EXHIBIT 4.5
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
Issuer
AND
U.S. BANK NATIONAL ASSOCIATION
Indenture Trustee
INDENTURE
Dated as of December 14, 2001
------------------------------------------
C-BASS MORTGAGE LOAN ASSET-BACKED NOTES
-------------
TABLE OF CONTENTS
-----------------
Section Page
------- ----
ARTICLE I
Definitions
Section 1.01 DEFINITIONS.................................................................................2
Section 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT...........................................2
Section 1.03 RULES OF CONSTRUCTION.......................................................................2
ARTICLE II
Original Issuance of Notes
Section 2.01 FORM........................................................................................4
Section 2.02 EXECUTION, AUTHENTICATION AND DELIVERY......................................................4
Section 2.03 ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE...........................................5
Section 2.04 ACCEPTANCE BY INDENTURE TRUSTEE.............................................................7
ARTICLE III
Covenants
Section 3.01 COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS..................................10
Section 3.02 MAINTENANCE OF OFFICE OR AGENCY............................................................10
Section 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT.......................................10
Section 3.04 EXISTENCE..................................................................................11
Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST......................................11
Section 3.06 ALLOCATION OF REALIZED LOSSES..............................................................20
Section 3.07 EXCESS RESERVE FUND ACCOUNT................................................................21
Section 3.08 PROTECTION OF TRUST ESTATE.................................................................22
Section 3.09 OPINIONS AS TO TRUST ESTATE................................................................22
Section 3.10 PERFORMANCE OF OBLIGATIONS; SERVICING AGREEMENT............................................23
Section 3.11 NEGATIVE COVENANTS.........................................................................23
Section 3.12 ANNUAL STATEMENT AS TO COMPLIANCE..........................................................24
Section 3.13 RESERVED...................................................................................25
Section 3.14 REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS...............................25
Section 3.15 AMENDMENTS TO SERVICING AGREEMENT..........................................................25
Section 3.16 SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE......................................25
Section 3.17 INVESTMENT COMPANY ACT.....................................................................25
Section 3.18 RESERVED...................................................................................25
Section 3.19 SUCCESSOR OR TRANSFEREE....................................................................25
Section 3.20 NO OTHER BUSINESS..........................................................................26
Section 3.21 NO BORROWING...............................................................................26
Section 3.22 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES..........................................26
Section 3.23 CAPITAL EXPENDITURES.......................................................................26
Section 3.24 RESERVED...................................................................................26
i
Section 3.25 RESTRICTED PAYMENTS........................................................................26
Section 3.26 NOTICE OF EVENTS OF DEFAULT................................................................26
Section 3.27 FURTHER INSTRUMENTS AND ACTS...............................................................27
Section 3.28 STATEMENTS TO NOTEHOLDERS..................................................................27
ARTICLE IV
The Notes; Satisfaction and Discharge of Indenture
Section 4.01 THE NOTES..................................................................................29
Section 4.02 REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
OF NOTES; APPOINTMENT OF NOTE REGISTRAR....................................................29
Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.................................................33
Section 4.04 PERSONS DEEMED OWNERS......................................................................34
Section 4.05 CANCELLATION...............................................................................34
Section 4.06 BOOK-ENTRY NOTES...........................................................................34
Section 4.07 NOTICES TO DEPOSITORY......................................................................35
Section 4.08 DEFINITIVE NOTES...........................................................................35
Section 4.09 TAX TREATMENT..............................................................................36
Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE....................................................36
Section 4.11 APPLICATION OF TRUST MONEY.................................................................37
Section 4.12 REPAYMENT OF MONIES HELD BY PAYING AGENT...................................................37
Section 4.13 TEMPORARY NOTES............................................................................38
ARTICLE V
Default and Remedies
Section 5.01 EVENTS OF DEFAULT..........................................................................39
Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.........................................39
Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE..........................................................................39
Section 5.04 REMEDIES; PRIORITIES.......................................................................41
Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE..................................................45
Section 5.06 LIMITATION OF SUITS........................................................................46
Section 5.07 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL AND INTEREST......................46
Section 5.08 RESTORATION OF RIGHTS AND REMEDIES.........................................................47
Section 5.09 RIGHTS AND REMEDIES CUMULATIVE.............................................................47
Section 5.10 DELAY OR OMISSION NOT A WAIVER.............................................................47
Section 5.11 CONTROL BY NOTEHOLDERS.....................................................................47
Section 5.12 WAIVER OF PAST DEFAULTS....................................................................48
Section 5.13 UNDERTAKING FOR COSTS......................................................................48
Section 5.14 WAIVER OF STAY OR EXTENSION LAWS...........................................................48
Section 5.15 SALE OF TRUST ESTATE.......................................................................48
Section 5.16 ACTION ON NOTES............................................................................50
Section 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS.........................................50
ii
ARTICLE VI
The Indenture Trustee
Section 6.01 DUTIES OF INDENTURE TRUSTEE................................................................52
Section 6.02 RIGHTS OF INDENTURE TRUSTEE................................................................53
Section 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE.....................................................54
Section 6.04 INDENTURE TRUSTEE'S DISCLAIMER.............................................................54
Section 6.05 NOTICE OF EVENT OF DEFAULT.................................................................54
Section 6.06 RESERVED...................................................................................54
Section 6.07 COMPENSATION AND INDEMNITY.................................................................54
Section 6.08 REPLACEMENT OF INDENTURE TRUSTEE...........................................................55
Section 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER......................................................56
Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE TRUSTEE..........................56
Section 6.11 ELIGIBILITY; DISQUALIFICATION..............................................................57
Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER...........................................58
Section 6.13 REPRESENTATIONS AND WARRANTIES.............................................................58
Section 6.14 DIRECTIONS TO INDENTURE TRUSTEE............................................................58
Section 6.15 INDENTURE TRUSTEE MAY OWN NOTES............................................................59
Section 6.16 THE AGENTS.................................................................................59
ARTICLE VII
Noteholders' Lists and Reports
Section 7.01 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS................................................................................60
Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.................................60
Section 7.03 REPORTS BY ISSUER..........................................................................60
Section 7.04 REPORTS BY INDENTURE TRUSTEE...............................................................61
Section 7.05 STATEMENTS TO NOTEHOLDERS..................................................................61
Section 7.06 BOOKS AND RECORDS..........................................................................64
ARTICLE VIII
Accounts, Disbursements and Releases
Section 8.01 COLLECTION OF MONEY........................................................................65
Section 8.02 TRUST ACCOUNTS.............................................................................65
Section 8.03 OFFICER'S CERTIFICATE......................................................................65
Section 8.04 TERMINATION UPON PAYMENT TO NOTEHOLDERS....................................................66
Section 8.05 RELEASE OF TRUST ESTATE....................................................................66
Section 8.06 SURRENDER OF NOTES UPON FINAL PAYMENT......................................................66
Section 8.07 OPTIONAL REDEMPTION OF THE NOTES...........................................................66
ARTICLE IX
Supplemental Indentures
Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.....................................68
iii
Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS........................................69
Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES.......................................................71
Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE...........................................................71
Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT........................................................71
Section 9.06 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES..............................................71
ARTICLE X
REMIC Administration
Section 10.01 INDENTURE TRUSTEE TO ADMINISTER REMIC.................................................72
Section 10.02 PROHIBITED TRANSACTIONS AND ACTIVITIES................................................74
Section 10.03 INDEMNIFICATION WITH RESPECT TO CERTAIN TAXES AND LOSS OF
REMIC STATUS..........................................................................74
Section 10.04 REMIC PAYMENT RULES...................................................................75
ARTICLE XI
Miscellaneous
Section 11.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC.............................................79
Section 11.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE......................................80
Section 11.03 ACTS OF NOTEHOLDERS...................................................................81
Section 11.04 NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING AGENCIES.......................81
Section 11.05 NOTICES TO NOTEHOLDERS; WAIVER........................................................82
Section 11.06 ALTERNATE PAYMENT AND NOTICE PROVISIONS...............................................83
Section 11.07 CONFLICT WITH TRUST INDENTURE ACT.....................................................83
Section 11.08 EFFECT OF HEADINGS....................................................................83
Section 11.09 SUCCESSORS AND ASSIGNS................................................................83
Section 11.10 SEPARABILITY..........................................................................83
Section 11.11 BENEFITS OF INDENTURE.................................................................83
Section 11.12 LEGAL HOLIDAYS........................................................................83
Section 11.13 GOVERNING LAW.........................................................................83
Section 11.14 COUNTERPARTS..........................................................................84
Section 11.15 RECORDING OF INDENTURE................................................................84
Section 11.16 ISSUER OBLIGATION.....................................................................84
Section 11.17 NO PETITION...........................................................................84
Section 11.18 INSPECTION............................................................................84
Signatures and Seals
Acknowledgments
iv
EXHIBITS:
--------
Exhibit A-1 Form of Class IA-IO Notes
Exhibit A-2 Form of Class IA-1 Notes
Exhibit A-3 Form of Class IM-1 Notes
Exhibit A-4 Form of Class IM-2 Notes
Exhibit A-5 Form of Class IB-1 Notes
Exhibit A-6 Form of Class IX Notes
Exhibit A-7 Form of Class IN Notes
Exhibit A-8 Form of Class R Notes
Exhibit A-9 Form of Class R-4 Notes
Exhibit A-10 Form of Class IIA-1 Notes
Exhibit A-11 Form of Class IIM-1 Notes
Exhibit A-12 Form of Class IIM-2 Notes
Exhibit A-13 Form of Class IIB-1 Notes
Exhibit A-14 Form of Class IIX Notes
Exhibit A-15 Form of Class IIN Notes
Exhibit B-1 Form of Trustee's Initial Certification
Exhibit B-2 Form of Trustee's Final Certification
Exhibit B-3 Form of Receipt of Mortgage Note
Exhibit C Form of ERISA Representation
Exhibit D Form of Investment Letter
Exhibit E Form of Class R and Class R-4 Note Transfer Affidavit
Exhibit F Form of Transferor Certificate
Exhibit G Form of Liquidation Report
Exhibit H Form of Cap Contract
Exhibit I Form of Cap Contract Pledge Agreement
Appendix A Definitions
v
This is the Indenture, dated as of December 14, 2001, between Salomon
Mortgage Loan Trust 2001-CB4, a Delaware business trust, as Issuer (the
"Issuer"), and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee"),
WITNESSETH THAT:
Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuer's Series
2001-CB4 C-Bass Mortgage Loan Asset-Backed Notes (the "Notes").
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Holders of the Notes, all of the Issuer's
right, title and interest in and to whether now existing or hereafter created
(i) each Mortgage Loan identified on the Mortgage Loan Schedule, including the
related Cut-Off Date Principal Balance, all interest accruing thereon after the
Cut-Off Date and all collections in respect of interest and principal due after
the Cut-Off Date; (ii) property which secured each such Mortgage Loan and which
has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its
interest in any insurance policies in respect of the Mortgage Loans; (iv) all
proceeds of any of the foregoing; (v) the rights of the Depositor under the
Mortgage Loan Purchase Agreement and all rights under the Servicing Agreement,
(vi) all other assets included or to be included in the Trust Estate; provided,
however, so long as the Servicer is an FHA Approved Mortgagee, the Commissioner
of HUD shall have no obligation to recognize or deal with any person other than
the Servicer with respect to FHA Insurance, (vii) all payments received under
the Cap Contract and the Cap Contract Pledge Agreement and all payments received
under the Cap Contract Pledge Agreement and (viii) all present and future
claims, demands, causes and choses in action in respect of any or all of the
foregoing and all payments on or under, and all proceeds of every kind and
nature whatsoever in respect of, any or all of the foregoing and all payments on
or under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as trustee on behalf of the Holders of the
Notes, acknowledges such Xxxxx, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
"TIA"), the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Indenture
Trustee.
"obligor" on the indenture securities means the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
Section 1.03 RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation;
(v) words in the singular include the plural and words in
the plural include the singular; and
2
(vi) 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.
3
ARTICLE II
ORIGINAL ISSUANCE OF NOTES
Section 2.01 FORM. The Notes, together with the Indenture Trustee's
certificate of authentication, shall be in substantially the forms set forth in
Exhibits A-1 through A-15, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Notes shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders), all as determined by the Authorized Officers executing such Notes, as
evidenced by their execution of such Notes. The terms of the Notes set forth in
Exhibits A-1 through A-16 are part of the terms of this Indenture.
The terms of the Notes set forth in Exhibits A-1 through A-15 are part
of the terms of this Indenture.
Section 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. The Notes shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The Indenture Trustee shall upon Issuer Request authenticate and
deliver Notes, for original issue in an aggregate initial principal amount of
$278,027,000. The Notes shall be divided among the following classes, having
designations, Note Rates, initial Note Balances and Final Maturity Dates as
follows:
4
DESIGNATION NOTE RATE INITIAL NOTE BALANCE FINAL MATURITY DATE
----------- --------- -------------------- -------------------
Class IA-1 Note(1) Variable(4) $ 228,959,000.00 November 25, 2033
Class IA-IO(1) Variable(4) $ 89,039,838.00(5) November 25, 2033
Class IM-1 Note(1) Variable(4) $ 10,176,000.00 November 25, 2033
Class IM-2 Note(1) Variable(4) $ 6,360,000.00 November 25, 2033
Class IB-1 Note(1) Variable(4) $ 5,088,000.00 November 25, 2033
Class IX Notes(2) Variable(4) N/A November 25, 2033
Class IN Notes(2) Variable(4) $ 13,500,000.00(5) November 25, 2033
Class R Notes(3) N/A N/A November 25, 2033
Class R-4 Notes(3) N/A N/A November 25, 2033
Class IIA-1 Notes Variable(4) $ 20,387,000.00 November 25, 2033
Class IIM-1 Notes Variable(4) $ 1,882,000.00 November 25, 2033
Class IIM-2 Notes Variable(4) $ 3,136,000.00 November 25, 2033
Class IIB-1 Notes Variable(4) $ 2,039,000.00 November 25, 2033
Class IIX Notes Variable(4) N/A November 25, 2033
Class IIN Notes Variable(4) $ 2,800,000.00(5) November 25, 2033
(1) Represents a regular interest in a real estate mortgage investment conduit
("REMIC") as defined in Section 860D of the Internal Revenue Code of 1986.
(2) When held together by the same Holder, the Class IX Notes and the Class IN
Notes shall be treated as a regular interest in a REMIC. When held
separately, the Class IN Notes shall be treated as indebtedness of the
Holder of the Class IX Notes.
(3) Represents the sole residual interest in one or more REMICs as defined in
Section 860D of the Code.
(4) Calculated in accordance with the definition of Note Rate.
(5) Notional Amount.
The Notes shall be dated the date of their authentication. The Notes
shall be issuable as registered Notes and the Notes shall be issuable in the
minimum initial Note Balances or Notional Amounts of $25,000 and in integral
multiples of $1 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
Section 2.03 ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE.
5
The Indenture Trustee acknowledges receipt, subject to Section 2.04, of
(or receipt by the Custodian as the duly appointed agent of the Indenture
Trustee) the following documents or instruments with respect to each Mortgage
Loan transferred to the Indenture Trustee pursuant to the Granting Clause:
(i) the original Mortgage Note, endorsed either (A) in blank
or (B) in the following form: "Pay to the order of U.S. Bank National
Association, as Indenture Trustee under the Indenture, dated as of
December 14, 2001 between Salomon Mortgage Loan Trust 2001-CB4 and U.S.
Bank National Association, C-BASS Mortgage Loan Asset-Backed Notes,
without recourse", or with respect to any lost Mortgage Note, an
original lost note affidavit stating that the original mortgage note
was lost, misplaced or destroyed, together with a copy of the related
mortgage note;
(ii) the original Mortgage with evidence of recording thereon,
and the original recorded power of attorney, if the Mortgage was
executed pursuant to a power of attorney, with evidence of recording
thereon or, if such Mortgage or power of attorney has been submitted
for recording but has not been returned from the applicable public
recording office, has been lost or is not otherwise available, a copy
of such Mortgage or power of attorney, as the case may be, certified to
be a true and complete copy of the original submitted for recording;
(iii) an original Assignment of Mortgage, in form and
substance acceptable for recording. The Mortgage shall be assigned
either (A) in blank or (B) to "U.S. Bank National Association, as
Indenture Trustee under the Indenture, dated as of December 14, 2001
between Salomon Mortgage Loan Trust 2001-CB4 and U.S. Bank National
Association, C-BASS Mortgage Loan Asset-Backed Notes, without
recourse";
(iv) an original copy of any intervening Assignment of
Mortgage showing a complete chain of assignments;
(v) the original or a certified copy of lender's title
insurance policy;
(vi) the original or copies of each assumption, modification,
written assurance or substitution agreement, if any;
(vii) for each FHA Loan, the original Mortgage Insurance
Certificate; and
(viii) for each VA Loan, the original Loan Guaranty
Certificate.
The Indenture Trustee agrees to execute and deliver (or cause the
Custodian to execute and deliver) to the Depositor on or prior to the Closing
Date an acknowledgment of receipt of the original Mortgage Notes (with any
exceptions noted), substantially in the form attached as Exhibit B-3 hereto.
The Issuer shall cause the Seller or Servicer to, within 90 days
following the Closing Date, with respect to each Mortgage Loan that is subject
to the provisions of the Homeownership and
6
Equity Protection Act of 1994, place a legend on the original Mortgage Note
indicating the satisfaction of the provisions of such Act and the regulations
issued thereunder, to the effect that the Mortgage Loan is subject to special
truth in lending rules.
The Issuer, at the expense of the Seller, shall promptly (and in no
event later than thirty days following the Closing Date) submit or cause to be
submitted for recording, at the Seller's expense and at no expense to the Trust
Estate or the Indenture Trustee, in the appropriate public office for real
property records, each Assignment referred to in this Section 2.03(iii) and (iv)
above. The Issuer shall furnish the Trustee, or its designated agent, with a
copy of each assignment of Mortgage submitted for recording. In the event that
any such Assignment is lost or returned unrecorded because of a defect therein,
the Issuer shall cause Seller to promptly have a substitute Assignment prepared
or have such defect cured, as the case may be, and thereafter cause each such
Assignment to be duly recorded. In the event that any Mortgage Note is endorsed
in blank as of the Closing Date, promptly following the Closing Date the Issuer
shall cause to be completed such endorsements "Pay to the order of U.S. Bank
National Association, as Indenture Trustee under the Indenture, dated as of
December 14, 2001 between Salomon Mortgage Loan Trust 2001-CB4 and U.S. Bank
National Association, C-BASS Mortgage Loan Asset-Backed Notes, without
recourse."
If any of the documents referred to in Section 2.03(ii), (iii) or (iv)
above has as of the Closing Date been submitted for recording but either (x) has
not been returned from the applicable public recording office or (y) has been
lost or such public recording office has retained the original of such document,
the obligations of the Issuer to deliver such documents shall be deemed to be
satisfied upon (1) delivery to the Indenture Trustee or the Custodian no later
than the Closing Date, of a copy of each such document certified by the Seller
in the case of (x) above or the applicable public recording office in the case
of (y) above to be a true and complete copy of the original that was submitted
for recording and (2) if such copy is certified by the Seller, delivery to the
Indenture Trustee or the Custodian, promptly upon receipt thereof of either the
original or a copy of such document certified by the applicable public recording
office to be a true and complete copy of the original. The Issuer shall deliver
or cause to be delivered to the Indenture Trustee or the Custodian promptly upon
receipt thereof any other documents constituting a part of a Mortgage File
received with respect to any Mortgage Loan, including, but not limited to, any
original documents evidencing an assumption or modification of any Mortgage
Loan.
Upon discovery or receipt of notice of any materially defective
document in, or that a document is missing from, a Mortgage File, the Issuer
shall cause the Seller to cure such defect within 120 days or 150 days following
the Closing Date, in the case of missing Mortgages or Assignments or deliver
such missing document to the Indenture Trustee or the Custodian. If the Seller
does not cure such defect or deliver such missing document within such time
period, the Issuer shall cause the Seller to either repurchase or substitute for
such Mortgage Loan in accordance with the terms of the Mortgage Loan Purchase
Agreement.
Section 2.04 ACCEPTANCE BY INDENTURE TRUSTEE.
The Indenture Trustee acknowledges the receipt of, subject to the
provisions of Section 2.03 and subject to the review described below and any
exceptions noted on the exception report described in the next paragraph below,
the documents referred to in Section 2.03 above and all other
7
assets included in the definition of "Trust Estate" as set forth in the Granting
Clause of this Indenture (to the extent of amounts deposited into the Payment
Account) and declares that it holds and will hold such documents and the other
documents delivered to it constituting a Mortgage File, and that it holds or
will hold all such assets and such other assets included in the definition of
"Trust Estate" in trust for the exclusive use and benefit of all present and
future Noteholders.
The Indenture Trustee agrees, for the benefit of the Noteholders, to
review (or cause the Custodian to review) each Mortgage File within 60 days
after the Closing Date (or, with respect to any Qualified Substitute Mortgage,
within 60 days after the assignment thereof) and to certify in substantially the
form attached hereto as Exhibit B-1 that, as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any
Mortgage Loan specifically identified in the exception report annexed thereto as
not being covered by such certification), (i) all documents required to be
delivered to it pursuant Section 2.03 of this Agreement are in its possession,
(ii) such documents have been reviewed by it and have not been mutilated,
damaged or torn and relate to such Mortgage Loan and (iii) based on its
examination and only as to the foregoing, the information set forth in the
Mortgage Loan Schedule that corresponds to items (1), (2), (3), (5), (13) and
(26) (in the case of (26), only as to whether there is a prepayment penalty) of
the Mortgage Loan Schedule accurately reflects information set forth in the
Mortgage File. It is herein acknowledged that, in conducting such review, the
Indenture Trustee (or the Custodian, as applicable) is under no duty or
obligation to inspect, review or examine any such documents, instruments,
certificates or other papers to determine that they are genuine, enforceable, or
appropriate for the represented purpose or that they have actually been recorded
or that they are other than what they purport to be on their face.
Prior to the first anniversary date of this Indenture the Indenture
Trustee shall deliver (or cause the Custodian to deliver) to the Depositor and
the Servicer a final certification in the form annexed hereto as Exhibit B-2
evidencing the completeness of the Mortgage Files, with any applicable
exceptions noted thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the
Indenture Trustee (or the Custodian, as applicable) finds any document or
documents constituting a part of a Mortgage File to be missing or defective in
any material respect, at the conclusion of its review the Indenture Trustee
shall so notify the Seller, the Depositor and the Servicer. In addition, upon
the discovery by the Seller, Depositor or the Servicer (or upon receipt by the
Indenture Trustee of written notification of such breach) of a breach of any of
the representations and warranties made by the Seller in the Mortgage Loan
Purchase Agreement in respect of any Mortgage Loan which materially adversely
affects such Mortgage Loan or the interests of the related Noteholders in such
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties.
The Indenture Trustee acknowledges the issuance of the uncertificated
REMIC 1 Regular Interests and declares that it holds such regular interests as
assets of REMIC 2. The Indenture Trustee acknowledges the issuance of the
uncertificated REMIC 2 Regular Interests and declares that it holds such regular
interests as assets of REMIC 3. The Indenture Trustee acknowledges the issuance
of the uncertificated Class IT3-X/N Interest, and declares that it holds the
same as an asset
8
of REMIC 4 on behalf of the Holders of the Class IX/N Interest, initially the
Holders of the Class IN and Class IX Notes.
9
ARTICLE III
COVENANTS
Section 3.01 COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS.
The Indenture Trustee shall establish and maintain with itself an account (the
"Payment Account") in which the Indenture Trustee shall, subject to the terms of
this paragraph, deposit, on the same day as it is received from the Servicer,
each remittance received by the Indenture Trustee with respect to the Mortgage
Loans. The Indenture Trustee shall make all payments of principal of and
interest on the Notes, subject to Section 3.03, as provided in Section 3.05
herein from monies on deposit in the Payment Account.
Section 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in the City of St. Xxxx, an office or agency where, subject to satisfaction of
conditions set forth herein, Notes may be surrendered for registration of
transfer or exchange, and where notices and demands to or upon the Issuer in
respect of the Notes and this Indenture may be served. The Issuer hereby
initially appoints the Indenture Trustee to serve as its agent for the foregoing
purposes. If at any time the Issuer shall fail to maintain any such office or
agency or shall fail to furnish the Indenture Trustee with the address thereof,
such surrenders, notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.
Section 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST; PAYING AGENT. (a)
As provided in Section 3.01, all payments of amounts due and payable with
respect to any Notes that are to be made from amounts withdrawn from the Payment
Account pursuant to Section 3.01 shall be made on behalf of the Issuer by the
Indenture Trustee or by the Paying Agent, and no amounts so withdrawn from the
Payment Account for payments of Notes shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer will cause each Paying Agent other
than the Indenture Trustee to execute and deliver to the Indenture Trustee an
instrument in which such Paying Agent shall agree with the Indenture Trustee
(and if the Indenture Trustee acts as Paying Agent it hereby so agrees), subject
to the provisions of this Section 3.03, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give the Indenture Trustee written notice of any default
by the Issuer of which it has actual knowledge in the making of any
payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of the Indenture Trustee, forthwith pay to the
Indenture Trustee all sums so held in trust by such Paying Agent;
10
(iv) immediately resign as Paying Agent and forthwith pay to
the Indenture Trustee all sums held by it in trust for the payment of
Notes if at any time it ceases to meet the standards required to be met
by a Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith; and
(vi) not commence a bankruptcy.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Request direct any Paying Agent to pay to the Indenture Trustee all sums held in
trust by such Paying Agent, such sums to be held by the Indenture Trustee upon
the same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable laws with respect to escheat of funds, any money
held by the Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for one year
after such amount has become due and payable shall be discharged from such trust
and be paid to the Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the Indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Issuer. The Indenture Trustee may also adopt and employ,
at the expense and direction of the Issuer, any other reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Paying Agent, at the last address of record for each such
Holder).
Section 3.04 EXISTENCE. The Issuer will keep in full effect its
existence, rights and franchises as a business trust under the laws of the State
of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Mortgage Loans and each other
instrument or agreement included in the Trust Estate.
Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST; DEFAULTED INTEREST.
11
INTEREST PAYMENTS
(I) On each Payment Date from amounts on deposit in the Payment
Account, after withdrawal of any amounts owed to the Indenture Trustee, the PMI
Insurer or the Owner Trustee pursuant to Section 6.07, the Paying Agent shall
withdraw from the Payment Account the Interest Remittance Amount with respect to
the Group I Mortgage Loans and apply it in the following order of priority
(based upon the Group I Mortgage Loan information provided to it in the
Remittance Report, upon which the Indenture Trustee may conclusively rely), and
the calculations required to be made by the Indenture Trustee, to the extent
available:
(i) concurrently, to the Class IA-IO and Class IA-1 Notes, PRO
RATA, the applicable Accrued Note Interest thereon for such Payment
Date;
(ii) concurrently, to the Class IA-IO and Class IA-1 Notes,
PRO RATA, the applicable Interest Carry Forward Amount for the Class
IA-IO and Class IA-1 Notes, respectively;
(iii) to the Class IM-1 Notes, the Accrued Note Interest
thereon for such Payment Date;
(iv) to the Class IM-2 Notes, the Accrued Note Interest
thereon for such Payment Date;
(v) to the Class IB-1 Notes, the Accrued Note Interest thereon
for such Payment Date; and
(vi) the amount, if any, of the Interest Remittance Amount
relating to the Group I Mortgage Loans remaining after application with
respect to the priorities set forth above will be applied as described
under clause (I) of MONTHLY EXCESS CASHFLOW PAYMENTS below.
