor................................33
Section 11.3 Limitations on Rights of Others...................................................33
Section 11.4 Notices...........................................................................33
Section 11.5 Severability......................................................................33
Section 11.6 Separate Counterparts.............................................................34
Section 11.7 Successors and Assigns............................................................34
Section 11.8 No Petition.......................................................................34
Section 11.9 [Reserved]........................................................................34
Section 11.10 No Recourse.......................................................................34
Section 11.11 Headings..........................................................................34
Section 11.12 GOVERNING LAW.....................................................................34
Section 11.13 Inconsistencies with Sale and Servicing Agreement.................................35
Section 11.14 Third Party Beneficiary...........................................................35
EXHIBIT A Certificate of Trust............................................................A-1
EXHIBIT B Form of Transfer Certificate....................................................B-1
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TRUST AGREEMENT, dated as of [ ], among [ ],
Bond Securitization, L.L.C., as depositor (the "Depositor") and [the Owner
Trustee], a Delaware banking corporation, as owner trustee (the "Owner
Trustee").
ARTICLE I
DEFINITIONS
Section 1.1 Capitalized Terms. For all purposes of this Agreement,
the following terms shall have the meanings set forth below:
"Agreement" shall mean this Trust Agreement, as the same may be
amended and supplemented from time to time.
"Bankruptcy Action" shall have the meaning assigned to such term in
Section 4.1.
"Benefit Plan" shall have the meaning assigned to such term in
Section 3.13.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as the same may be amended from
time to time.
"Certificate" shall mean the Ownership Interest.
"Certificate of Trust" shall mean the Certificate of Trust in the
form of Exhibit A to be filed for the Trust pursuant to Section 3810(a) of the
Business Trust Statute.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall mean, (i) with respect to the Owner
Trustee, the principal corporate trust office of the Owner Trustee, which
office at date of execution of this Agreement, is located at [ ],
Attention: Corporate Trust Administration; or at such other address in the
State of Delaware as the Owner Trustee may designate by notice to the
Transferor and the Trust, or the principal corporate trust office of any
successor Owner Trustee (the address (which shall be in the State of Delaware)
of which the successor owner trustee will notify the Transferor and the
Trust); or (ii) with respect to the Indenture Trustee, the principal corporate
trust office of the Indenture Trustee, which office at date of execution of
this Agreement, is located at [ ], Attention: Indenture Trust
Administration, or at such other address as the Indenture Trustee may
designate by notice to the Transferor and the Trust, or the principal
corporate trust office of any successor Indenture Trustee (the address (which
shall be in the State of [ ]) of which the successor indenture trustee
will notify the Transferor and the Trust.
"Depositor" shall mean Bond Securitization, L.L.C. or its successors.
"Distribution Account" shall have the meaning assigned to such term
in the Sale and Servicing Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Expenses" shall have the meaning assigned to such term in Section
8.2.
"Indenture" shall mean the Indenture, dated as of [ ],
by and between the Trust and the Indenture Trustee.
"Indenture Trustee" shall mean [ ], as Indenture Trustee under
the Indenture.
"Initial Note Principal Balance" shall mean with respect to the Class
A Notes, $[ ].
"Insurance Agreement" shall mean the Insurance and Reimbursement
Agreement dated as of [ ] among the Indenture Trustee, the Depositor, the
Seller, the Servicer and the Insurer, including any amendments and supplements
thereto.
"Non-permitted Foreign Owner" shall have the meaning set forth in
Exhibit B hereto.
"Non-U.S. Person" shall mean any Person other than (i) a citizen or
resident of the United States, (ii) an entity treated for United States
federal income tax purposes as a corporation or partnership created or
organized in or under the laws of the United States or any state thereof,
including the District of Columbia, (iii) an estate that is subject to U.S.
federal income tax regardless of the source of its income, (iv) a trust if a
court within the United States is able to exercise primary supervision over
the administration of the trust and one or more United States trustees have
authority to control all substantial decisions of the trust, or (v) certain
trusts in existence on August 20, 1996 and treated as United States persons on
such date that elect to continue to be so treated.
"Owner Trust Estate" shall mean the contribution of $1 referred to
in Section 2.5 and the Trust Estate.
"Owner Trustee" shall mean [ ], a Delaware banking corporation,
not in its individual capacity but solely as owner trustee under this
Agreement, and any successor owner trustee hereunder.
"Ownership Interest" shall have the meaning specified in Section 3.2.
"Prospective Transferor" shall mean any prospective purchaser or
prospective transferee of the Ownership Interest.
"Rating Agency Condition" shall mean, with respect to certain actions
requiring Rating Agency consent, that each Rating Agency shall have been given
10 days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each of the Rating Agencies shall have notified the
Depositor, the Seller, the Owner Trustee, the Insurer and the Trust in writing
that such action will not result in a reduction or withdrawal of the then
current rating of the Notes, without regard to the Insurance Policy.
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"Record Date" shall mean the last Business Day preceding the related
Payment Date; provided, however, that following the date on which Definitive
Notes are available pursuant to Section 2.2 of the Indenture, the Record Date
shall be the last day of the calendar month preceding the month in which the
related Payment Date occurs.
"Register" shall mean a register kept by the Registrar in which,
subject to such reasonable regulations as it may prescribe, the Registrar
shall provide for the registration of the Certificate and the registration of
transfers of the Certificate. The location of the Registrar shall be the same
as that of the Corporate Trust Office of the Indenture Trustee.
"Registrar" shall mean the [indenture trustee] as Registrar
hereunder.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement dated as of the date hereof, among the Trust, the Depositor, the
Seller, the Indenture Trustee and the Servicer.
"Secretary of State" shall mean the Secretary of State of the State
of Delaware.
"Seller" shall mean [ ] or its successors.
"Servicer" shall mean [ ], or any successor
servicer appointed pursuant to the Sale and Servicing Agreement.
"Transaction Documents" shall mean each of the Indenture, the Sale
and Servicing Agreement, the Insurance Agreement and this Agreement.
"Transferor" shall mean the owner of the Ownership Interest.
"Transferor Interest" shall have the meaning specified in Section
3.2.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean [ ] Home Equity Loan Trust 200_-_, the Delaware
business trust created pursuant to this Agreement.
"Trust Estate" shall mean the assets subject to the Sale and
Servicing Agreement, the Mortgage Loan Purchase Agreement, this Trust
Agreement and the Indenture, assigned to the Indenture Trustee, which assets
consist of: (i) each Mortgage Loan and the related Mortgage File, including
its Principal Balance and all collections in respect thereof received after
the Cut-Off Date; (ii) property that secured a Mortgage Loan that is acquired
by foreclosure or deed in lieu of foreclosure; (iii) the Seller's rights under
any insurance policies relating to the Mortgage Loans (including any Insurance
Proceeds); (iv) amounts on deposit in the Collection Account
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and Distribution Account; (v) the Depositor's rights under the Purchase
Agreement and (vi) any proceeds of any of the foregoing and (vii) all other
assets included or to be included in the Trust for the benefit of Noteholders
and the Insurer. In addition, on or prior to the Closing Date, the Seller
shall cause the Insurer to deliver the Insurance Policy to the Indenture
Trustee for the benefit of the Noteholders.
"Underwriter" shall mean [ ].
Section 1.2 Other Definitional Provisions.
(a) Capitalized terms used herein and not otherwise defined
herein have the meanings assigned to them in the Sale and Servicing Agreement
or, if not defined therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate
or other document to the extent not defined, shall have the respective
meanings given to them under generally accepted accounting principles. To the
extent that the definitions of accounting terms in this Agreement or in any
such certificate or other document are inconsistent with the meanings of such
terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
(d) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and
Exhibit references contained in this Agreement are references to Sections and
Exhibits in or to this Agreement unless otherwise specified; and the term
"including" shall mean "including without limitation."
(e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to
herein or in any instrument or certificate delivered in connection herewith
means such agreement, instrument or statute as from time to time amended,
modified or supplemented and includes (in the case of agreements or
instruments) references to all attachments thereto and instruments
incorporated therein; references to a Person are also to its permitted
successors and assigns.
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ARTICLE II
ORGANIZATION
Section 2.1 Name. The Trust created hereby shall be known as "[ ]
Home Equity Loan Trust 200_-_," in which name the Owner Trustee may conduct
the business of the Trust and make and execute contracts and other instruments
on behalf of the Trust and the Trust may xxx and be sued.
Section 2.2 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 the
State of Delaware as the Owner Trustee may designate by written notice to the
Transferor.
Section 2.3 Purposes and Powers.
(a) The purpose of the Trust is to engage in the following
activities:
(i) to issue the Notes pursuant to the Indenture and the Ownership
Interest pursuant to this Agreement and to sell such Notes and Ownership
Interest;
(ii) with the proceeds of the sale of the Notes and the Ownership
Interest, to fund start-up and transactional expenses of the Trust and to
pay the balance to the Depositor, or at the direction of the Depositor,
to pay the Seller, as its interests may appear pursuant to the Sale and
Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the Transferor pursuant to the terms of the Sale and Servicing
Agreement any portion of the Trust Estate released from the lien of, and
remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Transaction
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 Transaction Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions to
the Noteholders and the Transferor.
The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the Transaction Documents.
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Section 2.4 Appointment of Owner Trustee. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
Section 2.5 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 $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of
the foregoing contribution, which shall constitute the initial Owner Trust
Estate and shall be deposited in the Distribution Account. The Depositor shall
pay organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
Section 2.6 Declaration of Trust. The Owner Trustee hereby declares
that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Transferor, subject
to the obligations of the Trust under the Transaction Documents. It is the
intention of the parties hereto that the Trust constitute a business trust
under the Business Trust Statute and that this Agreement constitute the
governing instrument of such business trust. It is the intention of the
parties hereto that, solely for income 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 Transferor being the owner of the Ownership Interest.
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 Business Trust
Statute with respect to accomplishing the purposes of the Trust. The Owner
Trustee has filed the Certificate of Trust with the Secretary of State of the
State of Delaware.
Section 2.7 Title to Trust Property.
(a) Subject to the Indenture, legal title to all the Owner Trust
Estate shall be vested at all times in the Trust as a separate legal entity
except where applicable law in any jurisdiction requires title to any part of
the Owner Trust Estate to be vested in a trustee or trustees, in which case
title shall be deemed to be vested in the Owner Trustee, a co-owner trustee
and/or a separate trustee, as the case may be.
(b) The Transferor 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 Transferor 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 2.8 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 [ ]. The Trust shall not have any employees; provided,
however, that nothing herein shall restrict or prohibit the Owner Trustee
6
from having employees within or without the State of Delaware. Payments will be
received by the Trust only in Delaware or [ ], and payments will be made by
the Trust only from Delaware or [ ]. The only office of the Trust will be at
the Corporate Trust Office in Delaware.
Section 2.9 Representations and Warranties of the Depositor.
The Depositor hereby represents and warrants to the Owner Trustee and
the Insurer that:
(a) The Depositor is a limited liability company organized under
the laws of the state of Delaware. The Depositor has the power and authority
to execute and deliver this Agreement and to perform in accordance herewith;
the execution, delivery and performance of this Agreement (including all
instruments of transfer to be delivered pursuant to this Agreement) by the
Depositor and the consummation of the transactions contemplated hereby have
been duly and validly authorized by all necessary action of the Depositor;
this Agreement evidences the valid, binding and enforceable obligation of the
Depositor; and all requisite action has been taken by the Depositor to make
this Agreement valid, binding and enforceable upon the Depositor in accordance
with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally or the application of equitable principles in any
proceeding, whether at law or in equity.
(b) The consummation of the transactions contemplated by this
Agreement will not result in (i) the breach of any terms or provisions of the
Certificate of Formation or Limited Liability Company Agreement of the
Depositor, (ii) the breach of any term or provision of, or conflict with or
constitute a default under or result in the acceleration of any obligation
under, any material agreement, indenture or loan or credit agreement or other
material instrument to which the Depositor, or its property is subject, or
(iii) the violation of any law, rule, regulation, order, judgment or decree to
which the Depositor or its respective property is subject.
(c) The Depositor 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 other governmental agency, which default might have consequences
that would materially and adversely affect the condition (financial or
otherwise) or operations of the Depositor or its properties or might have
consequences that would materially and adversely affect its performance
hereunder.
(d) To the Depositor's best knowledge, there are no proceedings
or investigations pending or threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties: (A) asserting the
invalidity of this Agreement, (B) seeking to prevent the consummation of any
of the transactions contemplated by this Agreement or (C) seeking any
determination or ruling that might materially and adversely affect the
performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement.
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Section 2.10 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 Transferor.
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ARTICLE III
OWNERSHIP INTEREST AND TRANSFERS OF THE OWNERSHIP INTEREST
Section 3.1 Initial Ownership. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.5, the Transferor shall be
the sole owner of the Trust.
Section 3.2 The Ownership Interest. The Ownership Interest (as
defined below) shall be uncertificated and shall represent the entire
beneficial ownership interest in the assets of the Trust Estate, subject to
the debt represented by the Notes (the "Ownership Interest" or "Transferor
Interest"). The Ownership Interest may be assigned by the Transferor as
provided in Section 3.13.
A transferee of the Ownership Interest shall become the Transferor,
and shall be entitled to the rights and subject to the obligations of the
Transferor hereunder, upon such transferee's acceptance of the Ownership
Interest duly registered in such transferee's name pursuant to Section 3.4
below.
Section 3.3 [Reserved].
Section 3.4 Registration of Transfer and Exchange of Ownership
Interest. The Owner Trustee hereby appoints [ ] as Registrar under this
Agreement. The Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.8, a Register in which, subject to
such reasonable regulations as it may prescribe, the Register shall provide
for the registration of the Ownership Interest and of transfer and exchange of
the Ownership Interest as herein provided. The Registrar, subject to Section
3.13 hereof, on behalf of the Trust shall note on the Register the transfer of
the Ownership Interest.
Section 3.5 [Reserved].
Section 3.6 Persons Deemed Transferors. Prior to due assignment of
the Ownership Interest for registration of transfer, the Depositor, the
Seller, the Owner Trustee, the Indenture Trustee, the Insurer and the
Registrar may treat the Person in whose name the Ownership Interest shall be
registered in the Register as the owner thereof for the purpose of receiving
distributions pursuant to Section 5.2 hereof and for all other purposes
whatsoever, and none of the Depositor, the Seller, the Owner Trustee, the
Indenture Trustee, the Insurer or the Registrar shall be bound by any notice
to the contrary.
Section 3.7 [Reserved]
Section 3.8 Maintenance of Office or Agency. The Indenture Trustee
shall maintain an office or offices or agency or agencies (initially, the
Corporate Trust Office of the Indenture Trustee) where instructions for the
transfer of the Ownership Interest may be delivered for registration of
transfer [or exchange] pursuant to Section 3.4 and where notices and demands
to or upon the Registrar in respect of the Ownership Interest and the
Transaction Documents may
9
be served. The Indenture Trustee shall give prompt written notice to the
Seller, the Insurer, the Owner Trustee and the Transferor of any change in the
location of the Register or any such office or agency.