(II) On each Payment Date from amounts on deposit in the Payment
Account, after withdrawal of any amounts owed to the Indenture Trustee, the PMI
Insurer or the Owner Trustee pursuant to Section 6.07, the Paying Agent shall
withdraw from the Payment Account the Interest Remittance Amount with respect to
the Group II Mortgage Loans and apply it in the following order of priority
(based upon the Group II Mortgage Loan information provided to it in the
Remittance Report, upon which the Indenture Trustee may conclusively rely), and
the calculations required to be made by the Indenture Trustee, to the extent
available:
(i) to the Class IIA-1 Notes, the applicable Accrued Note
Interest thereon for such Payment Date;
(ii) to the Class IIA-1 Notes, the applicable Interest Carry
Forward Amount for the Class IIA-1 Notes;
12
(iii) to the Class IIM-1 Notes, the Accrued Note Interest
thereon for such Payment Date;
(iv) to the Class IIM-2 Notes, the Accrued Note Interest
thereon for such Payment Date;
(v) to the Class IIB-1 Notes, the Accrued Note Interest
thereon for such Payment Date; and
(vi) the amount, if any, of the Interest Remittance Amount
relating to the Group II Mortgage Loans remaining after application
with respect to the priorities set forth above will be applied as
described under clause (II) of MONTHLY EXCESS CASHFLOW PAYMENTS below.
PRINCIPAL PAYMENTS
(I) On each Payment Date, the Indenture Trustee shall make the
following payments in the following order of priority (based upon the Group I
Mortgage Loan information provided to it in the Remittance Report), and the
calculations required to be made by the Indenture Trustee, to the extent of the
Group I Principal Payment Amount:
(i) before the Group I Stepdown Date or with respect to which a Group I
Trigger Event is in effect,
(A) to the Holders of the Class IA-1 Notes, the Group I
Principal Payment Amount for such Payment Date, until the Note Balance
of the Class IA-1 Notes has been reduced to zero;
(B) to the Holders of the Class IM-1 Notes, 100% of the
remaining Group I Principal Payment Amount for such Payment Date, until
the Note Balance of the Class IM-1 Notes has been reduced to zero;
(C) to the Holders of the Class IM-2 Notes, 100% of the
remaining Group I Principal Payment Amount, until the Note Balance of
the Class IM-2 Notes has been reduced to zero;
(D) to the Holders of the Class IB-1 Notes, 100% of the
remaining Group I Principal Payment Amount, until the Note Principal
Balance of the Class IB-1 Notes has been reduced to zero; and
(E) any amount of the Group I Principal Payment Amount
remaining after making all of the payments in clauses (A), (B), (C) and
(D) shall be applied as set forth under clause (I) of MONTHLY EXCESS
CASHFLOW PAYMENTS below.
(ii) on or after the Group I Stepdown Date and as long as a Group I
Trigger Event is not in effect:
13
(A) the lesser of (x) the Group I Principal Payment Amount and
(y) the Class IA-1 Principal Payment Amount, will be paid to the Class
IA-1 Notes until the Note Balance thereof has been reduced to zero;
(B) the lesser of (x) the excess of (i) the Group I Principal
Payment Amount over (ii) the amount paid to the Class IA-1 Notes in
clause (A) above and (y) the Class IM-1 Principal Payment Amount will
be paid to the Class IM-1 Notes, until the Note Balance thereof has
been reduced to zero;
(C) the lesser of (x) the excess of (i) the Group I Principal
Payment Amount over (ii) the sum of the amount paid to the Class IA-1
Notes in clause (A) above and the amount paid to the Class IM-1 Notes
in clause (B) above and (y) the Class IM-2 Principal Payment Amount
will be paid to the Class IM-2 Notes, until the Note Balance thereof
has been reduced to zero;
(D) the lesser of (x) the excess of (i) the Group I Principal
Payment Amount over (ii) the sum of the amount paid to the Class IA-1
Notes pursuant to clause (A) above, the amount paid to the Class IM-1
Notes pursuant to clause (B) above and the amount paid to the Class
IM-2 Notes pursuant to clause (C) above and (y) the Class IB-1
Principal Payment Amount will be paid to the Class IB-1 Notes, until
the Note Principal Balance thereof has been reduced to zero; and
(E) any amount of the Group I Principal Payment Amount
remaining after making all of the payments in clauses (A), (B), (C) and
(D) above shall be applied as set forth under clause (I) of MONTHLY
EXCESS CASHFLOW PAYMENTS below.
(II) On each Payment Date, the Indenture Trustee shall make the
following payments in the following order of priority (based upon the Group II
Mortgage Loan information provided to it in the Remittance Report), and the
calculations required to be made by the Indenture Trustee, to the extent of the
Group II Principal Payment Amount:
(i) before the Group II Stepdown Date or with respect to which a Group
II Trigger Event is in effect,
(A) to the Holders of the Class IIA-1 Notes, the Group II
Principal Payment Amount for such Payment Date, until the Note Balance
of the Class IIA-1 Notes has been reduced to zero;
(B) to the Holders of the Class IIM-1 Notes, 100% of the
remaining Group II Principal Payment Amount for such Payment Date,
until the Note Balance of the Class IM-1 Notes has been reduced to
zero;
(C) to the Holders of the Class IIM-2 Notes, 100% of the
remaining Group II Principal Payment Amount, until the Note Balance of
the Class IIM-2 Notes has been reduced to zero;
14
(D) to the Holders of the Class IIB-1 Notes, 100% of the
remaining Group II Principal Payment Amount, until the Note Balance of
the Class IIB-1 Notes has been reduced to zero; and
(E) any amount of the Group II Principal Payment Amount
remaining after making all of the payments in clauses (A), (B), (C) and
(D) shall be applied as set forth under clause (II) of MONTHLY EXCESS
CASHFLOW PAYMENTS below.
(ii) on or after the Group II Stepdown Date and as long as a Group II
Trigger Event is not in effect:
(A) the lesser of (x) the Group II Principal Payment Amount
and (y) the Class IIA- 1 Principal Payment Amount, will be paid to the
Class IIA-1 Notes until the Note Balance thereof has been reduced to
zero;
(B) the lesser of (x) the excess of (i) the Group II Principal
Payment Amount over (ii) the amount paid to the Class IIA-1 Notes in
clause (A) above and (y) the Class IIM-1 Principal Payment Amount will
be paid to the Class IIM-1 Notes, until the Note Balance thereof has
been reduced to zero;
(C) the lesser of (x) the excess of (i) the Group II Principal
Payment Amount over (ii) the sum of the amount paid to the Class IIA-1
Notes in clause (A) above and the amount paid to the Class IIM-1 Notes
in clause (B) above and (y) the Class IIM-2 Principal Payment Amount
will be paid to the Class IIM-2 Notes, until the Note Balance thereof
has been reduced to zero;
(D) the lesser of (x) the excess of (i) the Group II Principal
Payment Amount over (ii) the sum of the amount paid to the Class IIA-1
Notes pursuant to clause (A) above, the amount paid to the Class IIM-1
Notes pursuant to clause (B) above and the amount paid to the Class
IIM-2 Notes pursuant to clause (C) above and (y) the Class IIB-1
Principal Payment Amount will be paid to the Class IIB-1 Notes, until
the Note Principal Balance thereof has been reduced to zero; and
(E) any amount of the Group II Principal Payment Amount
remaining after making all of the payments in clauses (A), (B), (C) and
(D) above shall be applied as set forth under clause (II) of MONTHLY
EXCESS CASHFLOW PAYMENTS below.
MONTHLY EXCESS CASHFLOW PAYMENTS
(I) On each Payment Date, any Group I Monthly Excess Cashflow Amount
shall be paid to the Group I Notes, to the extent available, in the following
order of priority on such Payment Date:
(i) to pay any remaining unpaid Accrued Note Interest for such
Payment Date, PRO RATA, among the Class IA-IO and Class IA-1 Notes;
15
(ii) to pay any remaining Interest Carry Forward Amounts for
the Classes of Senior Notes, if any, PRO RATA, among the Class IA-IO
and the Class IA-1 Notes;
(iii) to pay the Class IA-1 Realized Loss Amortization Amount
for such Payment Date;
(iv) to pay the Group I Extra Principal Payment Amount for
such Payment Date in accordance with clause I(A) through (D) of
PRINCIPAL PAYMENTS above;
(v) to pay any remaining unpaid Accrued Note Interest for such
Payment Date for the Class IM-1 Notes;
(vi) to pay the Interest Carry Forward Amount for the Class
IM-1 Notes, if any;
(vii) to pay the Class IM-1 Realized Loss Amortization Amount
for such Payment Date;
(viii) to pay any remaining unpaid Accrued Note Interest for
such Payment Date for the Class IM-2 Notes;
(ix) to pay the Interest Carry Forward Amount for the Class
IM-2 Notes, if any;
(x) to pay the Class IM-2 Realized Loss Amortization Amount
for such Payment Date;
(xi) to pay any remaining unpaid Accrued Note Interest for
such Payment Date for the Class IB-1 Notes;
(xiii) to pay the Interest Carry Forward Amount for the Class
IB-1 Notes, if any;
(xiii) to pay the Class IB-1 Realized Loss Amortization Amount
for such Payment Date;
(xiv) to the Excess Reserve Fund Account from amounts
otherwise payable to the Class IX/N Interest, and then from the Excess
Reserve Fund Account to the Class IA-1 Notes and the Group I Mezzanine
Notes, sequentially, an amount equal to the related LIBOR Carryover
Amount for each such Class;
(xv) to the Excess Reserve Fund Account from amounts payable
to the Class IX/N Interest, an amount equal to the Required Excess
Reserve Fund Deposit;
(xvi) to pay the Special Servicing Fees for such Payment Date
and any accrued and unpaid Special Servicing Fees which remain unpaid
from any previous Payment Date;
(xvii) to the Class IN Notes, the Accrued Note Interest for
the Class IN Notes and any Interest Carry Forward Amount thereon unpaid
on prior Payment Dates;
16
(xviii) to pay the Class IX/N Realized Loss Amortization
Amount for such Payment Date;
(xix) from amounts payable to the Class IX/N Interest, any
remaining Group I Monthly Excess Cashflow Amount to reduce the Class IN
Notional Amount, until the Class IN Notional Amount has been reduced to
zero; and
(xx) to the Class IX Notes from amounts payable to the Class
IX/N Interest, the Class IX Distributable Amount for such Payment Date.
On each Payment Date, all prepayment premiums and penalties (including
amounts deposited by the Servicer in lieu thereof pursuant to Section 3.01 of
the Servicing Agreement) with respect to the Group I Mortgage Loans shall be
allocated to the Class IN Notes for so long as the Class IN Notional Amount is
greater than zero, and to the Class IX Notes after the Class IN Notional Amount
has been reduced to zero.
On each Payment Date, there shall be paid to the Holders of the Class R
Notes, in respect of the Class R-1 Interest, the Class R-2 Interest and the
Class R-3 Interest, any remaining amount in the Payment Account in respect of
the Group I Mortgage Loans on such date after the application of (i) through
(xx) above; except that any remaining amounts otherwise payable to the Class
IX/N Interest shall be paid to REMIC 4.
Any amounts paid to the Class IA-1 Notes and the Group I Mezzanine
Notes in respect of related XXXXX Xxxxxxxxx Amounts pursuant to (xiv) above
shall first be deemed paid by REMIC 4 to the Class IX/N Interest as a
distribution in respect of the Class IX/N Interest Note Rate, and then paid to
the Class IA-1 Notes and the Group I Mezzanine Notes, as applicable, as payments
on notional principal contracts in the nature of cap contracts.
Any amounts paid to the Class IN Notes pursuant to (xvii) through (xix)
above and to the Class IX Notes pursuant to (xx) above shall be considered
distributed to the Class IX/N Interest in respect of the Class IX/N Interest
Note Rate and then to the Class IN and Class IX Notes.
(II) On each Payment Date, any Group II Monthly Excess Cashflow Amount
shall be paid to the Group II Notes, to the extent available, in the following
order of priority on such Payment Date:
(i) to pay the Class IIA-1 Notes any remaining unpaid Accrued
Note Interest for such Payment Date;
(ii) to pay the Class IIA-1 Notes any remaining Interest Carry
Forward Amounts for the Class IIA-1 Notes, if any;
(iii) to pay the Class IIA-1 Realized Loss Amortization Amount
for such Payment Date;
17
(iv) to pay the Group II Extra Principal Payment Amount for
such Payment Date in accordance with clause II of PRINCIPAL PAYMENTS
above;
(v) to pay any remaining unpaid Accrued Note Interest for such
Payment Date for the Class IIM-1 Notes;
(vi) to pay the Interest Carry Forward Amount for the Class
IIM-1 Notes, if any;
(vii) to pay the Class IIM-1 Realized Loss Amortization Amount
for such Payment Date;
(viii) to pay any remaining unpaid Accrued Note Interest for
such Payment Date for the Class IIM-2 Notes;
(ix) to pay the Interest Carry Forward Amount for the Class
IIM-2 Notes, if any;
(x) to pay the Class IIM-2 Realized Loss Amortization Amount
for such Payment Date;
(xi) to pay any remaining unpaid Accrued Note Interest for
such Payment Date for the Class IIB-1 Notes;
(xii) to pay the Interest Carry Forward Amount for the Class
IIB-1 Notes, if any;
(xiii) to pay the Class IIB-1 Realized Loss Amortization
Amount for such Payment Date;
(xiv) to the Class IIA-1 Notes and the Group II Mezzanine
Notes, sequentially, an amount equal to the related LIBOR Carryover
Amount for each such Class;
(xv) to pay the Special Servicing Fees for such Payment Date
and any accrued and unpaid Special Servicing Fees which remain unpaid
from any previous Payment Date;
(xvi) to the Class IIN Notes, the Accrued Note Interest for
the Class IIN Notes and any Interest Carry Forward Amount thereon
unpaid on prior Payment Dates;
(xvii) any remaining Group II Monthly Excess Cashflow Amount
to reduce the Class IIN Notional Amount, until the Class IIN Notional
Amount has been reduced to zero; and
(xviii) to the Class IIX Notes, any remaining amounts.
On each Payment Date, all prepayment premiums and penalties (including
amounts deposited by the Servicer in lieu thereof pursuant to Section 3.01 of
the Servicing Agreement) with respect to the Group II Mortgage Loans shall be
allocated to the Class IIN Notes for so long as the Class IIN
18
Notional Amount is greater than zero, and to the Class IIX Notes after the Class
IIN Notional Amount has been reduced to zero.
On each Payment Date, the Indenture Trustee (in its capacity as
Certificate Paying Agent under the Trust Agreement) shall deposit in the
Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds in accordance with the
Trust Agreement.
The amounts paid to Noteholders shall be paid to the Notes in
accordance with the applicable percentage as set forth in paragraph (b) below.
Interest will accrue on the Notes (other than the Class IA-IO Notes) on the
basis of a 360-day year and the actual number of days in the related Interest
Accrual Period. Interest will accrue on the Class IA-IO Notes based on a 360-day
year consisting of twelve thirty day months.
Any installment of interest or principal, if any, payable on any Note
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall, if such Holder holds Notes of an aggregate initial Note
Balance or Notional Amount, as applicable, of at least $1,000,000, be paid to
each Holder of record on the preceding Record Date, by wire transfer to an
account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check or
money order to such Noteholder mailed to such Holder's address as it appears in
the Note Register the amount required to be paid to such Holder on such Payment
Date pursuant to such Holder's Notes; PROVIDED, HOWEVER, that the Indenture
Trustee shall not pay to such Holders any amount required to be withheld from a
payment to such Holder by the Code.
Each payment with respect to a Book-Entry Note shall be paid to the
Depository, as Holder thereof, and the Depository shall be responsible for
crediting the amount of such payment to the accounts of its Depository
Participants in accordance with its normal procedures. Each Depository
Participant shall be responsible for disbursing such payment to the Note Owners
that it represents and to each indirect participating brokerage firm (a
"brokerage firm" or "indirect participating firm") for which it acts as agent.
Each brokerage firm shall be responsible for disbursing funds to the Note Owners
that it represents. None of the Indenture Trustee, the Issuer, the Depositor,
the Owner Trustee, the or the Servicer shall have any responsibility therefor
except as otherwise provided by this Indenture or applicable law.
The rights of the Noteholders to receive payments in respect of the
Notes, and all interests of the Noteholders in such payments, shall be as set
forth in this Indenture. None of the Holders of any Class of Notes nor the
Indenture Trustee, the Issuer, the Depositor, the Owner Trustee, nor the
Servicer shall in any way be responsible or liable to the Holders of any other
Class of Notes in respect of amounts properly previously paid on the Notes.
The principal of each Note shall be due and payable in full on the
Final Maturity Date for such Note. All principal payments on the Notes shall be
made to the Noteholders entitled thereto in accordance with the Percentage
Interests represented by such Notes. Upon notice to the Indenture Trustee by the
Issuer, the Indenture Trustee shall notify the Person in whose name a Note is
registered at the close of business on the Record Date preceding the Final
Maturity Date or other
19
final Payment Date (including any final Payment Date resulting from any
termination pursuant to Section 8.07 hereof). Such notice shall to the extent
practicable be mailed no later than three Business Days prior to such Final
Maturity Date or other final Payment Date and shall specify that payment of the
principal amount and any interest due with respect to such Note at the Final
Maturity Date or other final Payment Date will be payable only upon presentation
and surrender of such Note and shall specify the place where such Note may be
presented and surrendered for such final payment. No interest shall accrue on
the Notes on or after the Final Maturity Date or any such other final Payment
Date.
Notwithstanding anything to the contrary herein, in no event shall the
Note Balance of any Class of Notes be reduced more than once in respect of any
particular amount both (a) allocated to such Note in respect of Realized Losses
pursuant to Section 3.06 and (b) paid to the Holder of such Note in reduction of
the Note Balance thereof pursuant to this Section 3.06 from Net Monthly Excess
Cashflow.
Section 3.06 ALLOCATION OF REALIZED LOSSES.
(i) All Realized Losses on the Group I Mortgage Loans shall be
allocated by the Indenture Trustee on each Payment Date as follows:
FIRST, to the Group I Monthly Excess Cashflow Amount;
SECOND, to the Group I Overcollateralization Amount, until the Group I
Overcollateralization Amount has been reduced to zero;
THIRD, to the Class IB-1 Notes, until the Note Balance thereof has been
reduced to zero;
FOURTH, to the Class IM-2 Notes, until the Note Balance thereof has
been reduced to zero; and
FIFTH, to the Class IM-1 Notes, until the Note Balance thereof has been
reduced to zero.
Special Hazard Losses will be allocated as described above, except that
if the aggregate amount of such losses, as of any date of determination, exceeds
the greatest of (i) 1.0% of the Principal Balance of the Group I Mortgage Loans
as of the Cut-off Date, (ii) two times the amount of the Principal Balance of
the largest Group I Mortgage Loan in Loan Group I as of the date of
determination and (iii) an amount equal to the current Principal Balances of the
Group I Mortgage Loans in the largest zip-code concentration in the State of
California as of the date of determination, such excess losses will be allocated
among all the outstanding classes, including the Class IX/N Interest, PRO RATA,
based on their respective Note Balances or Notional Amount, as applicable. Any
such reduction of a Note Balance or Notional Amount will not be reversed or
reinstated. However, on future Payment Dates, Noteholders of the related class
may receive amounts in respect of prior reductions in the related Note Balances
or Notional Amounts as described above in Section 3.05. Such subsequent payments
will be applied in the reverse of the order set forth above.
20
(ii) All Realized Losses on the Group II Mortgage Loans shall be
allocated by the Indenture Trustee on each Payment Date as follows:
FIRST, to the Group II Monthly Excess Cashflow Amount;
SECOND, to the Group II Overcollateralization Amount, until the Group
II Overcollateralization Amount has been reduced to zero;
THIRD, to the Class IIB-1 Notes, until the Note Balance thereof has
been reduced to zero;
FOURTH, to the Class IIM-2 Notes, until the Note Balance thereof has
been reduced to zero; and
FIFTH, to the Class IIM-1 Notes, until the Note Balance thereof has
been reduced to zero.
Section 3.07 EXCESS RESERVE FUND ACCOUNT.
(a) On the Closing Date, the Indenture Trustee shall establish and
maintain in its name, in trust for the benefit of the Holders of the Class IA-1
Notes and the Group I Mezzanine Notes, the Excess Reserve Fund Account. The
Excess Reserve Fund Account shall be an Eligible Account, and funds on deposit
therein shall be held separate and apart from, and shall not be commingled with,
any other moneys, including, without limitation, other moneys of the Indenture
Trustee held pursuant to this Indenture.
(b) On the Closing Date, $5,000 will be deposited by the Indenture
Trustee into the Excess Reserve Fund Account. Thereafter, on any Payment Date if
the Group I Pool Cap does not exceed the Note Rate applicable to the Class IA-1
Notes or the Group I Mezzanine Notes by at least 0.25%, the amount to be held in
the Excess Reserve Fund Account on any Payment Date thereafter will equal the
greater of (i) 0.50% of the outstanding Note Balance of the Class IA-1 Notes and
the Group I Mezzanine Notes as of such Payment Date and (ii) $5,000 and will be
funded from amounts paid pursuant to Section 3.06. Thereafter, if the Group I
Pool Cap for any Payment Date exceeds the Note Rate applicable to the Class IA-1
Notes and the Group I Mezzanine Notes on such Payment Date by 0.25% or more, the
Required Excess Reserve Fund Balance for such Payment Date will be at least
$5,000. The amount required to be on deposit in the Excess Reserve Fund Account
at any time is referred to herein as the "Required Excess Reserve Fund Balance."
In addition to the Required Excess Reserve Fund Balance, the amount on deposit
in the Excess Reserve Fund Account will be increased by any payments received by
the Indenture Trustee under the Cap Contract or the Cap Contract Pledge
Agreement and deposited into the Excess Reserve Fund Account.
(c) On each Payment Date on which there exists a related LIBOR
Carryover Amount on the Class IA-1 Notes or the Group I Mezzanine Notes, the
Indenture Trustee shall withdraw from the Excess Reserve Fund Account amounts
necessary to pay the related XXXXX Xxxxxxxxx Amount incurred by such Note, until
such amount is reduced to zero.
(d) Funds in the Excess Reserve Fund Account may be invested in
Permitted Investments by the Indenture Trustee at the direction of the Majority
Noteholders of the Class IX Notes. On each
21
Payment Date, any earnings on such amounts shall be paid to the Holders of the
Class IX Notes and any losses shall be chargeable to amounts held in the Excess
Reserve Fund Account. The Majority Noteholders of the Class IX Notes shall
evidence ownership of the Excess Reserve Fund Account for federal income tax
purposes and shall direct the Indenture Trustee, in writing, as to the
investment of amounts on deposit therein. Upon termination of Loan Group I, any
amounts remaining in the Excess Reserve Fund Account shall be paid to the
Holders of the Class IX Notes. The Excess Reserve Fund Account is not an asset
of any of the REMICs, but rather is an "outside reserve fund" within the meaning
of the REMIC Provisions that is beneficially owned by the beneficial owner of
the Class IX Notes.
Section 3.08 PROTECTION OF TRUST ESTATE. (a) The Issuer will from time
to time prepare, execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and will take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(ii) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(iii) cause the Issuer or the Servicer to enforce any of their
rights with respect to the Mortgage Loans; or
(iv) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee and the Noteholders in such Trust
Estate against the claims of all persons and parties.
(b) Except as otherwise provided in this Indenture, the Indenture
Trustee shall not remove any portion of the Trust Estate that consists of money
or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.09 (or from the jurisdiction in which it
was held as described in the Opinion of Counsel delivered at the Closing Date
pursuant to Section 3.07(a), if no Opinion of Counsel has yet been delivered
pursuant to Section 3.07(b)) unless the Trustee shall have first received an
Opinion of Counsel to the effect that the lien and security interest created by
this Indenture with respect to such property will continue to be maintained
after giving effect to such action or actions. The Issuer hereby designates the
Indenture Trustee its agent and attorney-in-fact to execute any financing
statement, continuation statement or other instrument required to be executed
pursuant to this Section 3.07 upon the Issuer's preparation thereof and delivery
to the Indenture Trustee.
Section 3.09 OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel at the expense of the Issuer either stating that, in the opinion of
such counsel, such action has been taken with respect to the recording and
filing of this Indenture, any indentures supplemental hereto, and any other
requisite documents, and with respect to the execution and filing of any
financing statements and continuation statements, as are necessary to perfect
and make effective the lien and first priority security interest
22
in the Collateral and reciting the details of such action, or stating that, in
the opinion of such counsel, no such action is necessary to make such lien and
first priority security interest effective.
(b) On or before December 31st in each calendar year, beginning in
2002, the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at
the expense of the Issuer either stating that, in the opinion of such counsel,
such action has been taken with respect to the recording, filing, re- recording
and refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and first priority security interest in the Collateral and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and first priority security interest.
Such Opinion of Counsel shall also describe the recording, filing, re-recording
and refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and first priority security interest in the Collateral
until December 31 in the following calendar year.
Section 3.10 PERFORMANCE OF OBLIGATIONS; SERVICING AGREEMENT. (a) The
Issuer will punctually perform and observe all of its obligations and agreements
contained in this Indenture, the Basic Documents and in the instruments and
agreements included in the Trust Estate.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer.
(c) The Issuer will not take any action or permit any action to be
taken by others which would release any Person from any of such Person's
covenants or obligations under any of the documents relating to the Mortgage
Loans or under any instrument included in the Trust Estate, or which would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any of the documents relating to
the Mortgage Loans or any such instrument, except such actions as the Servicer
is expressly permitted to take in the Servicing Agreement. The Indenture
Trustee, as pledgee of the Collateral, shall be able to exercise the rights of
the Issuer to direct actions of the Servicer pursuant to the Servicing
Agreement.
(d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.
Section 3.11 NEGATIVE COVENANTS. Except as specifically permitted in
this Indenture, so long as any Notes are Outstanding, the Issuer shall not:
(i) sell, transfer, exchange or otherwise dispose of the Trust
Estate, unless directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments
23
under the Code) or assert any claim against any present or former
Noteholder by reason of the payment of the taxes levied or assessed
upon any part of the Trust Estate;
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to be
amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be expressly
permitted hereby, permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof or any interest therein or
the proceeds thereof or (C) permit the lien of this Indenture not to
constitute a valid first priority security interest in the Trust
Estate; or
(iv) waive or impair, or fail to assert rights under the
Mortgage Loans, or impair or cause to be impaired the Mortgage Loans or
the Issuer's interest in the Mortgage Loans, the Mortgage Loan Purchase
Agreement or in any Basic Document, if any such action would materially
and adversely affect the interests of the Noteholders.
(v) dissolve or liquidate in whole or in part;
(vi) engage, directly or indirectly, in any business other
than that arising out of the issue of the Notes, and the actions
contemplated or required to be performed under this Indenture;
(vii) incur, create or assume any indebtedness for borrowed
money;
(viii) voluntarily file a petition for bankruptcy,
reorganization, assignment for the benefit of creditors or similar
proceeding; or
(ix) merge, convert or consolidate with any other Person.
Section 3.12 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver
to the Indenture Trustee, within 120 days after the end of each fiscal year of
the Issuer (commencing with the fiscal year 2001), an Officer's Certificate
stating, as to the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture and the Trust Agreement has
been made under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture and the provisions of the Trust
Agreement throughout such year, or, if there has been a default in its
compliance with any such condition or covenant, specifying each such
default known to such Authorized Officer and the nature and status
thereof.
24
Section 3.13 RESERVED.
Section 3.14 REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE
LOANS. The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit
of the representations and warranties made by the Seller in the Mortgage Loan
Purchase Agreement concerning the Mortgage Loans and the right to enforce the
remedies against the Seller provided in such Mortgage Loan Purchase Agreement to
the same extent as though such representations and warranties were made directly
to the Indenture Trustee. If the Indenture Trustee has actual knowledge of any
breach of any representation or warranty made by the Seller in the Mortgage Loan
Purchase Agreement, the Indenture Trustee shall promptly notify the Seller of
such finding and the Seller's obligation to cure such breach or repurchase or
substitute for the related Mortgage Loan.