Section 3.9 Appointment of Paying Agent. The Owner Trustee hereby
appoints the Indenture Trustee as Paying Agent under this Agreement. The
Paying Agent shall make distributions to the Transferor from the Distribution
Account pursuant to Section 5.2 hereof and Section 5.01 of the Sale and
Servicing Agreement and shall report the amounts of such distributions to the
Owner Trustee. The Paying Agent shall have the revocable power to withdraw
funds from the Distribution Account for the purpose of making the
distributions referred to above. In the event that the Indenture Trustee shall
no longer be the Paying Agent hereunder, the Owner Trustee shall appoint a
successor to act as Paying Agent (which shall at all times be a corporation
duly incorporated and validly existing under the laws of the United States of
America or any state thereof, authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by federal or state
authorities). The Owner Trustee shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Owner Trustee to execute and deliver
to the Owner Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Owner Trustee that as Paying
Agent, such successor Paying Agent or additional Paying Agent will hold all
sums, if any, held by it for payment to the Transferor in trust for the
benefit of the Transferor until such sums shall be paid to the Transferor. The
Paying Agent shall return all unclaimed funds to the Owner Trustee, and upon
removal of a Paying Agent, such Paying Agent shall also return all funds in
its possession to the Owner Trustee. Any reference in this Agreement to the
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
Section 3.10 [Reserved].
Section 3.11 [Reserved].
Section 3.12 [Reserved].
Section 3.13 Restrictions on Transfers of Ownership Interest. The
Ownership Interest shall not be sold, pledged, transferred or assigned, except
as provided below.
(a) The Ownership Interest may not be acquired by or for the
account of (i) an employee benefit plan (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")) that is
subject to the provisions of Title I of ERISA, (ii) a plan described in
Section 4975(e)(1) of the Code, or (iii) any entity, including an insurance
company separate account or general account, whose underlying assets include
plan assets by reason of a plan's investment in the entity (each, a "Benefit
Plan"). Each Prospective owner of the Ownership Interest, other than the
Seller or an affiliate of the Seller, shall represent and warrant, in writing,
to the Owner Trustee and the Registrar and any of their respective successors
that:
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(i) Such Person is (A) a "qualified institutional buyer" as defined
in Rule 144A under the Securities Act of 1933, as amended (the
"Securities Act"), and is aware that the seller of such Ownership
Interest may be relying on the exemption from the registration
requirements of the Securities Act provided by Rule 144A and is acquiring
such Ownership Interest for its own account or for the account of one or
more qualified institutional buyers for whom it is authorized to act, (B)
an "accredited investor" as defined in Rule 501(a) under the Securities
Act , or (C) a Person involved in the organization or operation of the
Trust or an affiliate of such Person within the meaning of Rule 3a-7 of
the 1940 Act, as amended (including, but not limited to, the Seller or
the Transferor).
(ii) Such Person understands that such Ownership Interest has not
been and will not be registered under the Securities Act and may be
offered, sold, pledged or otherwise transferred only to a person whom the
seller reasonably believes is (A) a "qualified institutional buyer," (B)
"an accredited investor" or (C) a Person involved in the organization or
operation of the Trust or an affiliate of such Person, in each case in a
transaction meeting the requirements of Rule 144A under the Securities
Act or that is otherwise exempt from registration under the Securities
Act and in accordance with any applicable securities laws of any state of
the United States.
(iii) Such Person shall comply with the provisions of Section
3.13(b), as applicable, relating to the ERISA restrictions with respect
to the acceptance or acquisition of such Ownership Interest .
(b) Each Prospective Transferor, other than the Transferor or an
affiliate of the Transferor, shall either:
(i) represent and warrant, in writing, to the Owner Trustee and the
Registrar and any of their respective successors, in accordance with
Exhibit B hereto, that the Prospective Transferor is not (A) an "employee
benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or (B) a
"plan" within the meaning of Section 4975(e)(1) of the Code (any such
plan or employee benefit plan, a "Plan") or (C) any entity, including an
insurance company separate account or general account, whose underlying
assets include plan assets by reason of a plan's investment in the entity
and is not directly or indirectly purchasing such Ownership Interest on
behalf of, as investment manager of, as named fiduciary of, as trustee
of, or with assets of a Plan; or
(ii) furnish to the Owner Trustee and the Registrar and any of their
respective successors an opinion of counsel acceptable to such persons
that (A) the proposed issuance or transfer of such Ownership Interest to
such Prospective Transferor will not cause any assets of the Trust to be
deemed assets of a Plan, and (B) the proposed holding or transfer of such
Ownership Interest will not cause the Owner Trustee or the Registrar or
any of their respective successors to be a fiduciary of a Plan within the
meaning of
11
Section 3(21) of ERISA and will not give rise to a transaction described
in Section 406 of ERISA or Section 4975(c)(1) of the Code for which a
statutory or administrative exemption is unavailable.
(c) [Reserved].
(d) The Prospective Transferor, other than the Transferor or an
affiliate of the Transferor, shall obtain an Opinion of Counsel to the effect
that, as a matter of federal income tax law, such Prospective Transferor is
permitted to accept the transfer of the Ownership Interest.
(e) The Ownership Interest may not be pledged or transferred
without delivery to the Registrar of an Opinion of Counsel to the effect that
such transfer would not jeopardize the tax treatment of the Trust, would not
subject the Trust to an entity-level tax, and would not jeopardize the status
of the Notes as debt for all purposes.
(f) No pledge or transfer of the Ownership Interest shall be
effective unless such purchase or transfer is (i) to a single beneficial owner
and (ii) accompanied by an opinion of counsel satisfactory to the Owner
Trustee, which Opinion of Counsel shall not be an expense of the Trust, the
Registrar, the Servicer or the Seller, to the effect such pledge or transfer
will not cause the Trust to be treated for federal income tax purposes as a
taxable mortgage pool, association or a publicly traded partnership taxable as
a corporation.
(g) Transfer of the Ownership Interest shall be made only if
accompanied by an opinion of counsel satisfactory to the Owner Trustee, which
opinion of counsel shall not be an expense of the Trust, the Owner Trustee,
the Servicer or the Seller, to the effect such transfer will not cause the
Trust to be treated for federal income tax purposes as an association, a
taxable mortgage pool or a publicly traded partnership taxable as a
corporation.
12
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
Section 4.1 Prior Notice to the Transferor and the Insurer with
Respect to Certain Matters. With respect to the following matters, the Owner
Trustee shall not take action, and neither the Transferor nor the Insurer
shall direct the Owner Trustee to take any action, unless (i) the Insurer has
provided its written consent and (ii) at least 30 days before the taking of
such action, the Owner Trustee shall have notified the Transferor in writing
of the proposed action and neither the Transferor nor the Insurer shall have
notified the Owner Trustee in writing prior to the 30th day after such notice
is given that the Transferor has withheld consent or the Transferor or the
Insurer have 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 the Mortgage
Loans) and the compromise of any action, claim or lawsuit brought by or
against the Trust (except with respect to the aforementioned claims or
lawsuits for collection of the Mortgage Loans);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Business Trust Statute);
(c) the amendment or other change to this Agreement or any
Transaction Document in circumstances where the consent of any Noteholder or
the Insurer is required;
(d) the amendment or other change to this Agreement or any
Transaction Document in circumstances where the consent of any Noteholder or
the Insurer is not required and such amendment materially adversely affects
the interest of the Transferor;
(e) the appointment pursuant to the Indenture of a successor
Note Registrar, Paying Agent or Indenture Trustee, or the consent to the
assignment by the Note Registrar, Paying Agent or Indenture Trustee of its
obligations under the Indenture;
(f) the consent to the calling or waiver of any default of any
Transaction Document;
(g) the consent to the assignment by the Indenture Trustee or
the Seller of their respective obligations under any Transaction Document;
(h) except as provided in Article IX hereof, dissolve, terminate
or liquidate the Trust in whole or in part;
(i) merge or consolidate the Trust with or into any other
entity, or, except as contemplated by the Sale and Servicing Agreement, convey
or transfer all or substantially all of the Trust's assets to any other
entity;
13
(j) cause the Trust to incur, assume or guaranty any
indebtedness other than the Notes, as set forth in this Agreement;
(k) do any act that conflicts with any other Transaction
Document;
(l) do any act which would make it impossible to carry on the
ordinary business of the Trust;
(m) confess a judgment against the Trust;
(n) possess Trust assets, or assign the Trust's right to
property, for other than a Trust purpose; or
(o) change the Trust's purpose and powers from those set forth
in this Agreement.
In addition, except as specifically contemplated by the Transaction
Documents, the Trust shall not commingle its assets with those of any other
entity. The Trust shall maintain its financial and accounting books and
records separate from those of any other entity. Except as expressly set forth
herein, the Trust shall pay its indebtedness, operating expenses from its own
funds, and the Trust shall not pay the indebtedness, operating expenses and
liabilities of any other Person. The Trust shall maintain appropriate minutes
or other records of all appropriate actions and shall maintain its office
separate from the offices of the Depositor or the Seller, and any of their
respective affiliates. This Agreement and the Transaction Documents shall be
the only agreements among the parties hereto with respect to the creation,
operation and termination of the Trust. For accounting purposes, the Trust
shall be treated as an entity separate and distinct from the Transferor. The
pricing and other material terms of all transactions and agreements to which
the Trust is a party shall be intrinsically fair to all parties thereto.
The Owner Trustee shall not have the power, except upon the direction
of the Transferor and with the consent of the Insurer (which consent shall not
be unreasonably withheld), and to the extent otherwise consistent with the
Transaction Documents, to (i) remove or replace the Seller or the Indenture
Trustee, (ii) institute proceedings to have the Trust declared or adjudicated
a bankrupt or insolvent, (iii) consent to the institution of bankruptcy or
insolvency proceedings against the Trust, (iv) file a petition or consent to a
petition seeking reorganization or relief on behalf of the Trust under any
applicable federal or state law relating to bankruptcy, (v) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or any
similar official) of the Trust or a substantial portion of the property of the
Trust, (vi) make any assignment for the benefit of the Trust's creditors,
(vii) cause the Trust to admit in writing its inability to pay its debts
generally as they become due, or (viii) take any action, or cause the Trust to
take any action, in furtherance of any of the foregoing (any of the above, a
"Bankruptcy Action"). So long as the Indenture remains in effect, the
Transferor shall not 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.
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Section 4.2 [Reserved].
Section 4.3 Action by Transferor with Respect to Bankruptcy. The
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the prior consent and approval of (i)
the Insurer; (ii) the Transferor; (iii) the Owner Trustee; and (iv) the
Indenture Trustee, and the delivery to the Owner Trustee by the Transferor of
a certificate certifying that such Transferor reasonably believes that the
Trust is insolvent. The terms of this Section 4.3 shall survive for one year
and one day following the termination of this Agreement.
Section 4.4 Restrictions on Transferor's Power. The Transferor shall
not direct the Owner Trustee to take or refrain from taking any action if such
action or inaction would be contrary to any obligation of the Trust or the
Owner Trustee under this Agreement or any of the Transaction Documents or
would be contrary to Section 2.3 hereof, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
15
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.1 Establishment of Trust Account. The Owner Trustee shall
cause the Indenture Trustee to establish and maintain with the Indenture
Trustee for the benefit of the Owner Trustee one or more Eligible Accounts in
accordance with the Indenture.
Section 5.2 Application Of Trust Funds.
(a) On each Payment Date, the Paying Agent shall make the
distributions and payments set forth in Section 5.01 of the Sale and Servicing
Agreement from amounts on deposit in the Distribution Account.
(b) On or before the third Business Day following each Payment
Date, the Paying Agent shall send to DTC the statement provided to the Paying
Agent by the Indenture Trustee pursuant to Section 5.03 of the Sale and
Servicing Agreement with respect to such Payment Date.
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to the Transferor, such tax shall
reduce the amount otherwise distributable to the Transferor in accordance with
this Section 5.2. The Paying Agent is hereby authorized and directed to retain
from amounts otherwise distributable to the Transferor sufficient funds for
the payment of any tax that is legally owed by the Trust (but such
authorization shall not prevent the Paying Agent 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 the Transferor shall be treated as
cash distributed to the Transferor at the time it is withheld by the Trust 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. Transferor), the Paying Agent may in its sole
discretion withhold such amounts in accordance with this paragraph (c). In the
event that the Transferor wishes to apply for a refund of any such withholding
tax, the Owner Trustee and the Paying Agent shall reasonably cooperate with
the Transferor in making such claim so long as the Transferor agrees to
reimburse the Owner Trustee and the Paying Agent for any out-of-pocket
expenses incurred.
Section 5.3 Method of Payment. Distributions required to be made to
the Transferor on any Payment Date shall be made to the Transferor of record
on the preceding Record Date in the manner set forth in Section 5.01 of the
Sale and Servicing Agreement.
Section 5.4 [Reserved].
Section 5.5 Accounting and Reports to the Transferor, the Internal
Revenue Service and Others. The Owner Trustee shall deliver to the Transferor
such information, reports or statements as may be required by the Code and
applicable Treasury Regulations and as may be
16
required to enable the Transferor to prepare its respective federal and state
income tax returns. Consistent with the Trust's characterization for tax
purposes as a security arrangement for the issuance of non-recourse debt, no
federal income tax return shall be filed on behalf of the Trust unless either
(a) the Trust or the Transferor shall receive an Opinion of Counsel based on a
change in applicable law occurring after the date hereof that the Code
requires such a filing or (b) the Internal Revenue Service shall determine
that the Trust is required to file such a return. In the event that the Trust
is required to file tax returns, the Owner Trustee shall elect under Section
1278 of the Code to include in income currently any market discount that
accrues with respect to the Mortgage Loans. The Owner Trustee shall prepare or
shall cause to be prepared any tax returns required to be filed by the Trust
and shall remit such returns to the Transferor at least five days before such
returns are due to be filed. The Transferor, or any other such party required
by law, shall promptly sign such returns and deliver such returns after
signature to the Owner Trustee and such returns shall be filed by, or at the
direction of, the Owner Trustee with the appropriate tax authorities. In no
event shall the Transferor be liable for any liabilities, costs or expenses of
the Trust arising out of the application of any tax law, including federal,
state, foreign or local income or excise taxes or any other tax imposed on or
measured by income (or any interest, penalty or addition with respect thereto
or arising from a failure to comply therewith), except for any such liability,
cost or expense attributable to the Transferor's breach of its obligations
under this Agreement.
Section 5.6 Signature on Returns.
The Owner Trustee shall sign on behalf of the Trust the tax returns
of the Trust, if any, unless applicable law requires a Transferor to sign such
documents, in which case such documents shall be signed by the Transferor.
17
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.1 General Authority. The Owner Trustee is authorized and
directed to execute and deliver or cause to be executed and delivered the
Notes, and the Transaction 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 Transaction Documents to which the Trust is to be a party and any
amendment or other agreement or instrument described in Article III, in each
case, in such form as the Owner Trustee shall approve, as evidenced
conclusively by the Owner Trustee's execution thereof, and, on behalf of the
Trust, to direct the Indenture Trustee to authenticate and deliver the Class A
Notes in an aggregate principal amount equal to $[ ]. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, to
take all actions required of the Trust pursuant to the Transaction Documents.