Section 3.15 AMENDMENTS TO SERVICING AGREEMENT. The Issuer covenants
with the Indenture Trustee that it will not enter into any amendment or
supplement to the Servicing Agreement without the prior written consent of the
Indenture Trustee. The Indenture Trustee, as pledgee of the Mortgage Loans, may
decline to enter into or consent to any such supplement or amendment if the
Noteholders' rights, duties or immunities would be materially and adversely
affected thereby. The Indenture Trustee may, but shall not be obligated to,
enter into any amendment or supplement to the Servicing Agreement that affects
the Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
Section 3.16 SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by any Servicer, the Issuer and the Indenture Trustee
hereby acknowledge that such Servicer is acting as agent and bailee of the
Indenture Trustee in holding amounts on deposit in the related Collection
Account, as well as its agent and bailee in holding any Related Documents
released to such Servicer, and any other items constituting a part of the Trust
Estate which from time to time come into the possession of such Servicer. It is
intended that, by each Servicer's acceptance of such agency, the Indenture
Trustee, as a secured party of the Mortgage Loans, will be deemed to have
possession of such Related Documents, such monies and such other items for
purposes of Section 9-305 of the Uniform Commercial Code of the state in which
such property is held by the related Servicer.
Section 3.17 INVESTMENT COMPANY ACT. The Issuer shall not become an
"investment company" or "controlled by" an investment company as such terms are
defined in the Investment Company Act of 1940, as amended (or any successor or
amendatory statute), and the rules and regulations thereunder (taking into
account not only the general definition of the term "investment company" but
also any available exceptions to such general definition); PROVIDED, HOWEVER,
that the Issuer shall be in compliance with this Section 3.15 if it shall have
obtained an order exempting it from regulation as an "investment company" so
long as it is in compliance with the conditions imposed in such order.
Section 3.18 RESERVED.
Section 3.19 SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.17(i), the Person formed by or
surviving such consolidation or merger
25
(if other than the Issuer) shall succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture with the same
effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of all the assets and properties of
the Issuer pursuant to Section 3.17(ii), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Notes immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer.
Section 3.20 NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, purchasing, owning and selling and managing the
Mortgage Loans and the issuance of the Notes and Certificates in the manner
contemplated by this Indenture and the Basic Documents and all activities
incidental thereto.
Section 3.21 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
Section 3.22 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by this Indenture or the Basic Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stock, obligations, assets or securities of, or
any other interest in, or make any capital contribution to, any other Person.
Section 3.23 CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long- term or operating lease or otherwise) for capital assets
(either realty or personalty).
Section 3.24 RESERVED.
Section 3.25 RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any payment (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer, (ii) redeem, purchase, retire or otherwise acquire for value any
such ownership or equity interest or security or (iii) set aside or otherwise
segregate any amounts for any such purpose; PROVIDED, HOWEVER, that the Issuer
may make, or cause to be made, (x) distributions to the Owner Trustee and the
Certificateholders as contemplated by, and to the extent funds are available for
such purpose under the Trust Agreement, and (y) payments to the Servicer
pursuant to the terms of the Servicing Agreement. The Issuer will not, directly
or indirectly, make payments to or payments from the Collection Account except
in accordance with this Indenture and the Basic Documents.
Section 3.26 NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and under the Trust Agreement.
26
Section 3.27 FURTHER INSTRUMENTS AND ACTS. Upon request of the
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be reasonably necessary or proper to carry out
more effectively the purpose of this Indenture.
Section 3.28 STATEMENTS TO NOTEHOLDERS. On each Payment Date, the
Indenture Trustee and the Certificate Registrar shall forward by mail or
otherwise make available electronically to each Noteholder and
Certificateholder, respectively, the statement prepared pursuant to Section 7.05
of this Indenture. The Indenture Trustee shall have no responsibility to (i)
verify information provided by any Servicer to be included in such statement or
(ii) include any information required to be included in such statement if such
Servicer has failed to timely produce such information to the Indenture Trustee
as required pursuant to the related Servicing Agreement.
Section 3.29 CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE.
(a) With the Collateral, the Issuer represents to the Indenture Trustee
that:
(i) This Indenture creates a valid and continuing security
interest (as defined in the applicable UCC) in the Collateral in favor of the
Indenture Trustee, which security interest is prior to all other liens, and is
enforceable as such as against creditors of and purchasers from the Issuer.
(ii) The Collateral described under clause (i) of the
definition of Collateral constitutes "instruments" within the meaning of the
applicable UCC, the Collateral described under clauses (iii), (v), (vi), (vii)
and (viii) constitute "general intangibles" within the meaning of the applicable
UCC and the Collateral described under clause (iv) of the definition of
Collateral constitutes "proceeds" within the meaning of the applicable UCC.
(iii) The Issuer owns and has good and marketable title to the
Collateral, free and clear of any lien, claim or encumbrance of any Person.
(iv) The Issuer has taken all steps necessary to cause the
Indenture Trustee to become the account holder of the Collateral.
(v) Other than the security interest granted to the Indenture
Trustee pursuant to this Indenture, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Collateral. The
Issuer has not authorized the filing of, and is not aware of any financing
statements against, the Issuer, that include a description of collateral
covering the Collateral, other than any financing statement relating to the
security interest granted to the Indenture Trustee hereunder or that has been
terminated. The Issuer is not aware of any judgment or tax lien filings against
the Issuer.
(vi) The Collateral is not in the name of any Person other
than the Issuer or the Indenture Trustee. The Issuer has not consented to the
bank maintaining the Collateral to comply with instructions of any Person other
than the Indenture Trustee.
27
(b) The foregoing representations may not be waived and shall survive
the issuance of the Bonds.
28
ARTICLE IV
THE NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section 4.01 THE NOTES. The Notes will be substantially in the forms
annexed hereto as Exhibits A-1 through A-15. The Notes of each Class will be
issuable in registered form only, in denominations of authorized Percentage
Interests as described in the definition thereof. Each Note will share ratably
in all rights of the related Class.
The Notes shall, on original issue, be executed on behalf of the Issuer
by the Owner Trustee, not in its individual capacity but solely as Owner
Trustee, authenticated by the Indenture Trustee and delivered by the Indenture
Trustee to or upon the order of the Issuer.
The Indenture Trustee may for all purposes (including the making of
payments due on the Notes) deal with the Depository as the authorized
representative of the Note Owners with respect to the Notes for the purposes of
exercising the rights of Noteholders hereunder. The rights of Note Owners with
respect to the Notes shall be limited to those established by law and agreements
between such Note Owners and the Depository Participants and brokerage firms
representing such Note Owners. Multiple requests and directions from, and votes
of, the Depository as Holder of the Notes with respect to any particular matter
shall not be deemed inconsistent if they are made with respect to different Note
Owners. The Indenture Trustee may establish a reasonable record date in
connection with solicitations of consents from or voting by Noteholders and
shall give notice to the Depository of such record date.
In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each Note
Owner shall be entitled to notes representing the Notes it beneficially owns in
the manner prescribed in Section 4.08.
Section 4.02 REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
OF NOTES; APPOINTMENT OF NOTE REGISTRAR.
The Issuer shall cause to be kept at the Indenture Trustee's Corporate
Trust Office a Note Register in which, subject to such reasonable regulations as
it may prescribe, the Note Registrar shall provide for the registration of Notes
and of transfers and exchanges of Notes as herein provided.
Subject to the restrictions and limitations set forth below, upon
surrender for registration of transfer of any Note at the Corporate Trust
Office, the Issuer shall execute and the Note Registrar shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Notes in authorized initial Note Balances or Notional Amounts, as
applicable, evidencing the same aggregate Percentage Interests.
Subject to the foregoing, at the option of the Noteholders, Notes may
be exchanged for other Notes of like tenor, in authorized initial Note Balances
or Notional Amounts, as applicable, evidencing the same aggregate Percentage
Interests upon surrender of the Notes to be exchanged at
29
the Corporate Trust Office of the Note Registrar. Whenever any Notes are so
surrendered for exchange, the Issuer shall execute and the Note Registrar shall
authenticate and deliver the Notes which the Noteholder making the exchange is
entitled to receive. Each Note presented or surrendered for registration of
transfer or exchange shall (if so required by the Note Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer in form
reasonably satisfactory to the Note Registrar duly executed by, the Holder
thereof or his attorney duly authorized in writing with such signature
guaranteed by a commercial bank or trust company located or having a
correspondent located in the City of New York or the city in which the Corporate
Trust Office is located. Notes delivered upon any such transfer or exchange will
evidence the same obligations, and will be entitled to the same rights and
privileges, as the Notes surrendered.
Except with respect to the initial transfer of the Private Notes by the
Depositor, no transfer, sale, pledge or other disposition of any Private Note
shall be made unless such disposition is exempt from the registration
requirements of the 1933 Act, and any applicable state securities laws or is
made in accordance with the 1933 Act and laws. In the event of any such
transfer, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Indenture Trustee, in
substantially the form attached hereto as Exhibit D) under the 1933 Act, the
Indenture Trustee and the Issuer shall require a written Opinion of Counsel
(which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Indenture Trustee and the Issuer that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuer or (ii) the Indenture Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached hereto
as Exhibit F) and the transferee to execute an investment letter (in
substantially the form attached hereto as Exhibit D) acceptable to and in form
and substance reasonably satisfactory to the Issuer and the Indenture Trustee
certifying to the Issuer and the Indenture Trustee the facts surrounding such
transfer, which investment letter shall not be an expense of the Indenture
Trustee or the Issuer. The Holder of a Private Note that is also a Class R or
Class R-4 Note desiring to effect a transfer of a such Class R or Class R-4 Note
shall not make such transfer to a Non-U.S. Person. The Holder of any Private
Note desiring to effect a transfer shall, and does hereby agree to, indemnify
the Indenture Trustee and the Issuer against any liability that may result if
the transfer is not so exempt or is not made in accordance with such federal and
state laws.
No transfer of an ERISA-Restricted Note shall be made unless the
Indenture Trustee shall have received a representation from the transferee of
such Note, acceptable to and in form and substance satisfactory to the Indenture
Trustee and the Issuer, (such requirement is satisfied only by the Indenture
Trustee's receipt of a representation letter from the transferee substantially
in the form of Exhibit C hereto, as appropriate), to the effect that such
transferee is not an employee benefit plan or arrangement subject to Section 406
of ERISA or a plan subject to Section 4975 of the Code, nor a person acting on
behalf of any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer. For purposes of the preceding sentence,
such representation shall be deemed to have been made to the Indenture Trustee
by the acceptance by a Note Owner of the beneficial interest in any such Class
of ERISA-Restricted Notes, unless the Indenture Trustee shall have received from
the transferee an alternative representation acceptable in form and substance to
the Issuer and the Indenture Trustee. Notwithstanding anything else to the
contrary herein, any
30
purported transfer of an ERISA-Restricted Note to or on behalf of an employee
benefit plan subject to ERISA or to the Code shall be void and of no effect.
By acquiring an Offered Note, each purchaser will be deemed to
represent that either (1) it is not acquiring the Offered Note with the assets
of a benefit plan; or (2) the acquisition and holding of the Offered Note will
not give rise to a nonexempt prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code as a result of the Issuer, the Depositor, the
Underwriters, the Owner Trustee, the Indenture Trustee, the Servicer, any
Administrator, any provider of credit support, including the Cap Contract
counterparty, any owner of the Certificates, or any of their Affiliates being a
party in interest or disqualified person with respect to such purchaser that is
a benefit plan.
Each Person who has or who acquires any Ownership Interest in a Class R
or Class R-4 Note shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Issuer or its designee as its attorney-in-fact to
negotiate the terms of any mandatory sale under clause (v) below and to execute
all instruments of transfer and to do all other things necessary in connection
with any such sale, and the rights of each Person acquiring any Ownership
Interest in a Class R or Class R-4 Note are expressly subject to the following
provisions:
(i) Each Person holding or acquiring any Ownership Interest in
a Class R or Class R-4 Note shall be a Permitted Transferee and shall
promptly notify the Indenture Trustee of any change or impending change
in its status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Class
R or Class R-4 Note unless such Ownership Interest is a pro rata
undivided interest.
(iii) In connection with any proposed transfer of any
Ownership Interest in a Class R or Class R-4 Note, the Indenture
Trustee shall as a condition to registration of the transfer, require
delivery to it, in form and substance satisfactory to it, of each of
the following:
A. an affidavit in the form of Exhibit E hereto from
the proposed transferee to the effect that, among other
things, such transferee is a Permitted Transferee and that it
is not acquiring its Ownership Interest in the Class R or
Class R-4 Note that is the subject of the proposed transfer as
a nominee, trustee or agent for any Person who is not a
Permitted Transferee; and
B. a covenant of the proposed transferee to the
effect that the proposed transferee agrees to be bound by and
to abide by the transfer restrictions applicable to the Class
R or Class R-4 Notes.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Class R or Class R-4 Note in violation of the provisions
of this Section shall be absolutely null and void and shall vest no
rights in the purported transferee. If any purported transferee shall,
in violation of the provisions of this Section, become a Holder of a
Class R or Class R-4 Note, then the prior Holder of such Class R or
Class R-4 Note that is a Permitted Transferee
31
shall, upon discovery that the registration of transfer of such Class R
or Class R-4 Note was not in fact permitted by this Section, be
restored to all rights as Holder thereof retroactive to the date of
registration of transfer of such Class R or Class R-4 Note. The
Indenture Trustee shall be under no liability to any Person for any
registration of transfer of a Class R or Class R-4 Note that is in fact
not permitted by this Section or for making any payments due on such
Class R or Class R-4 Note to the Holder thereof or taking any other
action with respect to such Holder under the provisions of this
Indenture so long as the Indenture Trustee received the documents
specified in clause (iii). The Indenture Trustee shall be entitled to
recover from any Holder of a Class R or Class R-4 Note that was in fact
not a Permitted Transferee at the time such distributions were made all
payments made on such Class R or Class R-4 Note. Any such payments so
recovered by the Indenture Trustee shall be paid and delivered by the
Indenture Trustee to the prior Holder of such Class R or Class R-4 Note
that is a Permitted Transferee.
(v) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class R or Class R-4 Note in violation of
the restrictions in this Section, then the Indenture Trustee shall have
the right but not the obligation, without notice to the Holder of such
Class R or Class R-4 Note or any other Person having an Ownership
Interest therein, to notify the Issuer to arrange for the sale of such
Class R or Class R-4 Note. The proceeds of such sale, net of
commissions (which may include commissions payable to the Issuer or its
affiliates in connection with such sale), expenses and taxes due, if
any, will be remitted by the Indenture Trustee to the previous Holder
of such Class R or Class R-4 Note that is a Permitted Transferee,
except that in the event that the Indenture Trustee determines that the
Holder of such Class R or Class R-4 Note may be liable for any amount
due under this Section or any other provisions of this Indenture, the
Indenture Trustee may withhold a corresponding amount from such
remittance as security for such claim. The terms and conditions of any
sale under this clause (v) shall be determined in the sole discretion
of the Indenture Trustee and it shall not be liable to any Person
having an Ownership Interest in a Class R or Class R-4 Note as a result
of its exercise of such discretion.
(vi) If any Person other than a Permitted Transferee acquires
any Ownership Interest in a Class R or Class R-4 Note in violation of
the restrictions in this Section, then the Indenture Trustee will
provide to the Internal Revenue Service, and to the persons specified
in Sections 860E(e)(3) and (6) of the Code, information needed to
compute the tax imposed under Section 860E(e)(5) of the Code on
transfers of residual interests to disqualified organizations. The
Indenture Trustee shall be entitled to reasonable compensation for
providing such information from the person to whom it is provided.
The foregoing provisions of this Section shall cease to apply to
transfers occurring on or after the date on which there shall have been
delivered to the Indenture Trustee, in form and substance satisfactory to the
Indenture Trustee, (i) written notification from each Rating Agency that the
removal of the restrictions on transfer set forth in this Section will not cause
such Rating Agency to downgrade its rating of the Notes and (ii) an Opinion of
Counsel to the effect that such removal will not cause any REMIC hereunder to
fail to qualify as a REMIC.
32
No service charge shall be imposed for any registration of transfer or
exchange of Notes, but the Note Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
All Notes surrendered for registration of transfer and exchange shall
be cancelled by the Note Registrar and delivered to the Indenture Trustee for
subsequent destruction without liability on the part of either.
The Issuer hereby appoints the Indenture Trustee as Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement. The Indenture Trustee hereby accepts such
appointment.
Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8- 405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; PROVIDED, HOWEVER, that if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Note, the Issuer may pay such destroyed, lost or stolen Note when so
due or payable without surrender thereof. If, after the delivery of such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Note in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 4.03, the
Issuer may require the payment by the Holder of such Note of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section 4.03 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder. The
provisions of this Section 4.03 are exclusive and
33
shall preclude (to the extent lawful) all other rights and remedies with respect
to the replacement or payment of mutilated, destroyed, lost or stolen Notes.
The provisions of this Section 4.03 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 4.04 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
Section 4.05 CANCELLATION. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section 4.05, except as expressly
permitted by this Indenture. All cancelled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Request that they be destroyed or returned to it; provided however, that such
Issuer Request is timely and the Notes have not been previously disposed of by
the Indenture Trustee.
Section 4.06 BOOK-ENTRY NOTES. Each Class of Notes (other than the
Class IX, Class IN, Class R, Class R-4, Class IIX and Class IIN) shall initially
be issued as one or more Notes held by the Book-Entry Custodian or, if appointed
to hold such Notes as provided below, the Depository Trust Company, the initial
Depository, and registered in the name of its nominee Cede & Co. Except as
provided below, registration of such Notes may not be transferred by the
Indenture Trustee except to another Depository that agrees to hold such Notes
for the respective Beneficial Owners. The Indenture Trustee is hereby initially
appointed as the Book-Entry Custodian and hereby agrees to act as such in
accordance herewith and in accordance with the agreement that it has with the
Depository authorizing it to act as such. The Book-Entry Custodian may, and, if
it is no longer qualified to act as such, the Book-Entry Custodian shall,
appoint, by a written instrument delivered to the Depositor, the Servicer and,
if the Indenture Trustee is not the Book-Entry Custodian, the Indenture Trustee,
any other transfer agent (including the Depository or any successor Depository)
to act as Book-Entry Custodian under such conditions as the predecessor
Book-Entry Custodian and the Depository or any successor Depository may
prescribe, provided that the predecessor Book-Entry Custodian shall not be
relieved of any of its duties or responsibilities by reason of any new
appointment, except if the Depository is the successor to the Book-Entry
Custodian. If the Indenture Trustee resigns or is removed in accordance with the
terms hereof, the successor trustee or, if it so elects, the Depository shall
immediately succeed to its predecessor's duties as Book-Entry Custodian. The
Depositor shall
34
have the right to inspect, and to obtain copies of, any Notes held as Book-Entry
Notes by the Book- Entry Custodian. No Beneficial Owner will receive a
Definitive Note representing such Beneficial Owner's interest in such Note,
except as provided in Section 4.08. Unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to Beneficial Owners
pursuant to Section 4.08:
(i) the provisions of this Section 4.06 shall be in full force
and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Depository for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and
the giving of instructions or directions hereunder) as the sole holder
of the Notes, and shall have no obligation to the Owners of Notes;
(iii) to the extent that the provisions of this Section 4.06
conflict with any other provisions of this Indenture, the provisions of
this Section 4.06 shall control;
(iv) the rights of Beneficial Owners shall be exercised only
through the Depository and shall be limited to those established by law
and agreements between such Owners of Notes and the Depository and/or
the Depository Participants. Unless and until Definitive Notes are
issued pursuant to Section 4.08, the initial Depository will make
book-entry transfers among the Depository Participants and receive and
transmit payments of principal of and interest on the Notes to such
Depository Participants; and
(v) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the aggregate Note Balance or
Notional Amount, as applicable, of the Notes, the Depository shall be
deemed to represent such percentage only to the extent that it has
received instructions to such effect from Beneficial Owners and/or
Depository Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and has
delivered such instructions to the Indenture Trustee.
Section 4.07 NOTICES TO DEPOSITORY. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
4.08, the Indenture Trustee shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Depository, and
shall have no obligation to the Note Owners.
Section 4.08 DEFINITIVE NOTES. If (i) the Indenture Trustee determines
that the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Notes and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Note Owners of Notes representing beneficial interests
aggregating at least a majority of the aggregate Note Balance or Notional
Amount, as applicable, of the Notes advise the Depository in writing that the
continuation of a book-entry system through the Depository is no longer in the
best interests of the Note Owners, then the Indenture Trustee shall notify all
Note Owners through the Depository of the occurrence of any such event and of
the availability of Definitive Notes to Note
35
Owners requesting the same. Upon surrender to the Indenture Trustee of the
typewritten Notes representing the Book-Entry Notes by the Book-Entry Custodian
or the Depository, as applicable, accompanied by registration instructions, the
Issuer shall execute and the Indenture Trustee shall authenticate the Definitive
Notes in accordance with the instructions of the Depository. None of the Issuer,
the Note Registrar or the Indenture Trustee shall be liable for any delay in
delivery of such instructions and may conclusively rely on, and shall be
protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.
Section 4.09 TAX TREATMENT. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for federal, state and
local income, single business and franchise tax purposes, the Notes will qualify
as indebtedness. For federal income tax purposes, the Group I Notes and the
Class IX/N Interest will be treated as regular interests in a REMIC. The
Indenture Trustee shall make or cause to be made REMIC elections for each of
REMIC 1, REMIC 2, REMIC 3 and REMIC 4 as set forth in Article X on Forms 1066 or
other appropriate federal tax or information return for the taxable year ending
on the last day of the calendar year in which the Notes are issued. The Issuer,
by entering into this Indenture, and each Noteholder, by its acceptance of its
Note (and each Beneficial Owner by its acceptance of an interest in the
applicable Book-Entry Note), agree to treat the Notes (other than the Class IX
Notes and the Class IIX Notes when held separately from the Class IN Notes and
the Class IIN Notes, respectively) for federal, state and local income, single
business and franchise tax purposes as indebtedness of the related REMIC, in the
case of the Group I Mortgage Loans (except that the Class IN Notes shall be
treated as indebtedness of the Holders of the Class IX Notes when held
separately from the Class IN Notes) and the Issuer in the case of the Group II
Mortgage Loans.
Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture
shall cease to be of further effect with respect to the Notes except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi)
the rights of Noteholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Notes and shall release and deliver the Collateral to or
upon the order of the Issuer, when
(A) either
(1) the Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 4.03 hereof and (ii) Notes
for whose payment money has theretofore been deposited in trust or
segregated and held in trust by the Issuer and thereafter repaid to the
Issuer or discharged from such trust, as provided in Section 3.03) have
been delivered to the Indenture Trustee for cancellation; or
36
(2) the Notes not theretofore delivered to the Indenture
Trustee for cancellation
a. have become due and payable,
b. will become due and payable at the Final Insured
Payment Date within one year, or
c. have been declared immediately due and payable
pursuant to Section 8.07.
and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Notes then outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the Final Maturity Date or other final Payment Date
and has delivered to the Indenture Trustee a verification report from a
nationally recognized accounting firm certifying that the amounts deposited with
the Indenture Trustee are sufficient to pay and discharge the entire
indebtedness of such Notes, or, in the case of c. above, the Issuer shall have
complied with all requirements of Section 8.07 hereof;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate and an Opinion of Counsel, each meeting the
applicable requirements of Section 10.01 and each stating that all
conditions precedent herein provided for relating to the satisfaction
and discharge of this Indenture have been complied with and, if the
Opinion of Counsel relates to a deposit made in connection with Section
4.10(A)(2)b. above, such opinion shall further be to the effect that
such deposit will not have any material adverse tax consequences to the
Issuer, any Noteholders or any Certificateholders.
Section 4.11 APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Paying Agent or the
Issuer or Certificate Paying Agent, as designee of the Issuer, as applicable, as
the Indenture Trustee may determine, to the Holders of Notes, of all sums due
and to become due thereon for principal and interest or otherwise; but such
monies need not be segregated from other funds except to the extent required
herein or required by law.
Section 4.12 REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Person shall be released from all further
liability with respect to such monies.
37
Section 4.13 TEMPORARY NOTES. Pending the preparation of any Definitive
Notes, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Notes that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Notes in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Notes may
determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer will cause Definitive Notes
to be prepared without unreasonable delay. After the preparation of the
Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes
upon surrender of the temporary Notes at the office or agency of the Indenture
Trustee, without charge to the Holder. Upon surrender for cancellation of any
one or more temporary Notes, the Issuer shall execute and the Indenture Trustee
shall authenticate and make available for delivery, in exchange therefor,
Definitive Notes of authorized denominations and of like tenor and aggregate
principal amount. Until so exchanged, such temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as Definitive Notes.
38
ARTICLE V
DEFAULT AND REMEDIES
Section 5.01 EVENTS OF DEFAULT. The Issuer shall deliver to the
Indenture Trustee within five days after learning of the occurrence any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii) of the definition of "Event of Default" written
notice in the form of an Officer's Certificate of its status and what action the
Issuer is taking or proposes to take with respect thereto.
Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee may, and, at the written direction of the Holders of Notes
with a majority of the Voting Rights, shall, declare the Notes to be immediately
due and payable, by a notice in writing to the Issuer (and to the Indenture
Trustee if given by Noteholders), and upon any such declaration (a) 100% of the
aggregate Note Balance then outstanding, (b) the aggregate of any Allocated
Realized Loss Amount (plus accrued interest through the date of acceleration) on
the Notes remaining unpaid immediately prior to such date of acceleration, (c)
accrued and unpaid interest thereon through the date of acceleration and (d) the
aggregate of any Interest Carry Forward Amounts (plus accrued interest through
the date of acceleration) remaining unpaid immediately prior to such date of
acceleration.
At any time after such declaration of acceleration of maturity with
respect to an Event of Default has been made and before a judgment or decree for
payment of the money due has been obtained by the Indenture Trustee as
hereinafter in this Article V provided, the Holders of Notes representing a
majority of the aggregate Note Balance of all Notes, by written notice to the
Issuer and the Indenture Trustee may in writing waive the related Event of
Default and rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on the Notes and
all other amounts that would then be due hereunder or upon the Notes if
the Event of Default giving rise to such acceleration had not occurred;
and
(B) all sums reasonably paid or advanced by the Indenture
Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its agents and
counsel; and
(ii) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.
39
(a) The Issuer covenants that if (i) default is made in the payment of
any interest (including the Accrued Note Interest) on any Note when the same
becomes due and payable, and such default continues for a period of five days,
or (ii) default is made in the payment of the principal (including the Group I
Principal Payment Amount or Group II Principal Payment Amount, as applicable,
and the Group I Overcollateralization Increase Amount or the Group II
Overcollateralization Increase Amount, as applicable) of or any installment of
the principal of any Note when the same becomes due and payable, the Issuer
shall, upon demand of the Indenture Trustee pay to the Indenture Trustee, for
the benefit of the Holders of Notes, the whole amount then due and payable on
the Notes for principal and interest, with interest at the Note Accrual Rate
upon the overdue principal, and in addition thereto such further amount as shall
be sufficient to cover the reasonable costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon
such demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 11.17 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Notes and collect in the manner provided by
law out of the property of the Issuer or other obligor upon the Notes, wherever
situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy or legal or
equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Notes, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Notes shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Indenture Trustee (including any
claim for reasonable compensation to the Indenture Trustee and each
40
predecessor Indenture Trustee, and their respective agents, attorneys
and counsel, and for reimbursement of all reasonable expenses and
liabilities incurred, and all advances made, by the Indenture Trustee
and each predecessor Indenture Trustee, except as a result of
negligence, willful misconduct or bad faith) and of the Noteholders
allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or Person performing similar functions in any such
Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee or the Holders of Notes allowed in any
judicial proceedings relative to the Issuer, its creditors and its
property;
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Noteholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by the Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the reasonable
expenses, disbursements and compensation of the Indenture Trustee, each
predecessor Indenture Trustee and their respective agents and attorneys, shall
be for the ratable benefit of the Holders of the Notes.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Notes, and it shall not be necessary to
make any Noteholder a party to any such Proceedings.