Section 6.2 General Duties. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant
to the terms of this Agreement and the Transaction Documents to which the
Trust is a party and to administer the Trust in the interest of the
Transferor, subject to the Transaction Documents and in accordance with the
provisions of this Agreement. Notwithstanding the foregoing, the Owner Trustee
shall be deemed to have discharged its duties and responsibilities hereunder
and under the Transaction Documents to the extent the Administrator has agreed
in the Administration Agreement to perform any act or to discharge any duty of
the Owner Trustee hereunder or under any Transaction Document, and the Owner
Trustee shall not be held liable for the default or failure of the
Administrator to carry out their respective obligations under the
Administration Agreement.
Section 6.3 Action upon Instruction.
(a) Subject to Article IV herein and in accordance with the
terms of the Transaction Documents, the Transferor may by written instruction
direct the Owner Trustee in the management of the Trust but only to the extent
consistent with the limited purpose of the Trust. Such direction may be
exercised at any time by written instruction of the Transferor pursuant to
Article IV.
(b) Notwithstanding the foregoing, the Owner Trustee shall not
be required to take any action hereunder or under any Transaction Document if
the Owner Trustee shall have reasonably determined, or shall have been advised
by counsel, that such action is likely to result in liability on the part of
the Owner Trustee or is contrary to the terms hereof or of any Transaction
Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or under any Transaction Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Transferor and the Insurer (so long as no Insurer Default exists)
requesting instruction from the Transferor and the Insurer (so long as no
Insurer Default exists)
18
as to the course of action to be adopted, and to the extent the Owner Trustee
acts in good faith in accordance with any written instruction of the
Transferor or the Insurer received, the Owner Trustee shall not be liable on
account of such action to any Person. If the Owner Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or
the Transaction Documents, as it shall deem to be in the best interest of the
Transferor, and shall have no liability to any Person for such action or
inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Transaction Document or
any such provision is ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision, or in the event that this
Agreement provides no direction to the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Transferor and the Insurer requesting instruction and, to the extent that the
Owner Trustee acts or refrains from acting in good faith in accordance with
any such instruction received from the Insurer, or if there is an Insurer
Default, the Transferor, the Owner Trustee shall not be liable, on account of
such action or inaction, to any Person. If the Owner Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action, not inconsistent with this Agreement or
the Transaction Documents, as it shall deem to be in the best interest of the
Transferor, and shall have no liability to any Person for such action or
inaction.
Section 6.4 No Duties Except as Specified in this Agreement, the
Transaction 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 or the Trust is a
party, except as expressly provided by the terms of this Agreement, any
Transaction Document or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Transaction Document against the
Owner Trustee. The Owner Trustee shall have no responsibility for filing any
financing or continuation statement in any public office at anytime or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder or to prepare or file any Securities and Exchange
Commission filing for the Trust or to record this Agreement or any Transaction
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any
liens on any part of the Owner Trust Estate that result from actions by, or
claims against, the Owner Trustee that are not related to the ownership or the
administration of the Owner Trust Estate.
19
Section 6.5 No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the
Transaction Documents and (iii) in accordance with any document or instruction
delivered to the Owner Trustee pursuant to Section 6.3 above.
Section 6.6 Restrictions. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in Section
2.3 hereof or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation for Federal income tax
purposes. The Transferor shall not direct the Owner Trustee to take action
that would violate the provisions of this Section 6.6 .
20
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
Section 7.1 Acceptance of Trusts and Duties. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Agreement and the
Transaction Documents. The Owner Trustee also agrees to disburse all moneys
actually received by it constituting part of the Owner Trust Estate upon the
terms of the Transaction Documents and this Agreement. The Owner Trustee shall
not be answerable or accountable hereunder or under any Transaction Document
under any circumstances, except (i) for its own willful misconduct, bad faith
or negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.3 below expressly made by the Owner Trustee.
In particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment made by a responsible officer of the Owner Trustee;
(b) the execution, delivery, authentication and performance by
the Owner Trustee of this 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;
(c) no provision of this Agreement or any Transaction Document
shall require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Transaction Document if the Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or provided
to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Transaction Documents,
including the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect
of the validity or sufficiency of this Agreement or for the due execution
hereof by the Depositor or the Seller 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 Transaction Documents, other
than the certificate of authentication on the Ownership Interest, and the
Owner Trustee shall in no event assume or incur any liability, duty, or
obligation to any Noteholder, to the Transferor or other than as expressly
provided for herein and in the Transaction Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Seller, the Indenture Trustee, or the Servicer under any of
the Transaction Documents or otherwise and the Owner Trustee shall have no
obligation or liability to perform the obligations of the Trust under this
Agreement or the Transaction Documents that are required to be
21
performed by the Indenture Trustee under the Indenture, the Servicer under the
Sale and Servicing Agreement, the Administrator or [ ] under the
Administration Agreement or the Registrar or any Paying Agent hereunder;
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Transaction Document, at the request, order
or direction of the Transferor, unless such Transferor has offered to the
Owner Trustee security or indemnity satisfactory to it against the costs,
expenses and liabilities that may be incurred by the Owner Trustee therein or
thereby. The right of the Owner Trustee to perform any discretionary act
enumerated in this Agreement or in any Transaction Document shall not be
construed as a duty, and the Owner Trustee shall not be answerable for other
than its gross negligence or willful misconduct in the performance of any such
act; and.
(h) The Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in accordance with the instructions
of the Insurer, the Depositor or any Owner to the extent such action or
direction is permitted by the Transaction Documents.
Section 7.2 Furnishing of Documents. The Owner Trustee shall
furnish (a) to the Transferor promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Transaction Documents and (b) to Noteholders and the
Insurer promptly upon written request therefor, copies of the Sale and
Servicing Agreement and this Agreement.
Section 7.3 Representations and Warranties.
[Owner Trustee] hereby represents and warrants to the Depositor, for
the benefit of the Transferor and the Insurer, that:
(a) It is a banking corporation duly organized and validly
existing in good standing under the laws of the [ ]. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Agreement;
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf;
(c) Neither the execution nor the delivery by it of this
Agreement nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will
contravene any Federal or [ ] law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment or
order binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to which
it is a party or by which any of its properties may be bound;
22
(d) This Agreement has been duly authorized, executed and
delivered by the Owner Trustee and 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 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 Agreement or performing its obligations under this
Agreement.
Section 7.4 Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond, or other document or paper believed
by it to be genuine and believed by it to be signed by the proper party or
parties. The Owner Trustee may accept a certified copy of a resolution of the
board of directors or other governing body of any corporate party as
conclusive evidence that such resolution has been duly adopted by such body
and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein,
the Owner Trustee may for all purposes hereof rely on a certificate, signed by
the president or any vice president or by the treasurer or other authorized
officer of the relevant party, as to such fact or matter and such certificate
shall constitute full protection to the Owner Trustee for any action taken or
omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or
the Transaction Documents, the Owner Trustee (i) may act directly or through
its agents or attorneys pursuant to agreements entered into with any of them,
and the Owner Trustee shall not be liable for the conduct or misconduct of
such agents or attorneys if such agents or attorneys shall have been selected
by the Owner Trustee with reasonable care, and (ii) may consult with counsel,
accountants and other skilled persons to be selected with reasonable care and
employed by it. The Owner Trustee shall not be liable for anything done,
suffered or omitted in good faith by it in accordance with the opinion or
advice of any such counsel, accountants or other such persons and not contrary
to this Agreement or any Transaction Document.
Section 7.5 Not Acting in Individual Capacity. Except as provided in
this Article VII, in accepting the trusts hereby created, [Owner Trustee] acts
solely as Owner Trustee hereunder and not in its individual capacity and all
Persons having any claim against the Owner Trustee by
23
reason of the transactions contemplated by this Agreement or any Transaction
Document shall look only to the Owner Trust Estate for payment or satisfaction
thereof.