Section 5.04 REMEDIES; PRIORITIES. (a) If an Event of Default shall
have occurred and be continuing and if an acceleration has been declared and not
rescinded pursuant to Section 5.02 hereof, the Indenture Trustee may do one or
more of the following (subject to Section 5.05 hereof):
(i) institute Proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, and all amounts payable under the Insurance
41
Agreement, enforce any judgment obtained, and collect from the Issuer
and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of the Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, the Indenture Trustee may not sell or otherwise liquidate the
Trust Estate following an Event of Default, unless (1) the Holders of 100% of
the then aggregate outstanding Voting Rights consent to such sale, (2) the
proceeds of such sale or liquidation distributable to the Holders of the Notes
are sufficient to discharge in full all amounts then due and unpaid upon the
Notes for principal and interest or (3) the Indenture Trustee determines that
the Mortgage Loans will not continue to provide sufficient funds for the payment
of principal of and interest on the Notes as they would have become due if the
Notes had not been declared due and payable, and the Indenture Trustee obtains
the consent of the Holders of 66 2/3% of the then aggregate outstanding Voting
Rights. In determining such sufficiency or insufficiency with respect to clause
(B) and (C), the Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
(I) With respect to the Group I Mortgage Loans and Group I Notes:
FIRST, to the Indenture Trustee, the Owner Trustee, the Servicer for
amounts due under Section 6.07 hereof;
SECOND, to the Servicer, any amounts required to pay the Servicing Fees
then due and to reimburse the Servicer for Advances previously made by, and not
previously reimbursed or retained, the Servicer and, upon the final liquidation
of the related Mortgage Loan or the final liquidation of the Trust Estate,
Servicing Advances previously made by, and not previously reimbursed or retained
by, the Servicer and to the Indenture Trustee reimbursement for any advances
relating to Stayed Funds;
THIRD, to the Holders of the Class IA-1 Notes, for payment of the
Accrued Note Interest allocable to such Notes, if any, then due and unpaid
through the day preceding the date on which such payment was made;
42
FOURTH, to the Holders of the Class IM-1 Notes, for payment of the
Accrued Note Interest allocable to such Notes, if any due and unpaid through the
day preceding the date on which such payment was made;
FIFTH, to the Holders of the Class IM-2 Notes, for payment of the
Accrued Note Interest allocable to such Notes, if any due and unpaid through the
day preceding the date on which such payment was made;
SIXTH, to the Holders of the Class IB-1 Notes, for payment of the
Accrued Note Interest allocable to such Notes, if any due and unpaid through the
day preceding the date on which such payment was made;
SEVENTH, to the Holders of the Class IA-1 Notes, until the Note Balance
of such Class has been reduced to zero;
EIGHTH, to the Holders of the Class IM-1 Notes, until the Note Balance
of such Class has been reduced to zero;
NINTH, to the Holders of the Class IM-2 Notes, until the Note Balance
of such Class has been reduced to zero;
TENTH, to the Holders of the Class IB-1 Notes, until the Note Balance
of such Class has been reduced to zero;
ELEVENTH, to the Holders of the Class IA-1 Notes, an amount equal to
the Interest Carry Forward Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
TWELFTH, to the Holders of the Class IM-1 Notes, an amount equal to the
Interest Carry Forward Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
THIRTEENTH, to the Holders of the Class IM-1 Notes, an amount equal to
the Allocated Realized Loss Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
FOURTEENTH, to the Holders of the Class IM-2 Notes, an amount equal to
the Interest Carry Forward Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
FIFTEENTH, to the Holders of the Class IM-2 Notes, an amount equal to
the Allocated Realized Loss Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
43
SIXTEENTH, to the Holders of the Class IB-1 Notes, an amount equal to
the Interest Carry Forward Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
SEVENTEENTH, to the Holders of the Class IB-1 Notes, an amount equal to
the Allocated Realized Loss Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes; and
EIGHTEENTH, any remaining amount, to the Issuer or the Certificate
Paying Agent as its designee, on behalf of the Certificateholders.
(II) With respect to the Group II Mortgage Loans and Group II Notes
FIRST, to the Indenture Trustee, the Owner Trustee, the Servicer for
amounts due under Section 6.07 hereof;
SECOND, to the Servicer, any amounts required to pay the Servicing Fees
then due and to reimburse the Servicers of Advances previously made by, and not
previously reimbursed or retained, the Servicer and, upon the final liquidation
of the related Mortgage Loan or the final liquidation of the Trust Estate,
Servicing Advances previously made by, and not previously reimbursed or retained
by, the Servicer and to the Indenture Trustee reimbursement for any advances
relating to Stayed Funds;
THIRD, to the Holders of the Class IIA-1 Notes, for payment of the
Accrued Note Interest allocable to such Notes, if any, then due and unpaid
through the day preceding the date on which such payment was made;
FOURTH, to the Holders of the Class IIM-1 Notes, for payment of the
Accrued Note Interest allocable to such Notes, if any due and unpaid through the
day preceding the date on which such payment was made;
FIFTH, to the Holders of the Class IIM-2 Notes, for payment of the
Accrued Note Interest allocable to such Notes, if any due and unpaid through the
day preceding the date on which such payment was made;
SIXTH, to the Holders of the Class IIB-1 Notes, for payment of the
Accrued Note Interest allocable to such Notes, if any due and unpaid through the
day preceding the date on which such payment was made;
SEVENTH, to the Holders of the Class IIA-1 Notes, until the Note
Balance of such Class has been reduced to zero;
EIGHTH, to the Holders of the Class IIM-1 Notes, until the Note Balance
of such Class has been reduced to zero;
44
NINTH, to the Holders of the Class IIM-2 Notes, until the Note Balance
of such Class has been reduced to zero;
TENTH, to the Holders of the Class IIB-1 Notes, until the Note Balance
of such Class has been reduced to zero;
ELEVENTH, to the Holders of the Class IIA-1 Notes, an amount equal to
the Interest Carry Forward Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
TWELFTH, to the Holders of the Class IIM-1 Notes, an amount equal to
the Interest Carry Forward Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
THIRTEENTH, to the Holders of the Class IIM-1 Notes, an amount equal to
the Allocated Realized Loss Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
FOURTEENTH, to the Holders of the Class IIM-2 Notes, an amount equal to
the Interest Carry Forward Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
FIFTEENTH, to the Holders of the Class IIM-2 Notes, an amount equal to
the Allocated Realized Loss Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
SIXTEENTH, to the Holders of the Class IIB-1 Notes, an amount equal to
the Interest Carry Forward Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes;
SEVENTEENTH, to the Holders of the Class IIB-1 Notes, an amount equal
to the Allocated Realized Loss Amount (plus accrued interest through the date of
acceleration) allocable to such Class of Notes; and
EIGHTEENTH, any remaining amount, to the Issuer or the Certificate
Paying Agent as its designee, on behalf of the Certificateholders.
The Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Noteholder a notice
that states the record date, the payment date and the amount to be paid.
Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Notes
have been declared to be due and payable under Section 5.02 following an Event
of Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may elect to take and maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Noteholders that
45
there be at all times sufficient funds for the payment of principal of and
interest on the Notes and other obligations of the Issuer, and the Indenture
Trustee shall take such desire into account when determining whether or not to
take and maintain possession of the Trust Estate. In determining whether to take
and maintain possession of the Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.
Section 5.06 LIMITATION OF SUITS. No Holder of any Note shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 11.17 hereof:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Event of Default;
(ii) the Holders of not less than 25% of the aggregate Note
Balance of the Notes have made written request to the Indenture Trustee
to institute such Proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee reasonable indemnity against the costs, expenses and
liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute
such Proceedings; and
(v) no direction inconsistent with such written request has
been given to the Indenture Trustee during such 60-day period by the
Holders of a majority of the aggregate Note Balance of the Notes.
It is understood and intended that no one or more Holders of Notes
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or preference
over any other Holders or to enforce any right under this Indenture, except in
the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the aggregate Note Balance of the
Notes, the Indenture Trustee in its sole discretion may determine what action,
if any, shall be taken, notwithstanding any other provisions of this Indenture.
Section 5.07 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture and
46
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
Section 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their respective
former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee and the Noteholders shall continue as though no such
Proceeding had been instituted.
Section 5.09 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of
the Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as
the case may be.
Section 5.11 CONTROL BY NOTEHOLDERS. The Holders of Notes with a
majority of the Voting Rights shall have the right (subject to the provisions of
Section 5.06) to direct the time, method and place of conducting any Proceeding
for any remedy available to the Indenture Trustee with respect to the Notes or
exercising any trust or power conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of
law or with this Indenture;
(ii) any direction to the Indenture Trustee to sell or
liquidate the Trust Estate shall be at the written direction of the
Holders of Notes with a majority of the Voting Rights as provided in
Section 5.15;
(iii) if the conditions set forth in Section 5.05 hereof have
been satisfied and the Indenture Trustee elects to retain the Trust
Estate pursuant to such Section, then any direction to the Indenture
Trustee by the Holders of Notes with a majority of the Voting Rights to
sell or liquidate the Trust Estate shall be of no force and effect.
Notwithstanding the rights of Noteholders set forth in this Section,
subject to Section 6.01, the Indenture Trustee need not take any action that it
determines might involve it in liability or, might materially adversely affect
the rights of any Noteholders not consenting to such action.
47
Section 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.02 hereof,
the Holders of Notes with a majority of the Voting Rights may waive any past
Event of Default and its consequences except an Event of Default (i) with
respect to payment of principal of or interest on any of the Notes or (ii) in
respect of a covenant or provision hereof which cannot be modified or amended
without the consent of the Holder of each Note affected. In the case of any such
waiver, the Issuer, the Indenture Trustee and the Holders of the Notes shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other Event of Default or impair
any right consequent thereto.
Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.
Section 5.13 UNDERTAKING FOR COSTS. All parties to this Indenture
agree, and each Holder of any Note by such Xxxxxx's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the Note
Balance of the Most Senior Class of Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on any
Note on or after the respective due dates expressed in such Note and in this
Indenture.
Section 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to
the extent that it may lawfully do so) that it will not at any time insist upon,
or plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted to the
Indenture Trustee, but will suffer and permit the execution of every such power
as though no such law had been enacted.
Section 5.15 SALE OF TRUST ESTATE. (a) The power to effect any sale,
liquidation or other disposition (a "Sale") of any portion of the Trust Estate
pursuant to Section 5.04 is expressly subject to the provisions of Section 5.05
and this Section 5.15. The power to effect any such Sale shall not be exhausted
by any one or more Sales as to any portion of the Trust Estate remaining unsold,
but shall continue unimpaired until the entire Trust Estate shall have been sold
or all amounts payable on the Notes and under this Indenture and under the
Insurance Agreement shall have been paid. The Indenture Trustee may from time to
time postpone any public Sale by public announcement made at the time and place
of such Sale. The Indenture Trustee hereby expressly waives its right to any
amount fixed by law as compensation for any Sale.
48
(b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless:
(a) the Holders of Notes with a majority of the Voting Rights
consent to or direct the Indenture Trustee to make, such Sale, or
(b) the proceeds of such Sale would be not less than the
entire amount which would be payable to the Noteholders under the Notes, in full
payment thereof in accordance with Section 5.02 hereof, on the Payment Date next
succeeding the date of such Sale, or
(c) The Indenture Trustee determines that the conditions for
retention of the Trust Estate set forth in Section 5.05 hereof cannot be
satisfied (in making any such determination, the Indenture Trustee may rely upon
an opinion of an Independent investment banking firm obtained and delivered as
provided in Section 5.05 hereof), and the Holders of Notes with a majority of
the Voting Rights consent to such Sale.
The purchase by the Indenture Trustee of all or any portion of the
Trust Estate at a private Sale shall not be deemed a Sale or other disposition
thereof for purposes of this Section 5.15(b).
(c) Unless the Holders of Notes with a majority of the Voting Rights
have otherwise consented or directed the Indenture Trustee, at any public Sale
of all or any portion of the Trust Estate at which a minimum bid equal to or
greater than the amount described in paragraph (2) of subsection (b) of this
Section 5.15 has not been established by the Indenture Trustee and no Person
bids an amount equal to or greater than such amount, the Indenture Trustee shall
bid an amount at least $1.00 more than the highest other bid.
(iv) In connection with a Sale of all or any portion of the Trust
Estate,
(a) any Holder or Holders of Notes may bid for and purchase
the property offered for Sale, and upon compliance with the terms of sale may
hold, retain and possess and dispose of such property, without further
accountability, and may, in paying the purchase money therefor, deliver any
Notes or claims for interest thereon in lieu of cash up to the amount which
shall, upon distribution of the net proceeds of such sale, be payable thereon,
and such Notes, in case the amounts so payable thereon shall be less than the
amount due thereon, shall be returned to the Holders thereof after being
appropriately stamped to show such partial payment;
(b) the Indenture Trustee may bid for and acquire the property
offered for Sale in connection with any Sale thereof, and, subject to any
requirements of, and to the extent permitted by, applicable law in connection
therewith, may purchase all or any portion of the Trust Estate in a private
sale, and, in lieu of paying cash therefor, may make settlement for the purchase
price by crediting the gross Sale price against the sum of (A) the amount which
would be payable to the Holders of the Notes and Holders of the Certificates and
(B) the reasonable expenses of the Sale and of any Proceedings in connection
therewith which are reimbursable to it, without being required to produce the
Notes in order to complete any such Sale or in order for the net Sale price to
be credited
49
against such Notes, and any property so acquired by the Indenture Trustee shall
be held and dealt with by it in accordance with the provisions of this
Indenture;
(c) the Indenture Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any portion of
the Trust Estate in connection with a Sale thereof;
(d) the Indenture Trustee is hereby irrevocably appointed the
agent and attorney- in-fact of the Issuer to transfer and convey its interest in
any portion of the Trust Estate in connection with a Sale thereof, and to take
all action necessary to effect such Sale; and
(e) no purchaser or transferee at such a Sale shall be bound
to ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any monies.
Section 5.16 ACTION ON NOTES. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Noteholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b).
Section 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a written request from the Indenture Trustee to do so, the
Issuer, in its capacity as holder of the Mortgage Loans, shall take all such
lawful action as the Indenture Trustee may request to cause the Issuer to compel
or secure the performance and observance by the Seller and the Servicer, as
applicable, of each of their obligations to the Issuer under or in connection
with the Mortgage Loan Purchase Agreement and the Servicing Agreement, and to
exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Mortgage Loan Purchase Agreement
and the Servicing Agreement to the extent and in the manner directed by the
Indenture Trustee, as pledgee of the Mortgage Loans, including the transmission
of notices of default on the part of the Seller or the Servicer thereunder and
the institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicer of each of their obligations
under the Mortgage Loan Purchase Agreement and the Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the
Indenture Trustee, as pledgee of the Mortgage Loans may, and at the direction
(which direction shall be in writing or by telephone (confirmed in writing
promptly thereafter)) of the Holders of 66-2/3% of the aggregate Note Balance of
the Notes shall, exercise all rights, remedies, powers, privileges and claims of
the Issuer against the Seller or the Servicer under or in connection with the
Mortgage Loan Purchase Agreement and the Servicing Agreement, including the
right or power to take any action to compel or secure performance or observance
by the Seller or the Servicer, as the case may be, of each of their obligations
to the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension or waiver under the Mortgage Loan Purchase Agreement and the
Servicing Agreement, as the case may be, and any right of the Issuer to take
such action shall not be suspended. In
50
connection therewith, as determined by the Indenture Trustee, the Issuer shall
take all actions necessary to effect the transfer of the Mortgage Loans to the
Indenture Trustee.
51
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01 DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default
has occurred and is continuing, the Indenture Trustee shall exercise the rights
and powers vested in it by this Indenture and use the same degree of care and
skill in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into this
Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Indenture Trustee and conforming to the
requirements of this Indenture; however, the Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability for its
own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section 6.01;
(ii) the Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer unless it is
proved that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect
to any action it takes or omits to take in good faith in accordance
with a direction received by it pursuant to Section 5.11.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee
to expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
52
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
(h) The Indenture Trustee shall act in accordance with Sections 6.03
and 6.04 of the Servicing Agreements and shall act as successor to any of the
Servicer in accordance with Section 6.02 of the related Servicing Agreement.
(i) For all purposes under this Indenture, the Indenture Trustee shall
not be deemed to have notice or knowledge of any Default or Event of Default
unless a Responsible Officer assigned to and working in the Indenture Trustee's
corporate trust department has actual knowledge thereof or unless written notice
of any event which is in fact such an Event of Default or Default is received by
the Indenture Trustee at the Corporate Trust Office, and such notice references
the Notes generally, the Issuer, the Trust Estate or this Indenture.
The Indenture Trustee is hereby authorized to execute and shall execute
the Servicing Agreement and shall perform its duties and satisfy its obligations
thereunder. Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall apply to the Indenture Trustee's execution of the Servicing Agreements and
the performance of its duties and satisfaction of its obligations thereunder.
The Issuer hereby instructs the Indenture Trustee to enter into the Cap
Contract and the Cap Contract Pledge Agreement and shall perform its duties and
satisfy its obligations thereunder. Every provision of this Indenture relating
to the conduct or affecting the liability of or affording protection to the
Indenture Trustee shall apply to the Indenture Trustee's execution of the Cap
Contract and the Cap Contract Pledge Agreement, and the performance of its
duties and satisfaction of its obligations thereunder.
Section 6.02 RIGHTS OF INDENTURE TRUSTEE.
(a) The Indenture Trustee may rely on any document believed by it to be
genuine and to have been signed or presented by the proper person. The Indenture
Trustee need not investigate any fact or matter stated in the document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel reasonably
satisfactory in form and substance to the Indenture Trustee, which Officer's
Certificate or Opinion of Counsel shall not be at the expense of the Indenture
Trustee or the Trust Estate. The Indenture Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on an Officer's
Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
53
(d) The Indenture Trustee shall not be liable for any action it takes
or omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel chosen by it with
due care, and the advice or opinion of counsel with respect to legal matters
relating to this Indenture and the Notes shall be full and complete
authorization and protection from liability in respect to any action taken,
omitted or suffered by it hereunder in good faith and in accordance with the
advice or opinion of such counsel.
Section 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture
Trustee in its individual or any other capacity may become the owner or pledgee
of Notes and may otherwise deal with the Issuer or its Affiliates with the same
rights it would have if it were not Indenture Trustee. Any Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However, the
Indenture Trustee must comply with Sections 6.11 and 6.12.
Section 6.04 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee
shall not be (i) responsible for and makes no representation as to the validity
or adequacy of this Indenture or the Notes, (ii) accountable for the Issuer's
use of the proceeds from the Notes or (iii) responsible for any statement of the
Issuer in the Indenture or in any document issued in connection with the sale of
the Notes or in the Notes other than the Indenture Trustee's certificate of
authentication.
Section 6.05 NOTICE OF EVENT OF DEFAULT. If an Event of Default occurs
and is continuing and if it is known to a Responsible Officer of the Indenture
Trustee, the Indenture Trustee shall give notice thereof to the Noteholders. The
Indenture Trustee shall mail to each Noteholder notice of the Event of Default
within 10 days after a Responsible Officer of the Indenture Trustee has actual
knowledge thereof unless such Event of Default shall have been waived or cured.
Except in the case of an Event of Default in payment of principal of or interest
on any Note, the Indenture Trustee may withhold the notice if and so long as a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the interests of Noteholders.
Section 6.06 RESERVED.
Section 6.07 COMPENSATION AND INDEMNITY. The Indenture Trustee shall
withdraw from the Payment Account and pay the following amounts without
priority: (i) on each Payment Date, the Indenture Trustee Fee to itself, (ii) on
each Payment Date, the fee payable to the PMI Insurer and (iii) on each Payment
Date in November, the fee payable to the Owner Trustee. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. In addition, the Indenture Trustee shall withdraw from the
Payment Account to reimburse the Owner Trustee for all reasonable out-of pocket
expenses incurred or made by it for all services rendered by it in its execution
of the trust created under the Trust Agreement and in the exercise and
performance of any of its powers and duties under the Trust Agreement (including
rights to indemnification) and shall reimburse itself for all reasonable
out-of-pocket expenses incurred or made by it, including costs of collection.
Such expenses shall include reasonable compensation and expenses, disbursements
and advances of the Indenture Trustee's agents, counsel, accountants and
experts. The Issuer shall indemnify the Indenture Trustee against any and all
loss, liability or expense
54
(including reasonable attorneys' fees) incurred by it in connection with the
administration of this Trust Estate and the performance of its duties hereunder.
The Indenture Trustee shall notify the Issuer promptly of any claim for which it
may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer
shall not relieve the Issuer of its obligations hereunder. The Issuer shall
defend any such claim, and the Indenture Trustee may have separate counsel and
the Issuer shall pay the reasonable fees and expenses of such counsel. The
Issuer is not obligated to reimburse any expense or indemnify against any loss,
liability or expense incurred by the Indenture Trustee through the Indenture
Trustee's own willful misconduct, negligence or bad faith. It is understood by
the parties hereto that a "claim" as used in this paragraph includes any claim
for indemnification made by the Custodian under the Custodial Agreement.
The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.07 shall survive the discharge of this Indenture. When the
Indenture Trustee incurs expenses after the occurrence of an Event of Default
with respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or state bankruptcy, insolvency or similar law.
Section 6.08 REPLACEMENT OF INDENTURE TRUSTEE. No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture
Trustee shall become effective until the acceptance of appointment by the
successor Indenture Trustee pursuant to this Section 6.08. The Indenture Trustee
may resign at any time by so notifying the Issuer. The Holders of a majority of
the aggregate Note Balance of the Notes may remove the Indenture Trustee by so
notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
The Issuer shall remove the Indenture Trustee if:
(i) the Indenture Trustee fails to comply with Section 6.11;
(ii) the Indenture Trustee is adjudged a bankrupt or
insolvent;
(iii) a receiver or other public officer takes charge of the
Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists
in the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee. In addition, the
Indenture Trustee will resign to avoid being directly or indirectly controlled
by the Issuer.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Noteholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee
55
(other than any Mortgage Files at the time held by the Custodian, which shall
become the agent of any successor indenture trustee hereunder).
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority of the aggregate Note
Balance of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the Indenture Trustee and the appointment of a successor Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.
Section 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall
provide the Issuer and the Rating Agencies with prior written notice of any such
transaction after the Closing Date.
If at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture and any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Noteholders, such title to the Trust Estate, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08 hereof.
56
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed upon
and exercised or performed by the Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
Indenture 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 Indenture 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 Estate or
any portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder; and
(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee, its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Indenture on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
Section 6.11 ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall
at all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of A or better by Xxxxx'x. The Indenture
Trustee shall comply with TIA ss. 310(b), including the optional provision
permitted by the second sentence of TIA ss. 310(b)(9); PROVIDED, HOWEVER, that
there shall be excluded from the operation of TIA ss. 310(b)(1) any indenture or
indentures under which other securities of the Issuer are outstanding if the
requirements for such exclusion set forth in TIA ss. 310(b)(1) are met. If at
any time the Indenture
57
Trustee shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect specified
in Section 6.08 hereof.
Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
Section 6.13 REPRESENTATIONS AND WARRANTIES. The Indenture Trustee
hereby represents that:
(i) The Indenture Trustee is duly organized and validly
existing as a national banking association in good standing under the
laws of the United States with power and authority to own its
properties and to conduct its business as such properties are currently
owned and such business is presently conducted.
(ii) The Indenture Trustee has the power and authority to
execute and deliver this Indenture and to carry out its terms; and the
execution, delivery and performance of this Indenture have been duly
authorized by the Indenture Trustee by all necessary corporate action.
(iii) The consummation of the transactions contemplated by
this Indenture and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under,
the articles of organization or bylaws of the Indenture Trustee or any
agreement or other instrument to which the Indenture Trustee is a party
or by which it is bound.
(iv) To the Indenture Trustee'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 Indenture Trustee or its
properties: (A) asserting the invalidity of this Indenture (B) seeking
to prevent the consummation of any of the transactions contemplated by
this Indenture or (C) seeking any determination or ruling that might
materially and adversely affect the performance by the Indenture
Trustee of its obligations under, or the validity or enforceability of,
this Indenture.
(v) The Indenture Trustee does not have notice of any adverse
claim (as such terms are used in Delaware UCC Section 8-302) with
respect to the Mortgage Loans.
Section 6.14 DIRECTIONS TO INDENTURE TRUSTEE. The Indenture Trustee is
hereby directed:
(a) to accept the pledge of the Mortgage Loans and hold the assets of
the Trust in trust for the Noteholders;
(b) to authenticate and deliver the Notes substantially in the form
prescribed by Exhibits A-1 through A-15 in accordance with the terms of this
Indenture;
(c) to take all other actions as shall be required to be taken by the
terms of this Indenture; and
58
(d) to enter into the Cap Contract and the Cap Contract Pledge
Agreement.
Section 6.15 INDENTURE TRUSTEE MAY OWN NOTES. The Indenture Trustee, in
its individual or any other capacity may become the owner or pledgee of Notes
with the same rights it would have if it were not Indenture Trustee.
Section 6.16 THE AGENTS. The provisions of this Indenture relating to
the limitations of the Indenture Trustee's liability and to its indemnity shall
inure also to the Paying Agent, the Note Registrar, the Certificate Paying Agent
and the Certificate Registrar.
Section 6.17 APPOINTMENT OF CUSTODIAN. The Indenture Trustee may, with
the consent of the Issuer, appoint the Custodian to hold all or a portion of the
Mortgage Files as agent for the Indenture Trustee, by entering into the
Custodial Agreement. The appointment of the Custodian may at any time be
terminated and a substitute Custodian appointed therefor upon the reasonable
request of the Servicer to the Indenture Trustee, the consent to which shall not
be unreasonably withheld. The Indenture Trustee initially appoints The Bank of
New York as Custodian, and the Issuer consents to such appointment. Subject to
Article VI hereof, the Indenture Trustee agrees to comply with the terms of the
Custodial Agreement and to enforce the terms and provisions thereof against the
Custodian for the benefit of the Noteholders having an interest in any Mortgage
File held by the Custodian. The Custodian shall be a depository institution or
trust company subject to supervision by federal or state authority, shall have
combined capital and surplus of at least $10,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Mortgage File. The
Custodial Agreement may be amended only as provided in the Custodial Agreement.
In no event shall the appointment of the Custodian pursuant to the Custodial
Agreement diminish the obligations of the Indenture Trustee hereunder.
59
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
NOTEHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Notes as of such Record Date and, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; PROVIDED, HOWEVER,
that so long as the Indenture Trustee is the Note Registrar, no such list shall
be required to be furnished.
Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO
NOTEHOLDERS. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Holders of Notes
contained in the most recent list furnished to the Indenture Trustee as provided
in Section 7.01 and the names and addresses of Holders of Notes received by the
Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may
destroy any list furnished to it as provided in such Section 7.01 upon receipt
of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA ss. 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIAss.312(c).
Section 7.03 REPORTS BY ISSUER.
(a) The Indenture Trustee shall:
(i) Within 15 days after each Payment Date, the Indenture
Trustee shall file with the Commission via the Electronic Data
Gathering and Retrieval System, a Form 8-K with a copy of the statement
to Noteholders for such Payment Date as an exhibit thereto. Prior to
January 30, 2003, the Indenture Trustee shall file a Form 15 Suspension
Notification with respect to the Trust Estate, if applicable. Prior to
March 30, 2003, the Indenture Trustee shall file a Form 10-K, in
substance conforming to industry standards, with respect to the Trust
Estate. The Issuer hereby grants to the Indenture Trustee a limited
power of attorney to execute and file each such document on behalf of
the Issuer. Such power of attorney shall continue until the earlier of
(i) receipt by the Indenture Trustee from the Issuer of written
termination of such power of attorney and (ii) the termination of the
Trust Estate. At least three Business Days prior to filing any Form 8-K
or Form 10-K pursuant to this Section 7.03, the Indenture Trustee shall
deliver a copy of such Form 8-K or Form 10-K, as the case may be, to
the Issuer and the Depositor. The Depositor agrees to promptly furnish
to the Indenture Trustee, from time to time upon request, such further
information, reports and financial statements within its control
related to this Indenture and the Mortgage Loans as the
60
Indenture Trustee reasonably deems appropriate to prepare and file all
necessary reports with the Commission.
(ii) use its best efforts to file with the Depositor and the
Commission in accordance with rules and regulations prescribed from
time to time by the Commission such additional information, documents
and reports with respect to compliance by the Issuer with the
conditions and covenants of this Indenture as may be required from time
to time by such rules and regulations; and
(iii) supply to the Depositor (and the Indenture Trustee shall
transmit by mail to all Noteholders described in TIA ss. 313(c)) such
summaries of any information, documents and reports required to be
filed by the Issuer pursuant to clauses (i) and (ii) of this Section
7.03(a) and by rules and regulations prescribed from time to time by
the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the
Issuer shall end on December 31 of each year.
(c) The Issuer hereby agrees to furnish such information and otherwise
cooperate with the Indenture Trustee as necessary for the Indenture Trustee to
perform its duties as provided in this Section 7.03.
(d) The Indenture Trustee may conclusively rely upon any information
provided by the Servicer or the Depositor in its preparation of the foregoing
reports pursuant to this Section 7.03.
Section 7.04 REPORTS BY INDENTURE TRUSTEE.
If required by TIA ss. 313(a), within 60 days after each January 1
beginning with January 1, 2002, the Indenture Trustee shall mail to each
Noteholder as required by TIA ss. 313(c) a brief report dated as of such date
that complies with TIA ss. 313(a). The Indenture Trustee also shall comply with
TIA ss. 313(b). A copy of each report at the time of its mailing to Noteholders
shall be filed by the Indenture Trustee with the Commission and each stock
exchange, if any, on which the Notes are listed. The Issuer shall notify the
Indenture Trustee if and when the Notes are listed on any stock exchange.
Section 7.05 STATEMENTS TO NOTEHOLDERS. Subject to Section 3.28 of this
Indenture, with respect to each Payment Date, the Indenture Trustee shall
deliver to each Certificateholder and Noteholder, the Issuer, the Depositor, the
Owner Trustee, the Certificate Paying Agent and each Rating Agency a statement
setting forth the following information as to the Notes, to the extent
applicable:
(i) the amount of the payment made on such Payment Date to the
Holders of each Class of Notes allocable to principal or reduction of
the Class IN Notional Amount or Class IIN Notional Amount, separately
identified;
61
(ii) the amount of the payment made on such Payment Date to
the Holders of each Class of Notes allocable to interest, Class IX
Distributable Amount or Class IIX Distributable Amount, separately
identified;
(iii)(A) the Group I Overcollateralization Amount, the Group I
Overcollateralization Release Amount, the Group I Overcollateralization
Deficiency and the Group I Overcollateralization Target Amount as of
such Payment Date and the Group I Monthly Excess Interest Amount and
Group I Monthly Excess Cashflow Amount for such Payment Date and (B)
the Group II Overcollateralization Amount, the Group II
Overcollateralization Release Amount, the Group II
Overcollateralization Deficiency and the Group II Overcollateralization
Target Amount as of such Payment Date and the Group II Monthly Excess
Interest Amount and Group II Monthly Excess Cashflow Amount for such
Payment Date ;
(iv) the aggregate amount of servicing compensation received
by the Servicer during the related Collection Period and accrued and
unpaid Special Servicing Fees;
(v) the aggregate amount of Advances for the related
Collection Period;
(vi) the Principal Balance of the Group I Mortgage Loans and
the Principal Balance of the Group II Mortgage Loans, in each case, at
the close of business at the end of the related Collection Period;
(vii) the number, weighted average remaining term to maturity
and weighted average Mortgage Rate of the Mortgage Loans as of the
related Due Date;
(viii) the number and aggregate unpaid principal balance of
Mortgage Loans (a) 30 to 59 days past due on a contractual basis, (b)
60 to 89 days past due on a contractual basis, (c) 90 or more days past
due on a contractual basis, (d) as to which foreclosure proceedings
have been commenced and (e) in bankruptcy as of the close of business
on the last day of the calendar month preceding such Payment Date;
(ix) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of such
Mortgage Loan, the unpaid principal balance and the Principal Balance
of such Mortgage Loan as of the date it became an REO Property;
(x) the book value of any REO Property as of the close of
business on the last Business Day of the calendar month preceding the
Payment Date, and, cumulatively, the total number and cumulative
principal balance of all REO Properties as of the close of business of
the last day of the preceding Collection Period;
(xi) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
62
(xii) the aggregate amount of prepayment penalties collected
or deposits by the Servicer in lieu thereof pursuant to Section 3.01 of
the Servicing Agreement during the related Collection Period and the
amounts thereof allocable to the Class IN Notes, the Class IIN Notes,
the Class IX Notes and the Class IIX Notes;
(xiii) the aggregate amount of Realized Losses for each Loan
Group incurred during the related Collection Period and the cumulative
amount of Realized Losses;
(xiv) the Note Balance, or Notional Amount, as applicable, of
each Class of Notes, after giving effect to the payments, and
allocations of Realized Losses or Applied Realized Loss Amounts, as
applicable, made on such Payment Date, separately identifying any
reduction thereof due to allocations of Realized Losses or Applied
Realized Loss Amounts;
(xv) the beginning balance of amounts on deposit in the Excess
Reserve Fund as of the preceding Payment Date, any withdrawals from and
deposits into the Excess Reserve Fund as of the Payment Date, and the
ending balance of amounts on deposit in the Excess Reserve Fund on such
Payment Date;
(xvi) [Reserved];
(xvii) the Accrued Note Interest in respect of each Class of
Notes for such Payment Date, separately identifying the portions
thereof attributable to Rate Payments, and the respective portions
thereof, if any, remaining unpaid following the payments made in
respect of such Notes on such Payment Date;
(xviii) the aggregate amount of any Prepayment Interest
Shortfalls for each Loan Group for such Payment Date, to the extent not
covered by payments by the Servicer pursuant to Section 3.23;
(xix) [Reserved];
(xx) with respect to each Loan Group, the Principal Balance of
the Re-performing 60+ Day Delinquent Loans;
(xxi) the amount of the Trustee Fee paid;
(xxii) XXXXX Xxxxxxxxx Amounts for the Class IA-1 Notes, Group
I Mezzanine Notes and Group II Notes paid on such Payment Date and the
amounts remaining after giving effect to payments thereof on such
Payment Date;
(xxiii) any Group I Overcollateralization Deficiency or Group
II Overcollateralization Deficiency, in each case, after giving effect
to the payment of principal on such Payment Date;
(xxiv) whether a Group I Trigger Event or Group II Trigger
Event has occurred and is continuing, and the cumulative Realized
Losses for each Loan Group, as a percentage of
63
the original Principal Balance of the Group I Mortgage Loans or Group
II Mortgage Loans, as applicable;
(xxv) the Available Funds for each Loan Group;
(xxvi) the rate at which interest accrues for each Class of
Notes for such Payment Date;
(xxvii) the Liquidation Report for each Loan Group for such
Payment Date;
(xxviii) [Reserved]
(xxix) the aggregate Principal Balance of Mortgage Loans
purchased by the Servicer or Seller during the related Collection
Period and indicating the Section of the Servicing Agreement or
Mortgage Loan Purchase Agreement requiring or allowing the purchase of
each such Mortgage Loan; and
(xxx) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Servicer during the related Collection Period in
connection with Section 3.16 of the Servicing Agreement.
The Indenture Trustee may fully rely upon and shall have no
liability with respect to information with respect to the Mortgage Loans
provided to it by the Servicer in accordance with Section 4.01 of the Servicing
Agreement.
In the case of information furnished pursuant to subclauses
(i) through (iii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Cut-Off Date.
Section 7.06 BOOKS AND RECORDS. The Issuer hereby covenants with the
Indenture Trustee that, so long as any of the Notes remain Outstanding, it
shall:
(a) at all times cause to be kept proper books of account and allow the
Indenture Trustee and any person appointed by it, to whom the Issuer shall have
no reasonable objection, access to the books of account of the Issuer at all
reasonable times, on reasonable prior notice and during normal business hours;
(b) at all times conduct and continue to conduct business in its own
corporate name;
(c) at all times act and continue to act through its duly authorized
officers and agents; and
(d) so far as permitted by law, at all times cause to be given to the
Indenture Trustee such information as it shall reasonably require for the
purpose of the discharge of the duties, powers, trusts, authorities and
discretions vested in it by this Indenture or by operation of law.
64
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01 COLLECTION OF MONEY. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02 TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Noteholders and the Certificate
Paying Agent, on behalf of the Certificateholders, the Payment Account as
provided in Section 3.01 of this Indenture.
(b) All monies deposited from time to time in the Payment Account
pursuant to the Servicing Agreement and all deposits therein pursuant to this
Indenture are for the benefit of the Noteholders and the Certificate Paying
Agent, on behalf of the Certificateholders and all investments made with such
monies including all income or other gain from such investments are for the
benefit of the Indenture Trustee.
On each Payment Date, the Indenture Trustee shall pay all amounts on
deposit in the Payment Account to Noteholders in respect of the Notes and in its
capacity as Certificate Paying Agent to Certificateholders in the order of
priority set forth in Section 3.05 (except as otherwise provided in Section
5.04(b)).
The Indenture Trustee may invest any funds in the Payment Account in
Permitted Investments, in its discretion, maturing no later than the Business
Day preceding each Payment Date (provided, however, that with respect to
Permitted Investments that consist of obligations of the Indenture Trustee or
its Affiliates, such Permitted Investments may mature on the related Payment
Date) and such Permitted Investments shall not be sold or disposed of prior to
their maturity. All income or other gain from such investments may be released
from the Payment Account and paid to the Indenture Trustee from time to time as
part of its compensation for acting as Indenture Trustee.
Section 8.03 OFFICER'S CERTIFICATE. The Indenture Trustee shall receive
at least seven days notice when requested by the Issuer to take any action
pursuant to Section 8.05(a), accompanied by copies of any instruments to be
executed, and the Indenture Trustee shall also require, as a condition to such
action, an Officer's Certificate, in form and substance reasonably satisfactory
to the Indenture Trustee, stating the legal effect of any such action, outlining
the steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with.
65
Section 8.04 TERMINATION UPON PAYMENT TO NOTEHOLDERS. This Indenture
and the respective obligations and responsibilities of the Issuer and the
Indenture Trustee created hereby shall terminate upon the payment to the
Noteholders, the Certificate Paying Agent (on behalf of the Certificateholders)
and the Indenture Trustee of all amounts required to be paid pursuant to Article
III; PROVIDED, HOWEVER, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. Xxxxx, living on the date hereof.
Section 8.05 RELEASE OF TRUST ESTATE. (a) Subject to the payment of its
reasonable fees and expenses, the Indenture Trustee may, and when required by
the provisions of this Indenture may, and when required by the provisions of
this Indenture shall, execute instruments to release property from the lien of
this Indenture, or convey the Indenture Trustee's interest in the same, in a
manner and under circumstances that are not inconsistent with the provisions of
this Indenture.
(b) The Indenture Trustee shall, at such time as (i) there are no Notes
Outstanding and (ii) all sums due the Indenture Trustee pursuant to this
Indenture have been paid, release any remaining portion of the Trust Estate that
secured the Notes from the lien of this Indenture.
(c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate.
Section 8.06 SURRENDER OF NOTES UPON FINAL PAYMENT. By acceptance of
any Note, the Holder thereof agrees to surrender such Note to the Indenture
Trustee promptly, prior to such Noteholder's receipt of the final payment
thereon.
Section 8.07 OPTIONAL REDEMPTION OF THE NOTES.
(a) The Group I Notes may be redeemed if the Servicer (or an affiliate
of the Servicer) exercises its option to purchase the Mortgage Loans from Loan
Group I in accordance with Section 5.06 of the Servicing Agreement. The Group II
Notes may be redeemed if the Servicer (or an affiliate of the Servicer)
exercises its option to purchase the Mortgage Loans from Loan Group II in
accordance with Section 5.06 of the Servicing Agreement.
(c) Following receipt of the notice and the aggregate Redemption Price,
calculated as specified in Section 5.06 of the Servicing Agreement, the
Indenture Trustee shall provide notice to the Noteholders of the final payment
on the Notes and shall apply such funds to make final payments of principal and
interest on the Notes in accordance with Section 3.05(a) hereof, and this
Indenture shall be discharged, subject to the provisions of Section 4.10 hereof.
(d) With respect to the Group I Mortgage Loans, in the event that the
Servicer (or an affiliate of the Servicer) exercises its purchase option as
provided above, Loan Group I shall be terminated in accordance with the
following additional requirements, unless the Indenture Trustee shall have been
furnished with an Opinion of Counsel to the effect that the failure of the Trust
Estate to comply with the requirements of this Section will not (i) result in
the imposition of taxes on
66
"prohibited transactions" of the Trust Estate as defined in Section 860F of the
Code or (ii) cause any REMIC constituting part of the Trust Estate to fail to
qualify as a REMIC at any time that any Certificates are outstanding:
(i) The Indenture Trustee shall designate a date within 90
days prior to the final Payment Date as the date of adoption of plans
of complete liquidation of each REMIC and shall specify such date in
the final federal income tax return of each REMIC;
(ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Payment Date, the Indenture
Trustee shall sell all of the assets of Loan Group I to the Servicer
(or an affiliate of the Servicer) for cash; and
(iii) At the time of the making of the final payment on the
Group I Notes, the Class IX Notes, the Class IN Notes, the Class R
Notes and the Class R-4 Notes, the Indenture Trustee shall pay or
credit, or cause to be paid or credited in the following order of
priority (A) to the Holders of each of the Class IA-1 and the Class
A-IO Notes, one month's interest thereon at the applicable Note Rate,
and to the Class IA-1 Notes, its Note Balance, (B) to the Holders of
each of the Class IM-1, Class IM-2, Class IB-1 Notes, the related Note
Balance, as applicable, plus one month's interest thereon at the
applicable Note Rate, (C) to the Holders of the Class IN and Class IX
Notes in respect of the Class IX/N Interest, the amount of any
remaining Group I Monthly Excess Cashflow Amounts not previously paid
thereon, (C) to the remaining REMIC Regular Interests the amounts
allocable thereto pursuant to Article X and (D) to the Holders of the
Class R Notes, in respect of the Class R-1 Interest, the Class R-2
Interest and the Class R-3 Interest, all cash on hand after such
payment (other than cash retained to meet claims), except that any
remaining amounts payable from REMIC 4 after payment to the Class IX/N
Interest shall be distributed to the Class R-4 Notes, and Loan Group I
shall terminate at such time.
(b) By their acceptance of Notes, the Holders thereof hereby
agree to appoint the Indenture Trustee as their attorney in fact to: (i)
designate such date of adoption of plans of complete liquidation and (ii) to
take such other action in connection therewith as may be reasonably required to
carry out such plans of complete liquidation all in accordance with the terms
hereof.
67
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
reasonably satisfactory to the Indenture Trustee, for any of the following
purposes:
(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto the Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer, and the
assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit
of the Holders of the Notes, or to surrender any right or power herein
conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct any error, or to correct
or supplement any provision herein or in any supplemental indenture
that may be inconsistent with any other provision herein, in any
supplemental indenture or in the Prospectus Supplement;
(vi) to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided, that such action shall not materially and
adversely affect the interests of the Holders of the Notes;
(vii) to evidence and provide for the acceptance of the
appointment hereunder by a successor indenture trustee with respect to
the Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration of the
trusts hereunder by more than one trustee, pursuant to the requirements
of Article VI; or
(viii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA; PROVIDED,
HOWEVER, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel
that entering into such indenture supplement will not have any material
adverse tax consequences to the Noteholders. The Indenture Trustee is
hereby authorized to
68
join in the execution of any such supplemental indenture and to make
any further appropriate agreements and stipulations that may be therein
contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Notes but
with prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; PROVIDED, HOWEVER, that such action shall not, as evidenced by an
Opinion of Counsel, (i) adversely affect in any material respect the interests
of any Noteholder or (ii) cause the Issuer to be subject to an entity level tax.
(c) The Issuer and the Indenture Trustee shall, as directed by the
Holders of Certificates which represent not less than 100% of the Certificate
Percentage Interests thereof, enter into an indenture or indentures supplemental
hereto for the purpose of providing for the issuance of one or more additional
classes of Notes entitled to payments derived solely from all or a portion of
the payments to which the Certificates issued on the Closing Date pursuant to
the Trust Agreement are entitled; PROVIDED, HOWEVER, that such action shall not,
as evidenced by an Opinion of Counsel, (i) adversely affect in any material
respect the interests of any Noteholder or (ii) cause the Issuer to be subject
to an entity level tax. Each such class of Notes shall be a non-recourse
obligation of the Issuer and shall be entitled to interest and principal in such
amounts, and to such security for the repayment thereof, as shall be specified
in such amendment or amendments. Promptly after the execution by the Issuer and
the Indenture Trustee of any amendments pursuant to this Section or the creation
of a new indenture and the issuance of the related class or classes of Notes,
the Issuer shall require the Indenture Trustee to give notice to the Holders of
the Notes and the Rating Agencies setting forth in general terms the substance
of the provisions of such amendment. Any failure of the Indenture Trustee to
provide such notice as is required under this paragraph, or any defect therein,
shall not, however, in any way impair or affect the validity of such amendment
or any class of Notes issued pursuant thereto.
Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and with the prior consent of the
Holders of not less than a majority of the aggregate Note Balance of the Notes
affected thereby by Act of such Holders delivered to the Issuer and the
Indenture Trustee, enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any
manner the rights of the Holders of the Notes under this Indenture; PROVIDED,
HOWEVER, that no such supplemental indenture shall, without the consent of the
Holder of each Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof or
the interest rate thereon, change the provisions of this Indenture
relating to the application of collections on, or the proceeds of the
Sale of, the Trust Estate to payment of principal of or interest on the
Notes, or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the right
to institute suit for the enforcement of the provisions of this
69
Indenture requiring the application of funds available therefor, as
provided in Article V, to the payment of any such amount due on the
Notes on or after the respective due dates thereof;
(ii) reduce the percentage of the related Note Balance or
Notional Amount, as applicable, of any Class of Notes, the consent of
the Holders of which is required for any such supplemental indenture,
or the consent of the Holders of which is required for any waiver of
compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences provided for in this
Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding" or modify or alter the exception
in the definition of the term "Holder";
(iv) reduce the percentage of the aggregate Note Balance of
the Notes required to direct the Indenture Trustee to direct the Issuer
to sell or liquidate the Trust Estate pursuant to Section 5.04;
(v) modify any provision of this Section 9.02 except to
increase any percentage specified herein or to provide that certain
additional provisions of this Indenture or the Basic Documents cannot
be modified or waived without the consent of the Holder of each Note
affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Payment Date (including
the calculation of any of the individual components of such
calculation); or
(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein,
terminate the lien of this Indenture on any property at any time
subject hereto or deprive the Holder of any Note of the security
provided by the lien of this Indenture; and provided, further, that
such action shall not, as evidenced by an Opinion of Counsel, cause the
Issuer to be subject to an entity level tax.
The Indenture Trustee may in its discretion determine whether or not
any Notes would be affected by any supplemental indenture and any such
determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Indenture
Trustee shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders (as defined in
Section 10.03) under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such Act shall
approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Notes and the Custodian to which such amendment
or supplemental indenture relates a notice setting forth
70
in general terms the substance of such supplemental indenture. Any failure of
the Indenture Trustee to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such supplemental
indenture.
Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture and conforms to the requirements of
the Trust Indenture Act. The Indenture Trustee may, but shall not be obligated
to, enter into any such supplemental indenture that affects the Indenture
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
Section 9.06 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes.
71
ARTICLE X
REMIC ADMINISTRATION
Section 10.01 INDENTURE TRUSTEE TO ADMINISTER REMICs.
(a) The Indenture Trustee shall make or cause to be made REMIC
elections for each of REMIC 1, REMIC 2, REMIC 3 and REMIC 4 as set forth in this
Indenture and the Appendix on Forms 1066 or other appropriate federal tax or
information return for the taxable year ending on the last day of the calendar
year in which the Group I Notes are issued. The regular interests and residual
interest in each REMIC shall be as designated in Section 10.04.
(b) The Closing Date is hereby designated as the "Startup Day" of each
REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The Servicer shall pay any and all tax related expenses (not
including taxes) of each REMIC, including, but not limited to, any professional
fees or expenses related to audits or any administrative or judicial proceedings
with respect to such REMIC that involve the Internal Revenue Service or state
tax authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Servicer in fulfilling its duties hereunder. The Servicer
shall be entitled to reimbursement of expenses to the extent provided in clause
(i) above from the Collection Account.
(d) The Indenture Trustee shall prepare or cause to be prepared, sign
and file or cause to be filed, each REMIC's federal and state tax and
information returns as such REMIC's direct representative. The expenses of
preparing and filing such returns shall be borne by the Indenture Trustee.
(e) The Holder of the Class R Notes holding the largest Percentage
Interest shall be the "tax matters person" as defined in the REMIC Provisions
(the "Tax Matters Person") with respect to each of REMIC 1, REMIC 2 and REMIC 3.
The Holder of the Class R-4 Notes holding the largest Percentage Interest shall
be the Tax Matters Person with respect to REMIC 4. The Indenture Trustee is
irrevocably designated as and shall act as attorney-in-fact and agent for each
Tax Matters Person for each REMIC. The Indenture Trustee, as agent for the Tax
Matters Person, shall perform, on behalf of each REMIC, all reporting and other
tax compliance duties that are the responsibility of such REMIC under the Code,
the REMIC Provisions, or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
if required by the Code, the REMIC Provisions, or other such guidance, the
Indenture Trustee, as agent for the Tax Matters Person, shall provide (i) to the
Treasury or other governmental authority such information as is necessary for
the application of any tax relating to the transfer of a Residual Note to any
disqualified person or organization and (ii) to the Noteholders such information
or reports as are required by the Code or REMIC Provisions.
72
(f) The Indenture Trustee, the Servicer, and the Holders of Notes shall
take any action or cause any REMIC to take any action necessary to create or
maintain the status of such REMIC as a REMIC under the REMIC Provisions and
shall assist each other as necessary to create or maintain such status. Neither
the Indenture Trustee, the Servicer, nor the Holder of any Residual Note shall
take any action or cause any REMIC to take any action or fail to take (or fail
to cause to be taken) any action that, under the REMIC Provisions, if taken or
not taken, as the case may be, could (i) endanger the status of such REMIC as a
REMIC or (ii) result in the imposition of a tax upon such REMIC (including, but
not limited to, the tax on prohibited transactions as defined in Code Section
860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Indenture
Trustee and the Servicer have received an Opinion of Counsel (at the expense of
the party seeking to take such action) to the effect that the contemplated
action will not endanger such status or result in the imposition of such a tax.
In addition, prior to taking any action with respect to any REMIC or the assets
therein, or causing such REMIC to take any action, which is not expressly
permitted under the terms of this Agreement, any Holder of a Residual Note will
consult with the Indenture Trustee and the Servicer, or their respective
designees, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to such REMIC, and no such Person
shall take any such action or cause such REMIC to take any such action as to
which the Indenture Trustee or the Servicer has advised it in writing that an
Adverse REMIC Event could occur.
(g) Each Holder of a Residual Note shall pay when due its PRO RATA
share of any and all taxes imposed on any REMIC by federal or state governmental
authorities. To the extent that such REMIC taxes are not paid by Residual
Noteholders, the Indenture Trustee shall pay any remaining REMIC taxes out of
current or future amounts otherwise payable to the Holder of the Residual Note
in each REMIC or, if no such amounts are available, out of other amounts held in
the Collection Account, and shall reduce amounts otherwise payable to Holders of
the REMIC Regular Interests or the Notes, as the case may be.
(h) The Indenture Trustee, shall, for federal income tax purposes,
maintain or cause to be maintained books and records with respect to each REMIC
on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any REMIC,
except as expressly provided in the Mortgage Loan Purchase Agreement with
respect to Eligible Substitute Mortgage Loans.
(j) Neither the Indenture Trustee nor the Servicer shall enter into any
arrangement by which any REMIC will receive a fee or other compensation for
services.
(k) On or before April 15th of each calendar year beginning in 2002,
the Servicer shall deliver to the Indenture Trustee and each Rating Agency an
Officer's Certificate stating the Servicer's compliance with the provisions of
this Section 10.01.
(l) The Indenture Trustee shall treat the Excess Reserve Fund Account
as an outside reserve fund within the meaning of Treasury Regulation Section
1.860G-2(h) that is owned by the Class IX Noteteholders and that is not an asset
of any REMIC. The Indenture Trustee shall treat the
73
rights of the Offered Notes to receive payments from the Excess Reserve Fund
Account in respect of XXXXX Xxxxxxxxx Amounts as a right in interest rate cap
contracts written by the Class IX and Class IN Noteholders, as beneficial equity
owners of the Class IX/N Interest, in favor of the Offered Noteholders, and the
Indenture Trustee shall account for such as property held separate and apart
from the regular interests it holds in the REMICs created hereunder. This
provision is intended to satisfy the requirements of Treasury Regulation Section
1.860G-2(i) for the treatment of property rights coupled with regular interests
to be separately respected and shall be interpreted consistent with such
regulation. On each Payment Date, to the extent the Class IA-1 Notes or Group I
Mezzanine Notes receive interest in excess of the Group I Pool Cap, such
interest will be treated as distributed to the Class IX/N Interest, pro rata,
and then paid to the Excess Reserve Fund Account and then paid to the Offered
Notes, respectively, pursuant to the related interest rate cap agreement.
Section 10.02 PROHIBITED TRANSACTIONS AND ACTIVITIES.
Neither the Seller, the Depositor, the Servicer nor the Indenture
Trustee shall sell, dispose of, or substitute for any of the Group I Mortgage
Loans, except in a disposition pursuant to (i) the foreclosure of a Group I
Mortgage Loan, (ii) the bankruptcy of the Trust Estate, (iii) the termination of
any REMIC pursuant to Article X of this Agreement, (iv) a substitution pursuant
to the Servicing Agreement or (v) a repurchase of Group I Mortgage Loans
pursuant to the Servicing Agreement, nor acquire any assets for any REMIC, nor
sell or dispose of any investments in the Payment Account for gain, nor accept
any contributions to any REMIC after the Closing Date, unless it has received an
Opinion of Counsel (at the expense of the party causing such sale, disposition,
or substitution) that such disposition, acquisition, substitution, or acceptance
will not (a) affect adversely the status of such REMIC as a REMIC or of the
interests therein other than the Residual Notes as the regular interests
therein, (b) affect the payment of interest or principal on the Notes, (c)
result in the encumbrance of the assets transferred or assigned to the Trust
Estate (except pursuant to the provisions of this Agreement) or (d) cause such
REMIC to be subject to a tax on prohibited transactions or prohibited
contributions pursuant to the REMIC Provisions.
Section 10.03 INDEMNIFICATION WITH RESPECT TO CERTAIN TAXES AND LOSS OF
REMIC STATUS.
In the event that any REMIC formed hereunder fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer of its duties and
obligations set forth herein, the Servicer shall indemnify the Holder of the
related Residual Note against any and all losses, claims, damages, liabilities
or expenses ("Losses") resulting from such negligence; provided, however, that
the Servicer shall not be liable for any such Losses attributable to the action
or inaction of the Indenture Trustee, the Depositor or the Holder of such
Residual Note, as applicable, nor for any such Losses resulting from
misinformation provided by the Holder of such Residual Note on which the
Servicer has relied. The foregoing shall not be deemed to limit or restrict the
rights and remedies of the Holder of such Residual Note now or hereafter
existing at law or in equity. Notwithstanding the foregoing, however, in no
event shall the Servicer have any liability (1) for any action or omission that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Agreement, (2) for any Losses
other than arising out of a negligent performance by the Servicer of its duties
and
74
obligations set forth herein, and (3) for any special or consequential damages
to Noteholders (in addition to payment of principal and interest on the Notes).
Section 10.04 REMIC PAYMENT RULES.