Section 7.6 Owner Trustee Not Liable for the Ownership Interest or
the Mortgage Loans. The recitals contained herein and in the Ownership
Interest (other than the signature of the Owner Trustee on the Certificate)
shall be taken as the statements of the Seller, and the Owner Trustee assumes
no responsibility for the correctness thereof. The Owner Trustee makes no
representations as to the validity or sufficiency of this Agreement, of any
Transaction Document or of the Ownership Interest (other than the signature of
the Owner Trustee on the Certificate and as specified in Section 7.3 hereof)
or the Notes, or of any Mortgage Loans or related documents. The Owner Trustee
shall at no time have any responsibility or liability for or with respect to
the legality, validity and enforceability of any Mortgage Loan, or the
perfection and priority of any security interest created by any Mortgage Loan
or the maintenance of any such perfection and priority, or for or with respect
to the sufficiency of the Owner Trust Estate or its ability to generate the
payments to be distributed to the Transferor under this Agreement or to the
Noteholders under the Indenture, including, without limitation: the existence,
condition and ownership of any Mortgaged Property; the existence and
enforceability of any insurance thereon; the existence and contents of any
Mortgage Loan on any computer or other record thereof; the validity of the
assignment of any Mortgage Loan to the Trust or of any intervening assignment;
the completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan; the compliance by the Depositor, the Seller or the Servicer
with any warranty or representation made under any Transaction Document or in
any related document or the accuracy of any such warranty or representation or
any action of the Depositor, the Seller, the Indenture Trustee, the
Administrator or the Servicer or any subservicer taken in the name of the
Owner Trustee.
Section 7.7 Owner Trustee May Own the Ownership Interest and the
Notes. The Owner Trustee in its individual or any other capacity may become
the owner or pledgee of the Ownership Interest or the Notes and may deal with
the Depositor, the Seller, the Indenture Trustee, the Administrator and the
Servicer in banking transactions with the same rights as it would have if it
were not Owner Trustee.
Section 7.8 Licenses. The Owner Trustee shall cause the Trust to use
its best efforts to obtain and maintain the effectiveness of any licenses
required in connection with this Agreement and the Transaction Documents and
the transactions contemplated hereby and thereby until such time as the Trust
shall terminate in accordance with the terms hereof.
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ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
Section 8.1 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 between the Seller and the
Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by [ ]
for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as the Owner Trustee may employ in connection with the
exercise and performance of its rights and its duties hereunder.
Section 8.2 Indemnification. [ ] shall be liable as primary obligor
for, and shall indemnify 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 Agreement, the Transaction Documents, the
Owner Trust Estate, the administration of the Owner Trust Estate or the action
or inaction of the Owner Trustee hereunder, except only that [ ] shall not be
liable for or required to indemnify an Indemnified Party from and against
Expenses arising or resulting from any of the matters described in the third
sentence of Section 7.1 hereof. The indemnities contained in this Section 8.2
shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement. In the event of any claim, action or proceeding
for which indemnity will be sought pursuant to this Section 8.2, the Owner
Trustee's choice of legal counsel shall be subject to the approval of the
Seller, which approval shall not be unreasonably withheld.
Section 8.3 Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part
of the Owner Trust Estate immediately after such payment.
25
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
Section 9.1 Termination of Trust Agreement.
(a) This Agreement (other than Article VIII) and the Trust shall
terminate pursuant to the Business Trust Statute and be of no further force or
effect on the earlier of (i) the satisfaction and discharge of the Indenture
pursuant to Section 4.1 of the Indenture and the termination of the Sale and
Servicing Agreement and (ii) the expiration of 21 years from the death of the
last survivor of the descendants of Xxxxxx X. Xxxxxxx (the late ambassador of
the United States to the Court of St. James's) alive on the date hereof. The
bankruptcy, liquidation, dissolution, death or incapacity of the Transferor
shall not (x) operate to terminate this Agreement or the Trust, nor (y)
entitle such Transferor's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a partition or
winding-up of all or any part of the Trust or Owner Trust Estate nor (z)
otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) The Ownership Interest shall be subject to an early
redemption or termination at the option of the Servicer in the manner and
subject to the provisions of Section 8.01 of the Sale and Servicing Agreement.
(c) Except as provided in Sections 9.1(a) and (b) above, none of
the Depositor, the Seller, the Administrator, or the Transferor shall be
entitled to revoke or terminate the Trust.
(d) Notice of any termination of the Trust, specifying the
Payment Date upon which the Transferor shall surrender their Ownership
Interest to the Paying Agent for payment of the final distributions and
cancellation, shall be given by the Registrar to the Transferor, the Insurer
and the Rating Agencies mailed within five Business Days of receipt by the
Registrar of notice of such termination pursuant to (a) or (b) above, which
notice given by the Owner Trustee shall state (i) the Payment Date upon or
with respect to which final payment of the Registrar shall be made upon
presentation and surrender of the Ownership Interest at the office of the
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 submission of a claim for and
acknowledgment of final distribution under the Ownership Interest at the
office of the Paying Agent therein specified. The Registrar shall give such
notice to the Owner Trustee and the Paying Agent at the time such notice is
given to the Transferor. Upon presentation of such submission of a claim for
and acknowledgment of final distribution under the Ownership Interest, the
Paying Agent shall cause to be distributed to the Transferor amounts
distributable on such Payment Date pursuant to Section 5.01 of the Sale and
Servicing Agreement.
In the event that the Transferor shall not have submitted claim
for and acknowledgment of final distribution under the Ownership Interest for
cancellation within six
26
months after the date specified in the above mentioned written notice, the
Registrar shall give a second written notice to the Transferor with respect
thereto. If within one year after such second notice, the Registrar may take
appropriate steps, or may appoint an agent to take appropriate steps, to
contact the Transferor concerning the final distribution, and the cost thereof
shall be paid out of the funds and other assets that shall remain subject to
this Agreement.
(e) Upon the winding up of the Trust and its termination, the
Owner Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
Business Trust Statute.
27
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 10.1 Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation satisfying the provisions of the
Business Trust Statute; authorized to exercise corporate 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 which has) a long-term rating of at least "A" (or its
equivalent) by each of Standard & Poor's, and Fitch and being acceptable to
the Insurer. If such corporation shall publish reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising
or examining authority, then for the purpose of this Section, the combined
capital and surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of this Section 10.1, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section
10.2.
Section 10.2 Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Trust, the Indenture Trustee,
the Rating Agencies, the Insurer and the Seller. Upon receiving such notice of
resignation, the Indenture Trustee shall promptly appoint a successor Owner
Trustee with the consent of the Insurer, which consent shall 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 Insurer may
petition any court of competent jurisdiction for the appointment of a
successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 above and shall fail to resign
after written request therefor by the Indenture Trustee, 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, at the
direction of the Insurer, shall, 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 Insurer by written instrument in duplicate,
one copy of which instrument shall be delivered to the outgoing Owner Trustee
so removed and one copy to the successor Owner Trustee and payment of all fees
owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section 10.
2 shall not become effective until acceptance of appointment by the successor
Owner Trustee pursuant to Section 10.3, written
28
approval by the Insurer and payment of all fees and expenses owed to the
outgoing Owner Trustee. The Indenture Trustee shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
Section 10.3 Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to
the Indenture Trustee, the Insurer and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee (if acceptable to the Insurer), without any
further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties, and obligations of its predecessor under this
Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses deliver
to the successor Owner Trustee all documents and statements and monies held by
it under this Agreement; and the Indenture Trustee 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 10.3 unless at the time of such acceptance such successor Owner
Trustee shall be eligible pursuant to Section 10.1 above.
Upon acceptance of appointment by a successor Owner Trustee pursuant
to this Section 10.3, the Indenture Trustee shall mail notice of the successor
of such Owner Trustee to the Transferor, the Noteholders, the Insurer and the
Rating Agencies. If the Indenture Trustee fails to mail such notice within 10
days after acceptance of appointment by the successor Owner Trustee, the
successor Owner Trustee shall cause such notice to be mailed at the expense of
the Indenture Trustee.