REMIC 1
REMIC 1 will be evidenced by Class T-1A, Class T-1B and Class T-1C,
which will be uncertificated and non-transferable and are hereby designated as
the "regular interests" in REMIC 1. The REMIC 1 interests will have the
following designations, initial principal balances, pass-through rates and
Latest Possible Maturity Dates:
Class Initial Uncertificated Uncertificated
Designation Principal Balance REMIC 1 Note Rate Latest Possible Maturity Date
----------- ----------------- ----------------- -----------------------------
T-1A $ 89,039,838.00 (1) November 25, 2033
T-1B $118,604,756.92 (1) November 25, 2033
T-1C $ 46,754,942.36 (2) November 25, 2033
--------------
(1) Calculated pursuant to the definition of the Weighted Average Net Mortgage
Rate of the Group I Mortgage Loans with a Net Mortgage Rate equal to or in
excess of 8.00%.
(2) Calculated pursuant to the definition of the Weighted Average Net Mortgage
Rate of the Group I Mortgage Loans with a Net Mortgage Rate less than
8.00%.
On each Payment Date, distributions of principal on Group I Mortgage
Loans with Weighted Average Net Mortgage Rates equal to or in excess of 8.00%
will be made first, to T-1B until it is reduced to zero, and then to T-1A until
it is reduced to zero. On each Payment Date, payments of interest on Group I
Mortgage Loans with Weighted Average Net Mortgage Rates less than 8.00% will be
made to T-1C until it is reduced to zero. Any remaining distributions will be
made to the Class R-1 Interest.
75
REMIC 2
-------
REMIC 2 will be evidenced by the T2-Accrual Interest (the "Subsidiary
REMIC Accrual Class"), Class T2-A-1A, Class T2-M-1, Class T2-M-2 and Class
T2-B-1 Interests (the "Subsidiary REMIC Accretion Directed Classes"), which will
be uncertificated and non-transferable and are hereby designated as the "regular
interests" in REMIC 2. The REMIC 2 Interests will have the following
designations, initial principal balances, Note Rates, Corresponding Classes of
REMIC 3 Notes ("Corresponding Classes") and Latest Possible Maturity Dates:
Class Initial Uncertificated Uncertificated REMIC 2 Latest Possible
Designation Principal Balance Note Rate Corresponding Class Maturity Date
----------- ----------------- --------- ------------------- -------------
1/2 Mortgage Loan balance
plus 1/2 of the
Overcollateralization
T2-Accrual Amount (1) N/A November 25, 2033
T2-A-IO (2) (3) IA-IO November 25, 2033
1/2 of the Principal Balance
T2-A-1A of the Corresponding Class (1) IA-1 November 25, 2033
1/2 of the Principal Balance
T2-M-1 of the Corresponding Class (1) IM-1 November 25, 2033
1/2 of the Principal Balance
T2-M-2 of the Corresponding Class (1) IM-2 November 25, 2033
T2-B-1 1/2 of the Principal Balance (1) IB-1 November 25, 2033
of the Corresponding Class
---------------
(1) For the period up to and including the Payment Date in November 2002, the
weighted average of the interest rates on T-1A and T-1B and T-1C, where the
interest rate on T-1A is first reduced by 8.00% for the first through the
sixth Payment Dates and 5.00% for the seventh through the twelfth Payment
Dates; for all periods thereafter, the weighted average of the interest
rates on T-1A and T-1B and T-1C.
(2) For the period up to and including the Payment Date in November 2002, a
notional amount equal to the principal balance of T-1A; for all periods
thereafter, zero.
(3) For the first through the sixth Payment Dates, 8.00% and for the seventh
through the twelfth Payment Dates, 5.00%; for all periods thereafter, 0%.
On each Payment Date, 50% of the increase in the Group I
Overcollateralization Amount will be payable as a reduction of the principal
balances of the Subsidiary REMIC Accretion Directed Classes (each such Class
will be reduced by an amount equal to 50% of any increase in the Group I
Overcollateralization Amount that is attributable to a reduction in the
principal balance of its Corresponding Class) and will be accrued and added to
the principal balance of the Subsidiary REMIC Accrual Class. All payments of
scheduled principal and prepayments of principal generated by the Group I
Mortgage Loans shall be allocated 50% to the Subsidiary REMIC Accrual Class, and
50% to the Subsidiary REMIC Accretion Directed Classes (principal payments shall
be allocated among such Subsidiary REMIC Accretion Directed Classes in an amount
equal to 50% of the principal amounts allocated to their respective
Corresponding Classes), until paid in full. Notwithstanding the above, principal
payments allocated to the Class IX/N Interest that result in a reduction in the
Group I Overcollateralization Amount shall be allocated to the Subsidiary REMIC
Accrual Class (until paid in full). Realized Losses shall be applied so that
after all payments have been made on each Payment Date (i) the principal
balances of each of the Subsidiary REMIC Accretion Directed Classes is equal to
50% of the principal balance of their Corresponding Class,
76
and (ii) the Subsidiary REMIC Accrual Class is equal to 50% of the aggregate
principal balance of the Group I Mortgage Loans plus 50% of the Group I
Overcollateralization Amount.
REMIC 3
-------
The REMIC 3 Interests will have the following designations, REMIC
Pass-Through Rates, Original Class Note Balance or Original Class IX/N Notional
Amount and Latest Possible Maturity Date for each Class of Notes comprising the
interests in REMIC 3:
Initial Class
Class Designation Note Balance REMIC Note Rate Latest Possible Maturity Date
----------------- ------------ --------------- -----------------------------
IA-IO (1) (2) November 25, 2033
IA-1 $228,959,000.00 (3) November 25, 2033
IM-1 $ 10,176,000.00 (4) November 25, 2033
IM-2 $ 6,360,000.00 (5) November 25, 2033
IB-1 $ 5,088,000.00 (6) November 25, 2033
IT3-X/N (7) (7) November 25, 2033
Total $250,583,000.00(8) N/A N/A
------------------
(1) Class IA-IO has no principal balance but rather a notional balance,
initially equal to the lesser of (i) $89,039,838 and the Principal Balance
of the Group I Mortgage Loans with Mortgage Rates equal to or in excess of
8.00%. Class IA-IO shall be entitled to 100% of amounts received on Class
T2-AIO.
(2) Interest will accrue on the Class IA-IO Notes during each Interest Accrual
Period at a rate equal to (i) during the first twelve Interest Accrual
Periods, the Class IA-IO Note Rate and (ii) thereafter, 0%. As a result, no
payments will be made on the Class IA-IO Note after the November 2002
Payment Date.
(3) Interest will accrue on the Class IA-1 Notes at a rate equal to the least
of: (i) the Class IA-1 Note Rate and (ii) the Group I Pool Cap for such
Payment Date. The rate under clause (i) shall be multiplied by a fraction,
the numerator of which is the actual number of days in the Interest Accrual
Period and the denominator of which is 30 to convert such rates to the
equivalent of one based on twelve 30 day months.
(4) Interest will accrue on the Class IM-1 Notes at a rate equal to the lesser
of: (i) the Class M-1 Note Rate and (ii) the Group I Pool Cap for such
Payment Date. The rate under clause (i) shall be multiplied by a fraction,
the numerator of which is the actual number of days in the Interest Accrual
Period and the denominator of which is 30 to convert such rates to the
equivalent of one based on twelve 30 day months.
(5) Interest will accrue on the Class IM-2 Notes at a rate equal to the lesser
of: (i) the Class M-2 Note Rate and (ii) the Group I Pool Cap for such
Payment Date. The rate under clause (i) shall be multiplied by a fraction,
the numerator of which is the actual number of days in the Interest Accrual
Period and the denominator of which is 30 to convert such rates to the
equivalent of one based on twelve 30 day months.
(6) Interest will accrue on the Class IB-1 Notes at a rate equal to the lesser
of: (i) the Class IB-1 Note Rate and (ii) the Group I Pool Cap for such
Payment Date. The rate under clause (i) shall be multiplied by a fraction,
the numerator of which is the actual number of days in the Interest Accrual
Period and the denominator of which is 30 to convert such rates to the
equivalent of one based on twelve 30 day months.
(7) The Class IT3-X/N Interest is uncertificated, will have no principal
balance and will bear interest at its respective Class IT3-X/N Pass-Through
Rate on its Class IX/N Notional Amount. The Class IT3-X/N Interest is
hereby designated as a REMIC "regular interest" for federal income tax
purposes. The Class IT3-X/N Interest will also be entitled to principal in
the amount of the Group I Overcollateralization Release Amount as part of
the payment of Group I Monthly Excess Cashflow Amounts in conformity with
Section 4.02(c).
(8) Exclusive of the Class IA-IO Notional Amount and the Class IX/N Notional
Amount.
The Class R-3 Interest is hereby designated as the sole class of
residual interest in REMIC 3. The Class R Notes will represent beneficial
ownership of the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest.
77
REMIC 4
-------
REMIC 4 will be evidenced by the Class IX/N Interest, which will be
uncertificated and is hereby designated as the "regular interest" in REMIC 4.
The REMIC 4 interest will have the following designation, initial principal
amount, pass-through rate and Latest Possible Maturity Date:
Latest Possible Maturity
Class Designation Initial Principal Balance Note Rate Date
----------------- ------------------------- --------- ----
IX/N Interest (1) (2) November 25, 2033
(1) The Class IX/N Notional Amount. The Class IX/N Interest will be entitled to
principal in the amount of the Overcollateralization Release Amount as part
of the distribution of Group I Monthly Excess Cashflow Amounts in
conformity with Section 4.02(c).
(2) The Class IX/N Interest Pass-Through Rate.
The Class R-4 Interest is hereby designated as the sole class of
residual interest in REMIC 4. The Class R-4 Note will represent beneficial
ownership of the Class R-4 Interest.
78
ARTICLE XI
MISCELLANEOUS
-------------
Section 11.01 COMPLIANCE CERTIFICATES AND OPINIONS, ETC. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished. Every certificate or
opinion with respect to compliance with a condition or covenant provided for in
this Indenture shall include:
(1) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with;
(4) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with; and
(5) if the Signer of such Certificate or Opinion is required
to be Independent, the Statement required by the definition of the term
"Independent".
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days of such deposit) to the Issuer
of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (i) above, the Issuer
shall also deliver to the Indenture Trustee an Independent Certificate as to the
same matters, if the fair value to the Issuer of the securities to be so
deposited and of all other such securities made the basis of any such withdrawal
or release since the commencement of the then-current fiscal year of the Issuer,
as set forth in the certificates delivered pursuant to clause (i) above and this
clause (ii), is 10% or more of the aggregate Note Balance of the Notes, but such
a certificate need not be furnished with respect to any securities so deposited,
if the fair value thereof
79
to the Issuer as set forth in the related Officer's Certificate is less than
$25,000 or less than one percent of the aggregate Note Balance of the Notes.
(iii) Whenever any property or securities are to be released
from the lien of this Indenture, the Issuer shall also furnish to the Indenture
Trustee an Officer's Certificate certifying or stating the opinion of each
person signing such certificate as to the fair value (within 90 days of such
release) of the property or securities proposed to be released and stating that
in the opinion of such person the proposed release will not impair the security
under this Indenture in contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating the opinion of
any signer thereof as to the matters described in clause (iii) above, the Issuer
shall also furnish to the Indenture Trustee an Independent Certificate as to the
same matters if the fair value of the property or securities and of all other
property, other than property as contemplated by clause (v) below or securities
released from the lien of this Indenture since the commencement of the
then-current calendar year, as set forth in the certificates required by clause
(iii) above and this clause (iv), equals 10% or more of the aggregate Note
Balance of the Notes, but such certificate need not be furnished in the case of
any release of property or securities if the fair value thereof as set forth in
the related Officer's Certificate is less than $25,000 or less than one percent
of the then aggregate Note Balance of the Notes.
(v) Notwithstanding any provision of this Indenture, the
Issuer may, without compliance with the requirements of the other provisions of
this Section 10.01, (A) collect, sell or otherwise dispose of the Mortgage Loans
as and to the extent permitted or required by the Basic Documents or (B) make
cash payments out of the Payment Account as and to the extent permitted or
required by the Basic Documents, so long as the Issuer shall deliver to the
Indenture Trustee every six months, commencing January 31, 2002, an Officer's
Certificate of the Issuer stating that all the dispositions of Collateral
described in clauses (A) or (B) above that occurred during the preceding six
calendar months were in the ordinary course of the Issuer's business and that
the proceeds thereof were applied in accordance with the Basic Documents.
Section 11.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Seller or the Issuer, stating that the information with respect to such
factual matters is in the possession of the Seller or the Issuer, unless, in the
case of an Opinion of Counsel,
80
such counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section 11.03 ACTS OF NOTEHOLDERS. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to the Indenture Trustee, and, where it
is hereby expressly required, to the Issuer. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Noteholders signing such instrument or instruments. Proof
of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section
6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03.
(b) The fact and date of the execution by any person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Registrar.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration thereof or in exchange therefor or in lieu
thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
Section 11.04 NOTICES, ETC., TO INDENTURE TRUSTEE, ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders is to be made upon, given or
furnished to or filed with:
81
(i) the Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Indenture Trustee at the
Corporate Trust Office for the Indenture Trustee. The Indenture Trustee
shall promptly transmit any notice received by it from the Noteholders
to the Issuer, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and
mailed first-class, postage prepaid to the Issuer addressed to: Salomon
Mortgage Loan Trust, Series 2001-CB4, in care of Wilmington Trust
Company at the Corporate Trust Office for the Owner Trustee, or at any
other address previously furnished in writing to the Indenture Trustee
by the Issuer. The Issuer shall promptly transmit any notice received
by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, personally delivered
or mailed by certified mail, return receipt requested, to (i) in the case of
Moody's, at the following address: Xxxxx'x Investors Service, Inc., ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 and (ii) in
the case of Standard & Poor's, at the following address: Standard & Poor's, A
Division of the XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx - 00 Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Attention of Asset st Backed Surveillance Department; or
as to each of the foregoing, at such other address as shall be designated by
written notice to the other parties.
Section 11.05 NOTICES TO NOTEHOLDERS; WAIVER. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at such Person's address as it appears on the Note Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed to
be a sufficient giving of such notice.
82
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute an Event of
Default.
Section 11.06 ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by the Indenture Trustee to such Holder, that is different
from the methods provided for in this Indenture for such payments or notices.
The Issuer shall furnish to the Indenture Trustee a copy of each such agreement
and the Indenture Trustee shall cause payments to be made and notices to be
given in accordance with such agreements.
Section 11.07 CONFLICT WITH TRUST INDENTURE ACT. If any provision
hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required provision shall control. The provisions of TIA
xx.xx. 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.
Section 11.08 EFFECT OF HEADINGS. The Article and Section headings
herein are for convenience only and shall not affect the construction hereof.
Section 11.09 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee in
this Indenture shall bind its successors, co-trustees and agents.
Section 11.10 SEPARABILITY. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
Section 11.11 BENEFITS OF INDENTURE. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
Section 11.12 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
Section 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS,
83
RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE
WITH SUCH LAWS.
Section 11.14 COUNTERPARTS. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 11.15 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
Section 11.16 ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or
of any successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes of
this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Article VI, VII and VIII of the Trust Agreement.
Section 11.17 NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against the Depositor or the Issuer, or
join in any institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Notes, this Indenture or any
of the Basic Documents.
Section 11.18 INSPECTION. The Issuer agrees that, on reasonable prior
notice, it shall permit any representative of the Indenture Trustee, during the
Issuer's normal business hours, to examine all the books of account, records,
reports and other papers of the Issuer, to make copies and extracts therefrom,
to cause such books to be audited by Independent certified public accountants,
and to discuss the Issuer's affairs, finances and accounts with the Issuer's
officers, employees, and Independent certified public accountants, all at such
reasonable times and as often as may be reasonably requested. The Indenture
Trustee shall and shall cause its representatives to hold in confidence all such
information except to the extent disclosure may be required by law (and all
reasonable applications for confidential treatment are unavailing) and except to
the extent that the
84
Indenture Trustee may reasonably determine that such disclosure is consistent
with its obligations hereunder.
85
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
XXXXXXX MORTGAGE LOAN TRUST 2001-
CB4,
By: Wilmington Trust Company
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Senior Financial Services Officer
U.S. BANK NATIONAL ASSOCIATION, not in its
individual capacity but solely as Indenture Trustee
By: /s/ Xxxxxx Xxxxxxxxxxxxxx
------------------------------------------------
Name: Xxxxxx Xxxxxxxxxxxxxx
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION
hereby accepts the appointment as Paying
Agent pursuant to Section 3.03 hereof and as
Note Registrar pursuant to Section 4.02
hereof.
By: /s/ Xxxxxx Xxxxxxxxxxxxxx
-----------------------------------------
Name: Xxxxxx Xxxxxxxxxxxxxx
Title: Vice President
STATE OF MINNESOTA )
) ss.:
COUNTY OF XXXXXX )
On this __th day of December, 2001, before me personally
appeared___________, to me known, who being by me duly sworn, did depose and
say, that he resides at St. Xxxx, Minnesota, that he is the ________________ of
the Indenture Trustee, one of the corporations described in and which executed
the above instrument; and that he signed his name thereto by like order.
______________________________
Notary Public
STATE OF DELAWARE )
) ss.:
COUNTY OF NEW CASTLE )
On this 27th day of December, 2001, before me personally appeared
________________, to me known, who being by me duly sworn, did depose and say,
that he resides at Wilmington, Delaware, that he is the __________________ of
Wilmington Trust Company, as Owner Trustee, one of the corporations described in
and which executed the above instrument; and that he signed his name thereto by
like order.
______________________________
Notary Public
NOTARIAL SEAL
EXHIBITS
A-1
EXHIBIT A-1
FORM OF CLASS IA-IO NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-BASS Mortgage Loan Asset-Backed Note
Registered Notional Amount: $89,039,838.00
Class IA-IO Percentage Interest: 100.00%
No. 1 Note Rate: Variable
CUSIP No.12489 WD X9
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co. or registered assigns, interest on a notional amount of $89,039,838.00,
payable on each Payment Date in an amount equal to the Percentage Interest
specified above of the aggregate amount, if any, payable from the Payment
Account in respect of interest on the Class IA-IO Notes pursuant to Section 3.05
of the Indenture dated as of December 14, 2001 (the "Indenture") between the
Issuer, as Issuer, and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee"). Capitalized terms used but not defined herein are defined
in Appendix A of the Indenture.
The Note Rate for the Class IA-IO Notes for the first through
the sixth Payment Dates is 8.000% per annum, for the seventh through the twelfth
Payment Dates is 5.000% per annum and thereafter is 0.00% per annum.
Interest on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Notes are subject to all terms of the
Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Interest on this Class IA-1 Note will accrue for each
Payment Date from and including the first day of each month, commencing November
1, 2001, to and including the last day
of such month. Interest will be computed on the basis of a 360-day year assumed
to consist of twelve 30-day months. Interest on this Class IA-IO Note shall be
paid in the manner specified in the Indenture. Interest on this Note will be
payable on each Payment Date, commencing on December 26, 2001, as described in
the Indenture. "Payment Date" means the twenty-fifth day of each month, or, if
any such date is not a Business Day, then the next Business Day.
Notwithstanding the foregoing, if an Event of Default shall
have occurred and be continuing, the Indenture Trustee or the holders of Notes
representing not less than a majority of the aggregate Note Balance of all Notes
may declare the Note Balance of all the notes to be due and payable immediately.
Payments of interest on this Note due and payable on each
Payment Date, to the extent not in full payment of this Note, shall be made, if
such Holder holds Notes of an aggregate initial Notional Amount, of at least
$1,000,000, by wire transfer to an account specified in writing by such Holder
reasonably satisfactory to the Indenture Trustee as of the preceding Record Date
or in all other cases or if no such instructions have been delivered to the
Indenture Trustee, by check or money order to such Noteholder mailed to such
Xxxxxx's address as it appears in the Note Register.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder but
with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture
shall alter or impair, the obligation of the Issuer, which is absolute and
unconditional, to pay the interest on this Note at the times, place and rate,
and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The holder of this Note by its acceptance hereof
agrees that, except as expressly provided in the Basic Documents, in the case of
an Event of Default under the Indenture, the holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; PROVIDED,
HOWEVER, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IA-IO Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-2
FORM OF CLASS IA-1 NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IA-1 Principal Amount: $228,959,000.00
No. 1 Percentage Interest: 100.00%
CUSIP No.12489 WD Y7 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co. or registered assigns, the principal sum of $228,959,000.00, payable on
each Payment Date in an amount equal to the Percentage Interest specified above
of the aggregate amount, if any, payable from the Payment Account in respect of
principal on the Class IA-1 Notes pursuant to Section 3.05 of the Indenture
dated as of December 14, 2001 (the "Indenture") between the Issuer, as Issuer,
and U.S. Bank National Association, as Indenture Trustee (the "Indenture
Trustee"); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the Payment Date in November 2033, to the
extent not previously paid on a prior Payment Date. Capitalized terms used but
not defined herein are defined in Appendix A of the Indenture.
Interest on the Class IA-1 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. For each
Payment Date, the Note Rate for the Class IA-1 Notes is the lesser of (i) LIBOR
as of the related LIBOR Determination Date, plus the Class IA-1 Note Margin and
(ii) the Group I Pool Cap. For each Payment Date, the Note Margin for the Class
IA-1 Notes (i) on or prior to the Optional Redemption Date for the Group I
Mortgage Loans is 0.450% per annum and (ii) following the Optional Redemption
Date for the Group I Mortgage Loans is 0.900% per annum. Interest on this Class
IA-1 Note will accrue for each Payment Date from the most recent Payment Date on
which interest has been paid (in the case of the first Payment Date, from the
Closing Date) to but excluding such Payment Date. Interest will be computed on
the basis of the actual number of days in each Interest Accrual Period and a
year assumed to consist of 360 days. Principal of and interest on this Class
IA-1 Note shall be paid in the manner specified in the Indenture.
Principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its
C-Bass Mortgage Loan Asset-Backed Notes (herein called the "Notes"), all issued
under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on December 26, 2001, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in November 2033 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, the Indenture Trustee or the holders of Notes representing not less
than a majority of the aggregate Note Balance of all Notes may declare the Note
Balance of all the notes to be due and payable immediately. All principal
payments on the Notes shall be made PRO RATA to the holders of Notes entitled
thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made, if such Holder holds Notes of
an aggregate initial Note Balance, of at least $1,000,000, by wire transfer to
an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check or
money order to such Noteholder mailed to such Xxxxxx's address as it appears in
the Note Register. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee, the Seller, the Servicer, the Depositor or the
Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign
of the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the Issuer
and the Indenture Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of holders of the Notes issued
thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IA-1 Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-3
FORM OF CLASS IM-1 NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS IA-
IO AND CLASS IA-1 NOTES AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IM-1 Principal Amount: $10,176,000.00
No. 1 Percentage Interest: 100.00%
CUSIP No.12489 WD Z4 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co. or registered assigns, the principal sum of $10,176,000.00, payable on
each Payment Date in an amount equal to the Percentage Interest specified above
of the aggregate amount, if any, payable from the Payment Account in respect of
principal on the IM-1 Notes pursuant to Section 3.05 of the Indenture dated as
of December 14, 2001 (the "Indenture") between the Issuer, as Issuer, and U.S.
Bank National Association, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Payment Date in November 2033, to the extent not
previously paid on a prior Payment Date. Capitalized terms used but not defined
herein are defined in Appendix A of the Indenture.
Interest on the IM-1 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. For each
Payment Date, the Note Rate for the Class IM- 1 Notes is the lesser of (i) LIBOR
as of the related LIBOR Determination Date, plus the Class IM-1 Note Margin and
(ii) the Group I Pool Cap. For each Payment Date, the Note Margin for the Class
IM-1 Notes (i) on or prior to the Optional Redemption Date for the Group I
Mortgage Loans is 1.0000% per annum and (ii) following the Optional Redemption
Date for the Group I Mortgage Loans is 1.500% per annum. Interest on this IM-1
Note will accrue for each Payment Date from the most recent Payment Date on
which interest has been paid (in the case of the first Payment Date, from the
Closing Date) to but excluding such Payment Date. Interest will be computed on
the basis of the actual number of days in each Interest Accrual Period and a
year assumed to consist of 360 days. Principal of and interest on this IM-1 Note
shall be paid in the manner specified in the Indenture.
Principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its
C-Bass Mortgage Loan Asset-Backed Notes (herein called the "Notes"), all issued
under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the holders of
the Notes. The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on December 26, 2001, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in November 2033 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, the Indenture Trustee or the holders of Notes representing not less
than a majority of the aggregate Note Balance of all Notes may declare the Note
Balance of all the notes to be due and payable immediately. All principal
payments on the Notes shall be made PRO RATA to the holders of Notes entitled
thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made, if such Holder holds Notes of
an aggregate initial Note Balance, of at least $1,000,000, by wire transfer to
an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check or
money order to such Noteholder mailed to such Xxxxxx's address as it appears in
the Note Register. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee, the Seller, the Servicer, the Depositor or the
Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign
of the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer
hereof or in exchange hereof or in lieu hereof whether or not notation of such
consent or waiver is made upon this Note. The Indenture also permits the Issuer
and the Indenture Trustee to amend or waive certain terms and conditions set
forth in the Indenture without the consent of holders of the Notes issued
thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class 1M-1 Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-4
FORM OF CLASS IM-2 NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS IA-
IO, CLASS IA-1 AND CLASS IM-1 NOTES AS DESCRIBED IN THE INDENTURE REFERRED TO
HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IM-2 Principal Amount: $6,360,000.00
No. 1 Percentage Interest: 100.00%
CUSIP No.12489 WE A8 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co. or registered assigns, the principal sum of $6,360,000.00, payable on each
Payment Date in an amount equal to the Percentage Interest specified above of
the aggregate amount, if any, payable from the Payment Account in respect of
principal on the IM-2 Notes pursuant to Section 3.05 of the Indenture dated as
of December 14, 2001 (the "Indenture") between the Issuer, as Issuer, and U.S.
Bank National Association, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Payment Date in November 2033, to the extent not
previously paid on a prior Payment Date. Capitalized terms used but not defined
herein are defined in Appendix A of the Indenture.
Interest on the IM-2 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. For each
Payment Date, the Note Rate for the Class IM- 2 Notes is the lesser of (i) LIBOR
as of the related LIBOR Determination Date, plus the Class IM-2 Note Margin and
(ii) the Group I Pool Cap. For each Payment Date, the Note Margin for the Class
IM-2 Notes (i) on or prior to the Optional Redemption Date for the Group I
Mortgage Loans is 1.550% per annum and (ii) following the Optional Redemption
Date for the Group I Mortgage Loans is 2.325% per annum. Interest on this IM-2
Note will accrue for each Payment Date from the most recent Payment Date on
which interest has been paid (in the case of the first Payment Date, from the
Closing Date) to but excluding such Payment Date. Interest will be computed on
the basis of the actual number of days in each Interest Accrual Period and a
year assumed to consist of 360 days. Principal of and interest on this IM-2 Note
shall be paid in the manner specified in the Indenture.
Principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on December 26, 2001, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in November 2033 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, the Indenture Trustee or the holders of Notes representing not less
than a majority of the aggregate Note Balance of all Notes may declare the Note
Balance of all the notes to be due and payable immediately. All principal
payments on the Notes shall be made PRO RATA to the holders of Notes entitled
thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made, if such Holder holds Notes of
an aggregate initial Note Balance, of at least $1,000,000, by wire transfer to
an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check or
money order to such Noteholder mailed to such Xxxxxx's address as it appears in
the Note Register. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner
Trustee, the Seller, the Servicer, the Depositor or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is
made upon this Note. The Indenture also permits the Issuer and the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of holders of the Notes issued thereunder but with
prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IM-2 Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-5
FORM OF CLASS IB-1 NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS IA-
IO, CLASS IA-1, CLASS IM-1 AND CLASS IM-2 NOTES AS DESCRIBED IN THE INDENTURE
REFERRED TO HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IB-1 Principal Amount: $5,088,000.00
No. 1 Percentage Interest: 100.00%
CUSIP No.12489 WE B6 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co. or registered assigns, the principal sum of $5,088,000.00, payable on each
Payment Date in an amount equal to the Percentage Interest specified above of
the aggregate amount, if any, payable from the Payment Account in respect of
principal on the IB-1 Notes pursuant to Section 3.05 of the Indenture dated as
of December 14, 2001 (the "Indenture") between the Issuer, as Issuer, and U.S.
Bank National Association, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Payment Date in November 2033, to the extent not
previously paid on a prior Payment Date. Capitalized terms used but not defined
herein are defined in Appendix A of the Indenture.
Interest on the IB-1 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. For each
Payment Date, the Note Rate for the Class IB- 1 Notes is the lesser of (i) LIBOR
as of the related LIBOR Determination Date, plus the Class IB-1 Note Margin and
(ii) the Group I Pool Cap. For each Payment Date, the Note Margin for the Class
IB-1 Notes (i) on or prior to the Optional Redemption Date for the Group I
Mortgage Loans is 2.250% per annum and (ii) following the Optional Redemption
Date for the Group I Mortgage Loans is 3.375% per annum. Interest on this IB-1
Note will accrue for each Payment Date from the most recent Payment Date on
which interest has been paid (in the case of the first Payment Date, from the
Closing Date) to but excluding such Payment Date. Interest will be computed on
the basis of the actual number of days in each Interest Accrual Period and a
year assumed to consist of 360 days. Principal of and interest on this IB-1 Note
shall be paid in the manner specified in the Indenture.
Principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on December 26, 2001, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in November 2033 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, the Indenture Trustee or the holders of Notes representing not less
than a majority of the aggregate Note Balance of all Notes may declare the Note
Balance of all the notes to be due and payable immediately. All principal
payments on the Notes shall be made PRO RATA to the holders of Notes entitled
thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made, if such Holder holds Notes of
an aggregate initial Note Balance, of at least $1,000,000, by wire transfer to
an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check or
money order to such Noteholder mailed to such Xxxxxx's address as it appears in
the Note Register. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner
Trustee, the Seller, the Servicer, the Depositor or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director or employee
of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is
made upon this Note. The Indenture also permits the Issuer and the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of holders of the Notes issued thereunder but with
prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IB-1 Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-6
FORM OF CLASS IX NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS IA-
IO, CLASS IA-1, CLASS IM-1, CLASS IM-2, CLASS IB-1 AND CLASS IN NOTES AS
DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THIS CLASS IX NOTE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE INDENTURE AGREEMENT REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN.
NO TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE
(A) TO ANY EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT ("PLAN") THAT
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS NOTE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, UNLESS
SUCH PLAN OR PERSON PROVIDES EITHER THE OPINION OF COUNSEL OR CERTIFICATION
DESCRIBED IN SECTION 2.04 OF THE INDENTURE REFERRED TO HEREIN.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IX Percentage Interest: 100.00%
No. 1
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to
Credit-Based Asset Servicing and Securitization LLC or registered assigns, on
each Payment Date all amount owed this Class IX Note pursuant to Section 3.05 of
the Indenture dated as of December 14, 2001 (the "Indenture") between the
Issuer, as Issuer, and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee"). Capitalized terms used but not defined herein are defined
in Appendix A of the Indenture.
Payments on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Notes are subject to all terms of the
Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or,
if any such date is not a Business Day, then the next Business Day.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes may declare the Note Balance
of all the notes to be due and payable immediately.
Payments on this Note due and payable on each Payment Date, to
the extent not in full payment of this Note, shall be made, if such Holder holds
Notes of an aggregate initial Note Balance, of at least $1,000,000, by wire
transfer to an account specified in writing by such Holder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or in all
other cases or if no such instructions have been delivered to the Indenture
Trustee, by check or money order to such Noteholder mailed to such Xxxxxx's
address as it appears in the Note Register.
No transfer, sale, pledge or other disposition of this Note
shall be made unless such disposition is exempt from the registration
requirements of the 1933 Act, and any applicable state securities laws or is
made in accordance with the 1933 Act and laws. In the event of any such
transfer, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Indenture Trustee, in
substantially the form attached as Exhibit D to the Indenture) under the 1933
Act, the Indenture Trustee and the Issuer shall require a written Opinion of
Counsel (which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Indenture Trustee and the Issuer that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuer or (ii) the Indenture Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached as
Exhibit F to the Indenture) and the transferee to execute an investment letter
(in substantially the form attached as Exhibit D to the Indenture) acceptable to
and in form and substance reasonably satisfactory to the Issuer and the
Indenture Trustee certifying to the Issuer and the Indenture Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Indenture Trustee or the Issuer. The Holder of this Note desiring to effect
a transfer shall, and does hereby agree to, indemnify the Indenture Trustee and
the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Note or any interest herein to a Plan
subject to ERISA or Section 4975 of the Code, any Person acting directly or
indirectly, on behalf of any such Plan or any Person using Plan Assets to
acquire this Note shall be made except in accordance with Section 4.02 of the
Indenture.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder but
with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and
remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to make payments on this Note at the times,
place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for payments on this Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The holder of this Note by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IX Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-7
FORM OF CLASS IN NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS IA-
IO, CLASS IA-1, CLASS IM-1, CLASS IM-2 AND CLASS IB-1 NOTES AS DESCRIBED IN THE
INDENTURE REFERRED TO HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THIS CLASS IN NOTE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN.
NO TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE
(A) TO ANY EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT ("PLAN") THAT
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS NOTE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, UNLESS
SUCH PLAN OR PERSON PROVIDES EITHER THE OPINION OF COUNSEL OR CERTIFICATION
DESCRIBED IN SECTION 2.04 OF THE INDENTURE REFERRED TO HEREIN.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IN Notional Amount: $13,500,000.00
No. 1 Percentage Interest: 100.00%
Note Rate: 10.00%
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to
Credit-Based Asset Servicing and Securitization LLC or registered assigns, on
each Payment Date all amount owed this Class IN Note pursuant to Section 3.05 of
the Indenture dated as of December 14, 2001 (the "Indenture") between the
Issuer, as Issuer, and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee"). Capitalized terms used but not defined herein are defined
in Appendix A of the Indenture.
Payments on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Notes are subject to all terms of the
Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or,
if any such date is not a Business Day, then the next Business Day.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes may declare the Note Balance
of all the notes to be due and payable immediately.
Payments on this Note due and payable on each Payment Date, to
the extent not in full payment of this Note, shall be made, if such Holder holds
Notes of an aggregate initial Note Balance, of at least $1,000,000, by wire
transfer to an account specified in writing by such Holder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or in all
other cases
or if no such instructions have been delivered to the Indenture Trustee, by
check or money order to such Noteholder mailed to such Xxxxxx's address as it
appears in the Note Register.
No transfer, sale, pledge or other disposition of this Note
shall be made unless such disposition is exempt from the registration
requirements of the 1933 Act, and any applicable state securities laws or is
made in accordance with the 1933 Act and laws. In the event of any such
transfer, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Indenture Trustee, in
substantially the form attached as Exhibit D to the Indenture) under the 1933
Act, the Indenture Trustee and the Issuer shall require a written Opinion of
Counsel (which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Indenture Trustee and the Issuer that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuer or (ii) the Indenture Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached as
Exhibit F to the Indenture) and the transferee to execute an investment letter
(in substantially the form attached as Exhibit D to the Indenture) acceptable to
and in form and substance reasonably satisfactory to the Issuer and the
Indenture Trustee certifying to the Issuer and the Indenture Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Indenture Trustee or the Issuer. The Holder of this Note desiring to effect
a transfer shall, and does hereby agree to, indemnify the Indenture Trustee and
the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Note or any interest herein to a Plan
subject to ERISA or Section 4975 of the Code, any Person acting directly or
indirectly, on behalf of any such Plan or any Person using Plan Assets to
acquire this Note shall be made except in accordance with Section 4.02 of the
Indenture.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting
the benefits of the Indenture that such holder or Beneficial Owner of a Note
will not at any time institute against the Depositor, the Seller, the Servicer,
or the Issuer, or join in any institution against the Depositor, the Seller, the
Servicer, or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder but
with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to make payments on this Note at the times,
place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for payments on this Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The holder of this Note by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IN Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-8
FORM OF CLASS R NOTES
THIS NOTE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THIS CLASS R NOTE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN.
NO TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE
(A) TO ANY EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT ("PLAN") THAT
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS NOTE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, UNLESS
SUCH PLAN OR PERSON PROVIDES EITHER THE OPINION OF COUNSEL OR CERTIFICATION
DESCRIBED IN SECTION 2.04 OF THE INDENTURE REFERRED TO HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R NOTE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO THE
NOTE REGISTRAR AND THE INDENTURE TRUSTEE THAT SUCH TRANSFEREE IS NOT (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER
THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS EXEMPT FROM
THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH ORGANIZATION IS SUBJECT TO
THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY ORGANIZATION DESCRIBED IN
SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING
CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION AND (2) NO
PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND
(3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE NOTWITHSTANDING THE REGISTRATION
IN THE NOTE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CLASS R
NOTE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION,
SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER
AND SUCH PERSON SHALL NOT BE DEEMED TO BE A NOTE HOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
NOTE. EACH HOLDER OF A CLASS R NOTE BY ACCEPTANCE OF THIS NOTE SHALL BE DEEMED
TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE PROVISIONS OF
SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL OWNERSHIP OF
THIS CLASS R NOTE.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class R Percentage Interest: 50.00%
No. 1 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to CMI
Investors 2, L.P. or registered assigns, on each Payment Date all amount owed
this Class R Note pursuant to Section 3.05 of the Indenture dated as of December
14, 2001 (the "Indenture") between the Issuer, as Issuer, and U.S. Bank National
Association, as Indenture Trustee (the "Indenture Trustee"). Capitalized terms
used but not defined herein are defined in Appendix A of the Indenture.
Payments on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Notes are subject to all terms of the
Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or,
if any such date is not a Business Day, then the next Business Day.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes may declare the Note Balance
of all the notes to be due and payable immediately.
Payments on this Note due and payable on each Payment Date, to
the extent not in full payment of this Note, shall be made, if such Holder holds
Notes of an aggregate initial Note Balance, of at least $1,000,000, by wire
transfer to an account specified in writing by such Holder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or in all
other cases or if no such instructions have been delivered to the Indenture
Trustee, by check or money order to such Noteholder mailed to such Xxxxxx's
address as it appears in the Note Register.
No transfer, sale, pledge or other disposition of this Note
shall be made unless such disposition is exempt from the registration
requirements of the 1933 Act, and any applicable state securities laws or is
made in accordance with the 1933 Act and laws. In the event of any such
transfer, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Indenture Trustee, in
substantially the form attached as Exhibit D to the Indenture) under the 1933
Act, the Indenture Trustee and the Issuer shall require a written Opinion of
Counsel (which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Indenture Trustee and the Issuer that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuer or (ii) the Indenture Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached as
Exhibit F to the Indenture) and the transferee to execute an investment letter
(in substantially the form attached as Exhibit D to the Indenture) acceptable to
and in form and substance reasonably satisfactory to the Issuer and the
Indenture Trustee certifying to the Issuer and the Indenture Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Indenture Trustee or the Issuer. The Holder of this Note desiring to effect
a transfer shall, and does hereby agree to, indemnify the Indenture Trustee and
the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Note or any interest herein to a Plan
subject to ERISA or Section 4975 of the Code, any Person acting directly or
indirectly, on behalf of any such Plan or any Person using Plan Assets to
acquire this Note shall be made except in accordance with Section 4.02 of the
Indenture.
Each Holder of this Note will be deemed to have agreed to be
bound by the restrictions of the Indenture, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Note must be a Permitted Transferee, (ii) no Ownership Interest in this
Note may be transferred without delivery to the Indenture Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Indenture, (iii) each person holding or acquiring any Ownership Interest in this
Note must agree to require a transfer affidavit and to deliver a transfer
certificate to the Indenture Trustee as required pursuant to the Indenture, (iv)
each person holding or acquiring an Ownership Interest in this Note must agree
not to transfer an Ownership Interest in this Note if it has actual knowledge
that the proposed transferee is not a Permitted Transferee and (v) any attempted
or purported transfer of any Ownership Interest in this Note in violation of
such restrictions will be absolutely null and void and will vest no rights in
the purported transferee. Pursuant to the Indenture, the Indenture Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Note in violation of the restrictions mentioned above.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case
of a Beneficial Owner of a Note, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee, the Seller, the Servicer, the
Depositor or the Indenture Trustee on the Notes or under the Indenture or any
certificate or other writing delivered in connection therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director or employee of the Indenture Trustee or
the Owner Trustee in its individual capacity, any holder of a beneficial
interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any
successor or assign of the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder
and upon all future holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Issuer and the Indenture Trustee to amend or waive certain
terms and conditions set forth in the Indenture without the consent of holders
of the Notes issued thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to make payments on this Note at the times,
place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for payments on this Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The holder of this Note by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Notes referred to in the within mentioned
Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
FORM OF CLASS R NOTES
THIS NOTE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THIS CLASS R NOTE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN.
NO TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE
(A) TO ANY EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT ("PLAN") THAT
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS NOTE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, UNLESS
SUCH PLAN OR PERSON PROVIDES EITHER THE OPINION OF COUNSEL OR CERTIFICATION
DESCRIBED IN SECTION 2.04 OF THE INDENTURE REFERRED TO HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R NOTE
MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO THE
NOTE REGISTRAR AND THE INDENTURE TRUSTEE THAT SUCH TRANSFEREE IS NOT (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED
IN SECTION 521 OF THE
CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREINAFTER REFERRED TO
AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX, AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE
NOTWITHSTANDING THE REGISTRATION IN THE NOTE REGISTER OR ANY TRANSFER, SALE OR
OTHER DISPOSITION OF THIS CLASS R NOTE TO A DISQUALIFIED ORGANIZATION OR AN
AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
NOTE HOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS NOTE. EACH HOLDER OF A CLASS R NOTE BY
ACCEPTANCE OF THIS NOTE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
THIS PARAGRAPH AND THE PROVISIONS OF SECTION 4.02 OF THE INDENTURE REFERRED TO
HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM
ACQUIRING BENEFICIAL OWNERSHIP OF THIS CLASS R NOTE.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class R Percentage Interest: 50.00%
No. 2 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to
Residual Interest Investments, LP or registered assigns, on each Payment Date
all amount owed this Class R Note pursuant to Section 3.05 of the Indenture
dated as of December 14, 2001 (the "Indenture") between the Issuer, as Issuer,
and U.S. Bank National Association, as Indenture Trustee (the "Indenture
Trustee"). Capitalized terms used but not defined herein are defined in Appendix
A of the Indenture.
Payments on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Notes are subject to all terms of the
Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or,
if any such date is not a Business Day, then the next Business Day.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes may declare the Note Balance
of all the notes to be due and payable immediately.
Payments on this Note due and payable on each Payment Date, to
the extent not in full payment of this Note, shall be made, if such Holder holds
Notes of an aggregate initial Note Balance, of at least $1,000,000, by wire
transfer to an account specified in writing by such Holder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or in all
other cases or if no such instructions have been delivered to the Indenture
Trustee, by check or money order to such Noteholder mailed to such Xxxxxx's
address as it appears in the Note Register.
No transfer, sale, pledge or other disposition of this Note
shall be made unless such disposition is exempt from the registration
requirements of the 1933 Act, and any applicable state securities laws or is
made in accordance with the 1933 Act and laws. In the event of any such
transfer, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Indenture Trustee, in
substantially the form attached as Exhibit D to the Indenture) under the 1933
Act, the Indenture Trustee and the Issuer shall require a written Opinion of
Counsel (which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Indenture Trustee and the Issuer that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuer or (ii) the Indenture Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached as
Exhibit F to the Indenture) and the transferee to execute an investment letter
(in substantially the form attached as Exhibit D to the Indenture) acceptable to
and in form and substance reasonably satisfactory to the Issuer and the
Indenture Trustee certifying to the Issuer and the Indenture Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Indenture Trustee or the Issuer. The Holder of this Note desiring to effect
a transfer shall, and does hereby agree to, indemnify the Indenture Trustee and
the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Note or any interest herein to a Plan
subject to ERISA or Section 4975 of the Code, any Person acting directly or
indirectly, on behalf of any such Plan or any Person using Plan Assets to
acquire this Note shall be made except in accordance with Section 4.02 of the
Indenture.
Each Holder of this Note will be deemed to have agreed to be
bound by the restrictions of the Indenture, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Note must be a Permitted Transferee, (ii) no Ownership Interest in this
Note may be transferred without delivery to the Indenture Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Indenture, (iii) each person holding or acquiring any Ownership Interest in this
Note must agree to require a transfer affidavit and to deliver a transfer
certificate to the Indenture Trustee as required pursuant to the Indenture, (iv)
each person holding or acquiring an Ownership Interest in this Note must agree
not to transfer an Ownership Interest in this Note if it has actual knowledge
that the proposed transferee is not a Permitted Transferee and (v) any attempted
or purported transfer of any Ownership Interest in this Note in violation of
such restrictions will be absolutely null and void and will vest no rights in
the purported transferee. Pursuant to the Indenture, the Indenture Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Note in violation of the restrictions mentioned above.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee, the Seller, the Servicer, the Depositor or the
Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign
of the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is
made upon this Note. The Indenture also permits the Issuer and the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of holders of the Notes issued thereunder but with
prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to make payments on this Note at the times,
place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for payments on this Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The holder of this Note by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-9
FORM OF CLASS R-4 NOTES
THIS NOTE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES
PERSON.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THIS CLASS R-4 NOTE WILL NOT BE ENTITLED TO PAYMENTS UNTIL
SUCH TIME AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS NOTE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN.
NO TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE
(A) TO ANY EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT ("PLAN") THAT
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS NOTE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, UNLESS
SUCH PLAN OR PERSON PROVIDES EITHER THE OPINION OF COUNSEL OR CERTIFICATION
DESCRIBED IN SECTION 2.04 OF THE INDENTURE REFERRED TO HEREIN.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-4
NOTE MAY BE MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES (1) AN AFFIDAVIT TO
THE NOTE REGISTRAR AND THE INDENTURE TRUSTEE THAT SUCH TRANSFEREE IS NOT (A) THE
UNITED STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF
ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREINAFTER
REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION AND (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX, AND (3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL
CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE
NOTWITHSTANDING THE REGISTRATION IN THE NOTE REGISTER OR ANY TRANSFER, SALE OR
OTHER DISPOSITION OF THIS CLASS R-4 NOTE TO A DISQUALIFIED ORGANIZATION OR AN
AGENT OF A DISQUALIFIED ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF
NO LEGAL FORCE OR EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
NOTE HOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE
RECEIPT OF DISTRIBUTIONS ON THIS NOTE. EACH HOLDER OF A CLASS R-4 NOTE BY
ACCEPTANCE OF THIS NOTE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF
THIS PARAGRAPH AND THE PROVISIONS OF SECTION 4.02 OF THE INDENTURE REFERRED TO
HEREIN. ANY PERSON THAT IS A DISQUALIFIED ORGANIZATION IS PROHIBITED FROM
ACQUIRING BENEFICIAL OWNERSHIP OF THIS CLASS R-4 NOTE.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class R-4 Percentage Interest: 50.00%
No. 1 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to
Xxxxx X. Xxxxxxxxxx or registered assigns, on each Payment Date all amount owed
this Class R-4 Note pursuant to Section 3.05 of the Indenture dated as of
December 14, 2001 (the "Indenture") between the Issuer, as Issuer, and U.S. Bank
National Association, as Indenture Trustee (the "Indenture Trustee").
Capitalized terms used but not defined herein are defined in Appendix A of the
Indenture.
Payments on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Notes are subject to all terms of the
Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or,
if any such date is not a Business Day, then the next Business Day.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes may declare the Note Balance
of all the notes to be due and payable immediately.
Payments on this Note due and payable on each Payment Date, to
the extent not in full payment of this Note, shall be made, if such Holder holds
Notes of an aggregate initial Note Balance, of at least $1,000,000, by wire
transfer to an account specified in writing by such Holder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or in all
other cases or if no such instructions have been delivered to the Indenture
Trustee, by check or money order to such Noteholder mailed to such Xxxxxx's
address as it appears in the Note Register.
No transfer, sale, pledge or other disposition of this Note
shall be made unless such disposition is exempt from the registration
requirements of the 1933 Act, and any applicable state securities laws or is
made in accordance with the 1933 Act and laws. In the event of any such
transfer, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Indenture Trustee, in
substantially the form attached as Exhibit D to the Indenture) under the 1933
Act, the Indenture Trustee and the Issuer shall require a written Opinion of
Counsel (which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Indenture Trustee and the Issuer that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuer or (ii) the Indenture Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached as
Exhibit F to the Indenture) and the transferee to execute an investment letter
(in substantially the form attached as Exhibit D to the Indenture) acceptable to
and in form and substance reasonably satisfactory to the Issuer and the
Indenture Trustee certifying to the Issuer and the Indenture Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Indenture Trustee or the Issuer. The Holder of this Note desiring to effect
a transfer shall, and does hereby agree to, indemnify the Indenture Trustee and
the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Note or any interest herein to a Plan
subject to ERISA or Section 4975 of the Code, any Person acting directly or
indirectly, on behalf of any such Plan or any Person using Plan Assets to
acquire this Note shall be made except in accordance with Section 4.02 of the
Indenture.
Each Holder of this Note will be deemed to have agreed to be
bound by the restrictions of the Indenture, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Note must be a Permitted Transferee, (ii) no Ownership Interest in this
Note may be transferred without delivery to the Indenture Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Indenture, (iii) each person holding or acquiring any Ownership Interest in this
Note must agree to require a transfer affidavit and to deliver a transfer
certificate to the Indenture Trustee as required pursuant to the Indenture, (iv)
each person holding or acquiring an Ownership Interest in this Note must agree
not to transfer an Ownership Interest in this Note if it has actual knowledge
that the proposed transferee is not a Permitted Transferee and (v) any attempted
or purported transfer of any Ownership Interest in this Note in violation of
such restrictions will be absolutely null and void and will vest no rights in
the purported transferee. Pursuant to the Indenture, the Indenture Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R-4
Note in violation of the restrictions mentioned above.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee, the Seller, the Servicer, the Depositor or the
Indenture Trustee on the Notes or under the Indenture or any certificate or
other writing delivered in connection therewith, against (i) the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign
of the Indenture Trustee or the Owner Trustee in its individual capacity, except
as any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is
made upon this Note. The Indenture also permits the Issuer and the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of holders of the Notes issued thereunder but with
prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to make payments on this Note at the times,
place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for payments on this Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The holder of this Note by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-4 Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-10
FORM OF CLASS IIA-1 NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IIA-1 Principal Amount: $20,387,000.00
No. 1 Percentage Interest: 100.00%
CUSIP No.12489 WE C4 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co. or registered assigns, the principal sum of $20,387,000.00, payable on
each Payment Date in an amount equal to the Percentage Interest specified above
of the aggregate amount, if any, payable from the Payment Account in respect of
principal on the Class IIA-1 Notes pursuant to Section 3.05 of the Indenture
dated as of December 14, 2001 (the "Indenture") between the Issuer, as Issuer,
and U.S. Bank National Association, as Indenture Trustee (the "Indenture
Trustee"); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the Payment Date in November 2033, to the
extent not previously paid on a prior Payment Date. Capitalized terms used but
not defined herein are defined in Appendix A of the Indenture.
Interest on the Class IIA-1 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. For each
Payment Date, the Note Rate for the Class IIA-1 Notes is the least of (i) LIBOR
as of the related LIBOR Determination Date, plus the Class IIA-1 Note Margin,
(ii) the Group II Pool Cap or (iii) the Maximum Note Rate. For each Payment
Date, the Note Margin for the Class IIA-1 Notes (i) on or prior to the Optional
Redemption Date for the Group II Mortgage Loans is 0.650% per annum and (ii)
following the Optional Redemption Date for the Group II Mortgage Loans is 1.300%
per annum. Interest on this Class IIA-1 Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid (in the case
of the first Payment Date, from the Closing Date) to but excluding such Payment
Date. Interest will be computed on the basis of the actual number of days in
each Interest Accrual Period and a year assumed to consist of 360 days.
Principal of and interest on this Class IIA- 1 Note shall be paid in the manner
specified in the Indenture.
Principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on December 26, 2001, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in November 2033 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, the Indenture Trustee or the holders of Notes representing not less
than a majority of the aggregate Note Balance of all Notes may declare the Note
Balance of all the notes to be due and payable immediately. All principal
payments on the Notes shall be made PRO RATA to the holders of Notes entitled
thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made, if such Holder holds Notes of
an aggregate initial Note Balance, of at least $1,000,000, by wire transfer to
an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check or
money order to such Noteholder mailed to such Xxxxxx's address as it appears in
the Note Register. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the
Notes issued thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IIA-1 Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-11
FORM OF CLASS IIM-1 NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS
IIA- 1 NOTES AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IIM-1 Principal Amount: $1,882,000.00
No. 1 Percentage Interest: 100.00%
CUSIP No.12489 WE D2 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co. or registered assigns, the principal sum of $1,882,000.00, payable on each
Payment Date in an amount equal to the Percentage Interest specified above of
the aggregate amount, if any, payable from the Payment Account in respect of
principal on the IIM-1 Notes pursuant to Section 3.05 of the Indenture dated as
of December 14, 2001 (the "Indenture") between the Issuer, as Issuer, and U.S.
Bank National Association, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Payment Date in November 2033, to the extent not
previously paid on a prior Payment Date. Capitalized terms used but not defined
herein are defined in Appendix A of the Indenture.
Interest on the IIM-1 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. For each
Payment Date, the Note Rate for the Class IIM-1 Notes is the least of (i) LIBOR
as of the related LIBOR Determination Date, plus the Class IIM-1 Note Margin,
(ii) the Group II Pool Cap or (iii) the Maximum Note Rate. For each Payment
Date, the Note Margin for the Class IIM-1 Notes (i) on or prior to the Optional
Redemption Date for the Group II Mortgage Loans is 1.250% per annum and (ii)
following the Optional Redemption Date for the Group II Mortgage Loans is 1.875%
per annum. Interest on this IIM-1 Note will accrue for each Payment Date from
the most recent Payment Date on which interest has been paid (in the case of the
first Payment Date, from the Closing Date) to but excluding such Payment Date.
Interest will be computed on the basis of the actual number of days in each
Interest Accrual Period and a year assumed to consist of 360 days. Principal of
and interest on this IIM-1 Note shall be paid in the manner specified in the
Indenture.
Principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on December 26, 2001, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in November 2033 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, the Indenture Trustee or the holders of Notes representing not less
than a majority of the aggregate Note Balance of all Notes may declare the Note
Balance of all the notes to be due and payable immediately. All principal
payments on the Notes shall be made PRO RATA to the holders of Notes entitled
thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made, if such Holder holds Notes of
an aggregate initial Note Balance, of at least $1,000,000, by wire transfer to
an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check or
money order to such Noteholder mailed to such Xxxxxx's address as it appears in
the Note Register. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the
Notes issued thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IIM-1 Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-12
FORM OF CLASS IIM-2 NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS
IIA- 1 AND CLASS IIM-1 NOTES AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IIM-2 Principal Amount: $3,136,000.00
No. 1 Percentage Interest: 100.00%
CUSIP No.12489 WE E0 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to Cede
& Co. or registered assigns, the principal sum of $3,136,000.00, payable on each
Payment Date in an amount equal to the Percentage Interest specified above of
the aggregate amount, if any, payable from the Payment Account in respect of
principal on the IIM-2 Notes pursuant to Section 3.05 of the Indenture dated as
of December 14, 2001 (the "Indenture") between the Issuer, as Issuer, and U.S.
Bank National Association, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Payment Date in November 2033, to the extent not
previously paid on a prior Payment Date. Capitalized terms used but not defined
herein are defined in Appendix A of the Indenture.