Section 10.4 Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which either may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or
any corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee, as
the case may be, hereunder, provided such corporation shall be eligible
pursuant to Section 10.1 above, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding; provided further that the
Owner Trustee, shall mail notice of such merger or consolidation to the
Depositor, the Seller, the Rating Agencies and the Insurer.
Section 10.5 Appointment of Co-Owner Trustee or Separate Owner
Trustee. Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Owner Trust Estate or any Mortgaged Property may at the time
be located, the Owner Trustee (with the consent of the
29
Insurer, which consent shall not be unreasonably withheld) shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons to act as co-owner trustee, jointly with the Owner Trustee, or
separate owner trustee or separate owner 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-owner trustee or separate
trustee under this Section 10.5 shall be required to meet the terms of
eligibility as a successor Owner Trustee pursuant to Section 10.1 above and no
notice of the appointment of any co-owner trustee or separate trustee shall be
required pursuant to Section 10.3 above.
The Owner Trustee hereby appoints the Indenture Trustee for the
purpose of establishing and maintaining the Distribution Account and making
the distributions therefrom to the Persons entitled thereto pursuant to
Section 5.01 of the Sale and Servicing Agreement.
Each separate trustee and co-owner trustee shall, to the extent
permitted by law, be appointed and act subject to the following provision and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate owner trustee or co-owner trustee
jointly (it being understood that such separate owner trustee or co-owner
trustee is not authorized to act separately without the Owner Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed, the
Owner Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties, and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-owner trustee but solely at the direction of the
Owner Trustee;
(ii) no owner trustee under this Agreement shall be personally
liable by reason of any act or omission of any other owner trustee under
this Agreement; and
(iii) the Owner Trustee may at any time accept the resignation of or
remove any separate trustee or co-owner trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to the separate trustees and co-owner trustees,
as if given to each of them. Every instrument appointing any separate owner
trustee or co-owner trustee, other than this Agreement, shall refer to this
Agreement and to the conditions of this Article X. Each separate trustee and
co-owner trustee, upon its acceptance of appointment, shall be vested with the
estates specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee.
30
Any separate trustee or co-owner trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any owner trustee or
co-owner trustee shall die, become incapable of acting, resign or be removed,
all of its estates, properties, rights, remedies and trusts shall vest in and
be exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
31
ARTICLE XI
MISCELLANEOUS
Section 11.1 Supplements and Amendments. This Agreement may be
amended by the Depositor, the Seller and the Owner Trustee with prior written
notice to the Rating Agencies and the Indenture Trustee and with the consent
of the Insurer (which consent shall not be unreasonably withheld), but without
the consent of any of the Noteholders, the Transferor or the Indenture
Trustee, to cure any ambiguity, to correct or supplement any provisions in
this Agreement or for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions in this Agreement or of
modifying in any manner the rights of the Noteholders or the Transferor;
provided, however, that such action shall not adversely affect in any material
respect the interests of any Noteholder, the Transferor or the Insurer. An
amendment described above shall be deemed not to adversely affect in any
material respect the interests of any Noteholder, the Transferor or the
Insurer if (i) an Opinion of Counsel is obtained to such effect, (ii) the
party requesting the amendment satisfies the Rating Agency Condition with
respect to such amendment.
This Agreement may also be amended from time to time by the Seller
and the Owner Trustee, with the prior written consent of the Rating Agencies,
the Insurer and the Indenture Trustee, the Noteholders evidencing more than
50% of the Percentage Interests in the Notes and the Transferor, for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Noteholders or the Transferor; provided, however, that no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, collections of payments on the Mortgage
Loans or distributions that shall be required to be made for the benefit of
the Noteholders or the Transferor or (b) reduce the aforesaid Percentage
Interests required to consent to any such amendment, without the consent of
the holders of all the outstanding Notes. The Depositor shall join in any such
amendment approved as provided in the preceding sentence so long as such
amendment is not adverse to the interests of the Depositor.
Promptly after the execution of any such amendment, the Owner Trustee
shall furnish written notification of the substance of such amendment to the
Indenture Trustee, the Insurer and each of the Rating Agencies.
It shall not be necessary for the consent of the Transferor, the
Noteholders or the Indenture Trustee pursuant to this Section 11.1 to approve
the particular form of any proposed amendment, but it shall be sufficient if
such consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of the Transferor provided for in this
Agreement or in any other Transaction Document) and of evidencing the
authorization of the execution thereof by the Transferor and the Noteholders
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe.
32
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
such execution and delivery have been satisfied. The Owner Trustee may, but
shall not be obligated to, enter into any such amendment which affects the
Owner Trustee's own rights, duties or immunities under this Agreement or
otherwise.
Section 11.2 No Legal Title to Owner Trust Estate in Transferor. The
Transferor shall not have legal title to any part of the Owner Trust Estate.
The Transferor shall be entitled to receive distributions with respect to
their undivided ownership interest therein only in accordance with Articles V
and IX herein. No transfer, by operation of law or otherwise, of any right,
title, or interest of the Transferor to and in its Ownership Interest shall
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of legal title to any
part of the Owner Trust Estate.
Section 11.3 Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Seller, the
Trust, the Insurer, the Transferor and, to the extent expressly provided
herein, the Indenture Trustee, the Insurer and the Noteholders, and nothing in
this Agreement, whether express or implied, shall be construed to give to any
other Person any legal or equitable right, remedy or claim in the Owner Trust
Estate or under or in respect of this Agreement or any covenants, conditions
or provisions contained herein.
Section 11.4 Notices.
(a) Unless otherwise expressly specified or permitted by the
terms hereof, all notices shall be in writing and shall be deemed given upon
receipt by the intended recipient or three Business Days after mailing if
mailed by certified mail, postage prepaid (except that notice to the Owner
Trustee shall be deemed given only upon actual receipt by the Owner Trustee),
at the following addresses: (i) if to the Owner Trustee, its Corporate Trust
Office; (ii) if to the Depositor, [ ], [ ]; (iii) if
to the Insurer, [ ]; (iv) if to the Indenture Trustee, its Corporate
Trust Office; (v) if to the Transferor, [ ]; (vi) if to the Seller, [ ];
or, as to each such party, at such other address as shall be designated by
such party in a written notice to each other party.
(b) Any notice required or permitted to be given to the
Transferor shall be given by first-class mail, postage prepaid, at the address
of such Transferor as shown in the Register. Any notice so mailed within the
time prescribed in this Agreement shall be conclusively presumed to have been
duly given, whether or not the Transferor receives such notice.
Section 11.5 Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such
33
prohibition or unenforceability without invalidating the remaining provisions
hereof, and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
Section 11.6 Separate Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 11.7 Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of the
Seller, the Owner Trustee, the Insurer and its successors and the Transferor
and its successors and permitted assigns, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument or action by the
Transferor shall bind the successors and assigns of the Transferor.
Section 11.8 No Petition. The Owner Trustee, by entering into this
Agreement, the Transferor, by accepting the Ownership Interest, and the
Indenture Trustee and each Noteholder by accepting the benefits of this
Agreement, hereby covenant and agree that they will not at any time institute
against the Transferor or the Trust, or join in any institution against the
Transferor, or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or law in connection with any obligations
relating to the Ownership Interest and the Notes, this Agreement or any of the
Transaction Documents.
Section 11.9 [Reserved].
Section 11.10 No Recourse. The Transferor by accepting the Ownership
Interest acknowledges that the Transferor's Ownership Interest represents a
beneficial interest in the Trust only and does not represent an interest in or
an obligation of the Servicer, the Seller, the Owner Trustee or any Affiliate
thereof and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated in this Agreement, the
Ownership Interest or the Transaction Documents.
Section 11.11 Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 11.12 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
34
Section 11.13
Inconsistencies with Sale and Servicing Agreement.
In the event certain provisions of this Agreement conflict with the
provisions of the Sale and Servicing Agreement, the parties hereto agree that
the provisions of the Sale and Servicing Agreement shall be controlling.
Section 11.14 Third Party Beneficiary.
The parties hereto acknowledge that the Insurer is an express third
party beneficiary hereof entitled to enforce the provisions hereof as if it
were actually a party hereto. Nothing in this Section 11.14 however shall be
construed to mitigate in any way, the fiduciary responsibilities of the Owner
Trustee to the beneficiaries of the Trust.
35
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
BOND SECURITIZATION, L.L.C.
as Owner Trustee
By:___________________________________
Name:
Title:
[ ],
as Depositor
By:___________________________________
Name:
Title:
[ ],
as Seller
By:___________________________________
Name:
Title:
EXHIBIT A
CERTIFICATE OF TRUST OF
[ ] HOME EQUITY LOAN TRUST [ ]
THIS Certificate of Trust of [ ] HOME EQUITY LOAN TRUST [ ] (the
"Trust"), is being duly executed and filed by [ ], a Delaware banking
corporation, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. Code, ss. 3801 et seq.)(the "Act").
1. Name. The name of the business trust formed hereby is [ ] HOME
EQUITY LOAN TRUST [ ].
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is [ ]. Attention: Corporate Trust
Administration Department.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the
Trust, has executed this Certificate of Trust in accordance with Section
3811(a) of the Act.
[ ], not in its
individual capacity but solely as
Owner Trustee under a Trust
Agreement dated as of [ ].
By:
--------------------------------
Name:
Title:
A-1
EXHIBIT B
TRANSFER CERTIFICATE
[Owner Trustee]
___________________________
___________________________
___________________________
Attention: [____________________]
Re: Trust Agreement, dated as of [ ], among [ ] Home Equity Loan
Trust 200_-_, [ ] and [ ], as Owner Trustee; [ ] Home
Equity Loan Trust 200_-_, Home Equity Loan Asset-Backed Notes,
Series 200_-_
---------------------------------------------------------------
Ladies and Gentlemen:
The undersigned (the "Transferee") has agreed to purchase from
________________________ (the "Transferor") the Ownership Interest:
A. Rule 144A "Qualified Institutional Buyers" should complete
this section
I. The Transferee is (check one):
_____ (i) An insurance company, as defined in Section 2(13) of
the Securities Act of 1933, as amended (the "Securities
Act"), (ii) an investment company registered under the
Investment Company Act of 1940, as amended (the
"Investment Company Act"), (iii) a business development
company as defined in Section 2(a)(48) of the Securities
Act, (iv) 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, (v) a plan established and maintained by a state,
its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions,
for the benefit of its employees, (vi) an employee benefit
plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, as amended
("ERISA"), (vii) a business development company as defined
in Section 202(a)(22) of the Investment Advisors Act of
1940, (viii) an organization described in Section
501(c)(3) of the Internal Revenue Code, corporation (other
than a bank as defined in Section 3(a)(2) of the
Securities Act or a savings and loan association or
B-1
other institution referenced in Section 3(a)(2) of the
Securities Act or a foreign bank or savings and loan
association or equivalent institution), partnership, or
Massachusetts or similar business trust; or (ix) an
investment advisor registered under the Investment
Advisors Act of 1940, which, for each of (i) through (ix),
owns and invests on a discretionary basis at least $100
million in securities other than securities of issuers
affiliated with the Transferee, securities issued or
guaranteed by the United States or a person controlled or
supervised by and acting as an instrumentality of the
government of the United States pursuant to authority
granted by the Congress of the United States, bank deposit
notes and certificates of deposit, loan participations,
repurchase agreements, securities owned but subject to a
repurchase agreement, and currency, interest rate and
commodity swaps (collectively, "Excluded Securities");
_____ a dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act") that in the aggregate owns and invests on a
discretionary basis at least $10 million of securities
other than Excluded Securities and securities constituting
the whole or part of an unsold allotment to, or
subscription by, Transferee as a participant in a public
offering;
_____ an investment company registered under the Investment
Company Act that is part of a family of investment
companies (as defined in Rule 144A of the Securities and
Exchange Commission) which own in the aggregate at least
$100 million in securities other than Excluded Securities
and securities of issuers that are part of such family of
investment companies;
_____ an entity, all of the equity owners of which are entities
described in this Paragraph A(I);
_____ a bank as defined in Section 3(a)(2) of the Securities
Act, any savings and loan association or other institution
as referenced in Section 3(a)(5)(A) of the Securities Act,
or any foreign bank or savings and loan association or
equivalent institution that in the aggregate owns and
invests on a discretionary basis at least $100 million in
securities other than Excluded Securities and has an
audited net worth of at least $25 million as demonstrated
in its latest annual financial statements, as of a date
not more than 16 months preceding the date of transfer of
the Ownership Interest to the Transferee in the case of a
U.S. Bank or savings and loan association, and not more
than 18 months preceding such date in the case of a
foreign bank or savings association or equivalent
institution.
II. The Transferee is acquiring such Ownership Interest solely
for its own account, for the account of one or more others, all of which are
"Qualified Institutional Buyers"
B-2
within the meaning of Rule 144A, or in its capacity as a dealer registered
pursuant to Section 15 of the Exchange Act acting in a riskless principal
transaction on behalf of a "Qualified Institutional Buyer". The Transferee is
not acquiring such Ownership Interest with a view to or for the resale,
distribution, subdivision or fractionalization thereof which would require
registration of the Ownership Interest under the Securities Act.
B. "Accredited Investors" should complete this Section
I. The Transferee is (check one):
_____ a bank within the meaning of Section 3(a)(2) of the
Securities Act;
_____ a savings and loan association or other institution
defined in Section 3(a)(5) of the Securities Act;
_____ a broker or dealer registered pursuant to the Exchange
Act;
_____ an insurance company within the meaning of Section 2(13)
of the Securities Act;
_____ an investment company registered under the Investment
Company Act;
_____ an employee benefit plan within the meaning of Title I of
ERISA, which has total assets in excess of $5,000,000;
_____ another entity which is an "accredited investor" within
the meaning of paragraph (fill in) of subsection (a) of
Rule 501 of the Securities and Exchange Commission.
II. The Transferee is acquiring such Ownership Interest solely
for its own account, for investment, and not with a view to or for the resale,
distribution, subdivision or fractionalization thereof which would require
registration of the Ownership Interest under the Securities Act.
C. If the Transferee is unable to complete one of paragraph A(I)
or paragraph B(I) above, the Transferee must furnish an opinion in form and
substance satisfactory to the Trustee of counsel satisfactory to the Trustee
to the effect that such purchase will not violate any applicable federal or
state securities laws.
D. The Transferee represents that it is not (A) an "employee
benefit plan" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or (B) a "plan" within the
meaning of Section 4975(e)(1) of the Code (any such plan or employee benefit
plan, a "Plan") or (C) any entity, including an insurance company separate
account or general account, whose underlying assets include plan assets by
reason of a
B-3
plan's investment in the entity and is not directly or indirectly purchasing
such Trust Security on behalf of, as investment manager of, as named fiduciary
of, as trustee of, or with assets of a Plan.
(iii) the Transferee is an "accredited investor" as defined in
Rule 501(a) of Regulation D pursuant to the Securities Act.
Very truly yours,
[NAME OF PURCHASER]
By:____________________________
Title: ________________________
Dated:
THE FOREGOING IS ACKNOWLEDGED THIS ____ DAY OF __________, 199_.
[NAME OF SELLER]
By:____________________________
Title: ________________________
B-4