Interest on the IIM-2 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. For each
Payment Date, the Note Rate for the Class IIM-2 Notes is the least of (i) LIBOR
as of the related LIBOR Determination Date, plus the Class IIM-2 Note Margin,
(ii) the Group II Pool Cap or (iii) the Maximum Note Rate. For each Payment
Date, the Note Margin for the Class IIM-2 Notes (i) on or prior to the Optional
Redemption Date for the Group II Mortgage Loans is 1.650% per annum and (ii)
following the Optional Redemption Date for the Group II Mortgage Loans is 2.475%
per annum. Interest on this IIM-2 Note will accrue for each Payment Date from
the most recent Payment Date on which interest has been paid (in the case of the
first Payment Date, from the Closing Date) to but excluding such Payment Date.
Interest will be computed on the basis of the actual number of days in each
Interest Accrual Period and a year assumed to consist of 360 days. Principal of
and interest on this IIM-2 Note shall be paid in the manner specified in the
Indenture.
Principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on December 26, 2001, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in November 2033 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, the Indenture Trustee or the holders of Notes representing not less
than a majority of the aggregate Note Balance of all Notes may declare the Note
Balance of all the notes to be due and payable immediately. All principal
payments on the Notes shall be made PRO RATA to the holders of Notes entitled
thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made, if such Holder holds Notes of
an aggregate initial Note Balance, of at least $1,000,000, by wire transfer to
an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check or
money order to such Noteholder mailed to such Xxxxxx's address as it appears in
the Note Register. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the
Notes issued thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IIM-2 Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-13
FORM OF CLASS IIB-1 NOTES
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS
IIA- 1, CLASS IIM-1 AND CLASS IIM-2 NOTES AS DESCRIBED IN THE INDENTURE REFERRED
TO HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IIB-1 Principal Amount: $2,039,000.00
No. 1 Percentage Interest: 100.00%
CUSIP No.12489 WE F7 Note Rate: Variable
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust duly
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to Cede & Co. or
registered assigns, the principal sum of $2,039,000.00, payable on each Payment
Date in an amount equal to the Percentage Interest specified above of the
aggregate amount, if any, payable from the Payment Account in respect of
principal on the IIB-1 Notes pursuant to Section 3.05 of the Indenture dated as
of December 14, 2001 (the "Indenture") between the Issuer, as Issuer, and U.S.
Bank National Association, as Indenture Trustee (the "Indenture Trustee");
provided, however, that the entire unpaid principal amount of this Note shall be
due and payable on the Payment Date in November 2033, to the extent not
previously paid on a prior Payment Date. Capitalized terms used but not defined
herein are defined in Appendix A of the Indenture.
Interest on the IIB-1 Notes will be paid monthly on each
Payment Date at the Note Rate for the related Interest Accrual Period. For each
Payment Date, the Note Rate for the Class IIB- 1 Notes is the least of (i) LIBOR
as of the related LIBOR Determination Date, plus the Class IIB-1 Note Margin,
(ii) the Group II Pool Cap or (iii) Maximum Note Rate. For each Payment Date,
the Note Margin for the Class IIB-1 Notes (i) on or prior to the Optional
Redemption Date for the Group II Mortgage Loans is 2.400% per annum and (ii)
following the Optional Redemption Date for the Group II Mortgage Loans is 3.600%
per annum. Interest on this IIB-1 Note will accrue for each Payment Date from
the most recent Payment Date on which interest has been paid (in the case of the
first Payment Date, from the Closing Date) to but excluding such Payment Date.
Interest will be computed on the basis of the actual number of days in each
Interest Accrual Period and a year assumed to consist of 360 days. Principal of
and interest on this IIB-1 Note shall be paid in the manner specified in the
Indenture.
Principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the holders of the Notes.
The Notes are subject to all terms of the Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
Principal of and interest on this Note will be payable on each
Payment Date, commencing on December 26, 2001, as described in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or, if any such date is
not a Business Day, then the next Business Day.
The entire unpaid principal amount of this Note shall be due
and payable in full on the Payment Date in November 2033 pursuant to the
Indenture, to the extent not previously paid on a prior Payment Date.
Notwithstanding the foregoing, if an Event of Default shall have occurred and be
continuing, the Indenture Trustee or the holders of Notes representing not less
than a majority of the aggregate Note Balance of all Notes may declare the Note
Balance of all the notes to be due and payable immediately. All principal
payments on the Notes shall be made PRO RATA to the holders of Notes entitled
thereto.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made, if such Holder holds Notes of
an aggregate initial Note Balance, of at least $1,000,000, by wire transfer to
an account specified in writing by such Holder reasonably satisfactory to the
Indenture Trustee as of the preceding Record Date or in all other cases or if no
such instructions have been delivered to the Indenture Trustee, by check or
money order to such Noteholder mailed to such Xxxxxx's address as it appears in
the Note Register. Any reduction in the principal amount of this Note (or any
one or more Predecessor Notes) effected by any payments made on any Payment Date
shall be binding upon all future holders of this Note and of any Note issued
upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not noted hereon. If funds are expected to be available, as
provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Registered Holder hereof as of the Record Date preceding such Payment Date by
notice mailed or transmitted by facsimile prior to such Payment Date, and the
amount then due and payable shall be payable only upon presentation and
surrender of this Note at the address specified in such notice of final payment.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the Corporate Trust Office.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the
Indenture or any certificate or other writing delivered in connection therewith,
against (i) the Indenture Trustee or the Owner Trustee in its individual
capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any
partner, owner, beneficiary, agent, officer, director or employee of the
Indenture Trustee or the Owner Trustee in its individual capacity, any holder of
a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
its individual capacity, except as any such Person may have expressly agreed and
except that any such partner, owner or beneficiary shall be fully liable, to the
extent provided by applicable law for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar law in connection
with any obligations relating to the Notes, the Indenture or the Basic
Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the
Notes issued thereunder but with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for, the payment of principal of or interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The holder of this Note by its
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the holder
shall have no claim against any of the foregoing for any deficiency, loss or
claim therefrom; PROVIDED, HOWEVER, that nothing contained herein shall be taken
to prevent recourse to, and enforcement against, the assets of the Issuer for
any and all liabilities, obligations and undertakings contained in the Indenture
or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IIB-1 Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-14
FORM OF CLASS IIX NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS
IIA- 1, CLASS IIM-1, CLASS IIM-2, CLASS IIB-1 AND CLASS IIN NOTES AS DESCRIBED
IN THE INDENTURE REFERRED TO HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THIS CLASS IIX NOTE WILL NOT BE ENTITLED TO PAYMENTS UNTIL
SUCH TIME AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF ANY STATE. ANY
RESALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH REGISTRATION OR
QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION
4.02 OF THE INDENTURE REFERRED TO HEREIN.
NO TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE
(A) TO ANY EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT ("PLAN") THAT
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS NOTE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, UNLESS
SUCH PLAN OR PERSON PROVIDES EITHER THE OPINION OF COUNSEL OR CERTIFICATION
DESCRIBED IN SECTION 2.04 OF THE INDENTURE REFERRED TO HEREIN.
XXXXXXX MORTGAGE LOAN TRUST, SERIES 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IIX Percentage Interest: 100.00%
No. 1
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to
Credit-Based Asset Servicing and Securitization LLC or registered assigns, on
each Payment Date all amount owed this Class IIX Note pursuant to Section 3.05
of the Indenture dated as of December 14, 2001 (the "Indenture") between the
Issuer, as Issuer, and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee"). Capitalized terms used but not defined herein are defined
in Appendix A of the Indenture.
Payments on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Notes are subject to all terms of the
Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or,
if any such date is not a Business Day, then the next Business Day.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes may declare the Note Balance
of all the notes to be due and payable immediately.
Payments on this Note due and payable on each Payment Date, to
the extent not in full payment of this Note, shall be made, if such Holder holds
Notes of an aggregate initial Note Balance, of at least $1,000,000, by wire
transfer to an account specified in writing by such Holder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or in all
other cases or if no such instructions have been delivered to the Indenture
Trustee, by check or money order to such Noteholder mailed to such Xxxxxx's
address as it appears in the Note Register.
No transfer, sale, pledge or other disposition of this Note
shall be made unless such disposition is exempt from the registration
requirements of the 1933 Act, and any applicable state securities laws or is
made in accordance with the 1933 Act and laws. In the event of any such
transfer, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Indenture Trustee, in
substantially the form attached as Exhibit D to the Indenture) under the 1933
Act, the Indenture Trustee and the Issuer shall require a written Opinion of
Counsel (which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Indenture Trustee and the Issuer that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuer or (ii) the Indenture Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached as
Exhibit F to the Indenture) and the transferee to execute an investment letter
(in substantially the form attached as Exhibit D to the Indenture) acceptable to
and in form and substance reasonably satisfactory to the Issuer and the
Indenture Trustee certifying to the Issuer and the Indenture Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Indenture Trustee or the Issuer. The Holder of this Note desiring to effect
a transfer shall, and does hereby agree to, indemnify the Indenture Trustee and
the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Note or any interest herein to a Plan
subject to ERISA or Section 4975 of the Code, any Person acting directly or
indirectly, on behalf of any such Plan or any Person using Plan Assets to
acquire this Note shall be made except in accordance with Section 4.02 of the
Indenture.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against the Depositor, the Seller, the Servicer, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings
under any United States federal or state bankruptcy or similar
law in connection with any obligations relating to the Notes, the Indenture or
the Basic Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder but
with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and remedies of the parties hereunder and
thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to make payments on this Note at the times,
place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for payments on this Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The holder of this Note by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IIX Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT A-15
FORM OF CLASS IIN NOTES
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS
IIA- 1, CLASS IIM-1, CLASS IIM-2 AND CLASS IIB-1 NOTES AS DESCRIBED IN THE
INDENTURE REFERRED TO HEREIN.
THIS NOTE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE SERVICER, THE INDENTURE TRUSTEE OR THE OWNER
TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY PROVIDED IN
THE INDENTURE OR THE BASIC DOCUMENTS.
THIS CLASS IIN NOTE WILL NOT BE ENTITLED TO PAYMENTS UNTIL
SUCH TIME AS DESCRIBED IN THE INDENTURE REFERRED TO HEREIN.
THIS NOTE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES LAWS OF
ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS NOTE WITHOUT SUCH
REGISTRATION OR QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION THAT DOES NOT
REQUIRE SUCH REGISTRATION OR QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS
OF SECTION 4.02 OF THE INDENTURE REFERRED TO HEREIN.
NO TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE
(A) TO ANY EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT ("PLAN") THAT
IS SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA"), OR THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR (B)
TO ANY PERSON WHO IS DIRECTLY OR INDIRECTLY PURCHASING THIS NOTE OR SUCH
INTEREST HEREIN ON BEHALF OF, AS NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH
ASSETS OF ANY SUCH EMPLOYEE BENEFIT PLAN OR OTHER RETIREMENT ARRANGEMENT, UNLESS
SUCH PLAN OR PERSON PROVIDES EITHER THE OPINION OF COUNSEL OR CERTIFICATION
DESCRIBED IN SECTION 2.04 OF THE INDENTURE REFERRED TO HEREIN.
XXXXXXX MORTGAGE LOAN TRUST 2001-CB4
C-Bass Mortgage Loan Asset-Backed Note
Class IIN Notional Amount: $2,800,000.00
No. 1 Percentage Interest: 100.00%
Note Rate: 10.00%
Salomon Mortgage Loan Trust, Series 2001-CB4, a business trust
duly organized and existing under the laws of the State of Delaware (herein
referred to as the "Issuer"), for value received, hereby promises to pay to
Credit-Based Asset Servicing and Securitization LLC or registered assigns, on
each Payment Date all amount owed this Class IIN Note pursuant to Section 3.05
of the Indenture dated as of December 14, 2001 (the "Indenture") between the
Issuer, as Issuer, and U.S. Bank National Association, as Indenture Trustee (the
"Indenture Trustee"). Capitalized terms used but not defined herein are defined
in Appendix A of the Indenture.
Payments on this Note are payable in such coin or currency of
the United States of America as at the time of payment is legal tender for
payment of public and private debts.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its C-Bass Mortgage Loan Asset-Backed Notes (herein called
the "Notes"), all issued under the Indenture, to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights and obligations thereunder of the Issuer, the Indenture
Trustee and the holders of the Notes. The Notes are subject to all terms of the
Indenture.
The Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture.
"Payment Date" means the twenty-fifth day of each month, or,
if any such date is not a Business Day, then the next Business Day.
If an Event of Default shall have occurred and be continuing,
the Indenture Trustee or the holders of Notes representing not less than a
majority of the aggregate Note Balance of all Notes may declare the Note Balance
of all the notes to be due and payable immediately.
Payments on this Note due and payable on each Payment Date, to
the extent not in full payment of this Note, shall be made, if such Holder holds
Notes of an aggregate initial Note Balance, of at least $1,000,000, by wire
transfer to an account specified in writing by such Holder reasonably
satisfactory to the Indenture Trustee as of the preceding Record Date or in all
other cases or if no such instructions have been delivered to the Indenture
Trustee, by check or money order to
such Noteholder mailed to such Xxxxxx's address as it appears in the Note
Register.
No transfer, sale, pledge or other disposition of this Note
shall be made unless such disposition is exempt from the registration
requirements of the 1933 Act, and any applicable state securities laws or is
made in accordance with the 1933 Act and laws. In the event of any such
transfer, (i) unless such transfer is made in reliance upon Rule 144A (as
evidenced by the investment letter delivered to the Indenture Trustee, in
substantially the form attached as Exhibit D to the Indenture) under the 1933
Act, the Indenture Trustee and the Issuer shall require a written Opinion of
Counsel (which may be in-house counsel) acceptable to and in form and substance
reasonably satisfactory to the Indenture Trustee and the Issuer that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall not be an expense of the Indenture
Trustee or the Issuer or (ii) the Indenture Trustee shall require the transferor
to execute a transferor certificate (in substantially the form attached as
Exhibit F to the Indenture) and the transferee to execute an investment letter
(in substantially the form attached as Exhibit D to the Indenture) acceptable to
and in form and substance reasonably satisfactory to the Issuer and the
Indenture Trustee certifying to the Issuer and the Indenture Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Indenture Trustee or the Issuer. The Holder of this Note desiring to effect
a transfer shall, and does hereby agree to, indemnify the Indenture Trustee and
the Issuer against any liability that may result if the transfer is not so
exempt or is not made in accordance with such federal and state laws.
No transfer of this Note or any interest herein to a Plan
subject to ERISA or Section 4975 of the Code, any Person acting directly or
indirectly, on behalf of any such Plan or any Person using Plan Assets to
acquire this Note shall be made except in accordance with Section 4.02 of the
Indenture.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note, or, in the case of a Beneficial Owner of a Note, a beneficial interest in
a Note, covenants and agrees that no recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee,
the Seller, the Servicer, the Depositor or the Indenture Trustee on the Notes or
under the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed and except that any such partner, owner or beneficiary shall be
fully liable, to the extent provided by applicable law for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each holder or Beneficial Owner of a Note, by acceptance of a
Note or, in the case of a Beneficial Owner of a Note, a beneficial interest in a
Note, covenants and agrees by accepting the benefits of the Indenture that such
holder or Beneficial Owner of a Note will not at any time institute against the
Depositor, the Seller, the Servicer, or the Issuer, or join in any institution
against
the Depositor, the Seller, the Servicer, or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under any
United States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Indenture or the Basic Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, state and local income, single
business and franchise tax purposes, the Notes will qualify as indebtedness of
the Issuer. Each holder of a Note, by acceptance of a Note (and each Beneficial
Owner of a Note by acceptance of a beneficial interest in a Note), agrees to
treat the Notes for federal, state and local income, single business and
franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note is registered (as
of the day of determination or as of such other date as may be specified in the
Indenture) as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the Indenture Trustee and the rights of the
holders of the Notes under the Indenture at any time by the Issuer and the
Indenture Trustee with the consent of the holders of Notes representing a
majority of the aggregate Note Balance of all Notes at the time Outstanding and
with prior notice to the Rating Agencies. The Indenture also contains provisions
permitting the Holders of Notes with a majority of the Voting Rights to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the holder of this Note (or any one of more Predecessor Notes) shall
be conclusive and binding upon such holder and upon all future holders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Issuer and the
Indenture Trustee to amend or waive certain terms and conditions set forth in
the Indenture without the consent of holders of the Notes issued thereunder but
with prior notice to the Rating Agencies.
The term "Issuer" as used in this Note includes any successor
or the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the holders of Notes under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions and the obligations, rights and
remedies of the parties hereunder and thereunder shall be determined in
accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair, the obligation of the Issuer,
which is absolute and unconditional, to make payments on this Note at the times,
place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of Wilmington Trust Company in
its individual capacity, U.S. Bank National Association, in its individual
capacity, any owner of a beneficial interest in the Issuer, or any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for, nor shall recourse be had
to any of them for payments on this Note or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in the
Indenture. The holder of this Note by its acceptance hereof agrees that, except
as expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; PROVIDED, HOWEVER, that nothing
contained herein shall be taken to prevent recourse to, and enforcement against,
the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer
and not in its individual capacity, has caused this Note to be duly executed.
XXXXXXX MORTGAGE LOAN TRUST, SERIES
2001-CB4
By WILMINGTON TRUST COMPANY, not in
its individual capacity but solely
as Owner Trustee
Dated: December __, 2001
By_________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class IIN Notes referred to in the within
mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION,
not in its individual capacity but
solely as Indenture Trustee
Dated: December __, 2001
By________________________________
Authorized Signatory
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
________________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer
unto ___________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints __________________________________________________________________,
attorney, to transfer said Note on the books kept for registration thereof, with
full power of substitution in the premises.
Dated: ____________ _____________________________*/
Signature Guaranteed:
____________________________/ *
--------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar, which
requirements include membership or participation in STAMP or such other
"signature guarantee program" as may be determined by the Note
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
EXHIBIT B-1
FORM OF TRUSTEE'S INITIAL CERTIFICATION
Date
Salomon Mortgage Loan Trust, Series 2001-CB4
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: Indenture (the "Indenture"), dated as of December 14, 2001
between Salomon Mortgage Loan Trust, Series 2001-CB4 as Issuer
and U.S. Bank National Association as Indenture Trustee with
respect to C-BASS Mortgage Loan Asset-Backed Notes.
Ladies and Gentlemen:
In accordance with Section 2.04 of the Indenture, the undersigned, as
Indenture Trustee, hereby certifies that it received confirmation from the
Custodian that the Custodian has received the documents listed in Section 2.03
of the Indenture for each Mortgage File pertaining to each Mortgage Loan listed
on Schedule A to the Mortgage Loan Purchase Agreement, subject to any exceptions
noted on Schedule I hereto.
Capitalized words and phrases used herein and not otherwise defined
herein shall have the respective meanings assigned to them in Appendix A to the
Indenture|. This Certificate is subject in all respects to the terms of Section
2.04 of the Indenture and the Indenture sections cross- referenced therein.
U.S. BANK NATIONAL ASSOCIATION
By:_______________________________
Name:
Title:
EXHIBIT B-2
FORM OF TRUSTEE'S FINAL CERTIFICATION
Date
Salomon Mortgage Loan Trust, Series 2001-CB4
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: Indenture (the "Indenture"), dated as of December 14, 2001
between Salomon Mortgage Loan Trust, Series 2001-CB4 as Issuer
and U.S. Bank National Association as Indenture Trustee with
respect to C-BASS Mortgage Loan Asset-Backed Notes.
Ladies and Gentlemen:
In accordance with Section 2.04 of the Indenture, the undersigned, as
Indenture Trustee, hereby certifies that as to each Mortgage Loan listed in the
Mortgage Loan Schedule (other than any Mortgage Loan paid in full or listed on
Schedule I hereto) it received confirmation from the Custodian that the
Custodian has received the applicable documents listed in Section 2.03 of the
Indenture.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedule, other than any Mortgage Loan listed on
Schedule I hereto, it has reviewed the documents listed above and has determined
that each such document appears to be complete and, based on an examination of
such documents, the information set forth in the Mortgage Loan Schedule is
correct.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in Appendix A to the Indenture. This Certificate is
qualified in all respects by the terms of said Indenture.
U.S. BANK NATIONAL ASSOCIATION
By:_______________________________
Name:
Title:
EXHIBIT B-3
FORM OF RECEIPT OF MORTGAGE NOTE
Salomon Mortgage Loan Trust, Series 2001-CB4
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: C-BASS Mortgage Loan Asset-Backed Notes, Series 2001-CB4
Ladies and Gentlemen:
Pursuant to Section 2.03 of the Indenture, dated as of December 14,
2001 between Salomon Mortgage Loan Trust, Series 2001-CB4 as Issuer and U.S.
Bank National Association as Indenture Trustee, we hereby acknowledge the
receipt of the original Mortgage Note (a copy of which is attached hereto as
Exhibit 1) with any exceptions thereto listed on Exhibit 2.
U.S. BANK NATIONAL ASSOCIATION
By:_______________________________
Name:
Title:
EXHIBIT C
FORM OF ERISA REPRESENTATION
Salomon Mortgage Loan Trust, Series 2001-CB4
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: C-BASS Mortgage Loan Asset-Backed Notes, Series 2001-CB4
Ladies and Gentlemen:
1. The undersigned is the _______________ of (the "Transferee") a
[corporation duly organized] and existing under the laws of __________ , on
behalf of which he makes this affidavit.
2. The Transferee hereby acknowledges that under the terms of the
Indenture, dated as of December 14, 2001 (the "Agreement"), between Salomon
Mortgage Loan Trust, Series 2001-CB4 as Issuer and U.S. Bank National
Association as Indenture Trustee, no transfer of the ERISA- Restricted Notes
shall be permitted to be made to any person unless the Issuer and Indenture
Trustee have received a certificate from such transferee in the form hereof.
3. The Transferee either (x) is not an employee benefit plan subject to
Section 406 or Section 407 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), the Indenture Trustee of any such plan or a
person acting on behalf of any such plan nor a person using the assets of any
such plan or (y) shall deliver to the Indenture Trustee or the Issuer an opinion
of counsel (a "Benefit Plan Opinion") satisfactory to the Indenture Trustee and
the Issuer, and upon which the Indenture Trustee, the Issuer and the Depositor
shall be entitled to rely, to the effect that the purchase or holding of such
Note by the Transferee will not result in the assets of the Trust Estate being
deemed to be plan assets and subject to the prohibited transaction provisions of
ERISA or the Code and will not subject the Indenture Trustee or the Issuer to
any obligation in addition to those undertaken by such entities in the
Indenture, which opinion of counsel shall not be an expense of the Indenture
Trustee or the Issuer.
Capitalized terms used but not defined herein shall have the meanings
ascribed to such terms in the Agreement.
IN WITNESS WHEREOF, the Transferee has executed this certificate.
[Transferee]
By:_____________________
Name:
Title:
EXHIBIT D
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Salomon Mortgage Loan Trust, Series 2001-CB4
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: C-BASS Mortgage Loan Asset Backed Notes, Series 2001-CB4
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan Asset
Backed Notes, Series 2001-CB4 (the "Notes"), we certify that (a) we understand
that the Notes are not being registered under the Securities Act of 1933, as
amended (the "Act"), or any state securities laws and are being transferred to
us in a transaction that is exempt from the registration requirements of the Act
and any such laws, (b) we are an "accredited investor," as defined in Regulation
D under the Act, and have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks of
investments in the Notes, (c) we have had the opportunity to ask questions of
and receive answers from the Issuer concerning the purchase of the Notes and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Notes, (d) we are not an employee benefit plan that is
subject to the Employee Retirement Income Security Act of 1974, as amended, or a
plan that is subject to Section 4975 of the Internal Revenue Code of 1986, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Notes for investment for our own account and not with a view to any distribution
of such Certificates (but without prejudice to our right at all times to sell or
otherwise dispose of the Notes in accordance with clause (g) below), (f) we have
not offered or sold any Notes to, or solicited offers to buy any Notes from, any
person, or otherwise approached or negotiated with any person with respect
thereto, or taken any other action which would result in a violation of Section
5 of the Act, and (g) we will not sell, transfer or otherwise dispose of any
Notes unless (1) such sale, transfer or other disposition is made pursuant to an
effective registration statement under the Act or is exempt from such
registration requirements, and if requested, we will at our expense provide an
opinion of counsel satisfactory to the addressees of this Note that such sale,
transfer or other disposition may be made pursuant to an exemption from the Act,
(2) the purchaser or transferee of such Note has executed and delivered to you a
certificate to substantially the same effect as this certificate, and (3) the
purchaser or transferee has otherwise complied with any conditions for transfer
set forth in the
Indenture.
Very truly yours,
[NAME OF TRANSFEREE]
By:______________________
Authorized Officer
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Salomon Mortgage Loan Trust, Series 2001-CB4
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
U.S. Bank National Association
000 Xxxx Xxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000
Re: C-BASS Mortgage Loan Asset Backed Notes, Series 2001-CB4
Ladies and Gentlemen:
In connection with our acquisition of the C-BASS Mortgage Loan Asset
Backed Notes, Series 2001-CB4 (the "Certificates"), we certify that (a) we
understand that the Notes are not being registered under the Securities Act of
1933, as amended (the "Act"), or any state securities laws and are being,
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we have had the opportunity to
ask questions of and receive answers from the Depositor concerning the purchase
of the Notes and all matters relating thereto or any additional information
deemed necessary to our decision to purchase the Notes, (c) we are not an
employee benefit plan that is subject to the Employee Retirement Income Security
Act of 1974, as amended, or a plan that is subject to Section 4975 of the
Internal Revenue Code of 1986, as amended, nor are we acting on behalf of any
such plan, (d) we have not, nor has anyone acting on our behalf offered,
transferred, pledged, sold or otherwise disposed of the Notes, any interest in
the Notes or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Notes, any interest in the
Notes or any other similar security from, or otherwise approached or negotiated
with respect to the Notes, any interest in the Notes or any other similar
security with, any person in any manner, or made any general solicitation by
means of general advertising or in any other manner, or taken any other action,
that would constitute a distribution of the Notes under the Securities Act or
that would render the disposition of the Notes a violation of Section 5 of the
Securities Act or require registration pursuant thereto, nor will act, nor has
authorized or will authorize any person to act, in such manner with respect to
the Notes, (e) we are a "qualified institutional buyer" as that term is defined
in Rule 144A under the Securities Act and have completed either of the forms of
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Notes for our own account or for resale pursuant to Rule 144A and further,
understand that such Notes may be resold, pledged or transferred only (i) to a
person reasonably believed to be a qualified institutional buyer that purchases
for its own account or for the account of a qualified institutional buyer to
whom notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (ii) pursuant to another exemption from registration
under the Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:_____________________
Authorized Officer
ANNEX 1 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Notes described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $________ in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than
a bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
____ Bank. The Buyer (a) is a national bank or banking
institution organized under the laws of any State, territory
or the District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar official or
is a foreign bank or equivalent institution, and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is
supervised and examined by a State or Federal authority having
supervision over any such institutions or is a foreign savings
and loan association or equivalent institution and (b) has an
audited net worth of at least $25,000,000 as demonstrated in
its latest annual financial statements, a copy of which is
attached hereto.
_____ Broker-dealer. The Buyer is a dealer registered pursuant
to Section 15 of the Securities Exchange Act of 1934.
____ Insurance Company. The Buyer is an insurance company
whose primary and predominant business activity is the writing
of insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by the
insurance commissioner or a similar official or agency of a
State, territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
____ ERISA Plan. The Buyer is an employee benefit plan within
the meaning of Title I of the Employee Retirement Income
Security Act of 1974.
____ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
____ Small Business Investment Company. Buyer is a small
business investment company licensed by the U.S. Small
Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
____ Business Development Company. Buyer is a business
development company as defined in Section 202(a)(22) of the
Investment Advisors Act of 1940.
iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
iv. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.
v. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Notes are
relying and will continue to rely on the statements made herein because one or
more sales to the Buyer may be in reliance on Rule 144A.
vi. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of
the patties to which this certification is made of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Notes will constitute a reaffirmation of this certification as
of the date of such purchase. In addition, if the Buyer is a bank or savings and
loan is provided above, the Buyer agrees that it will furnish to such parties
updated annual financial statements promptly after they become available.
-------------------------
Print Name of Buyer
By:______________________
Name:
Title:
Date:______________________
ANNEX 2 TO EXHIBIT J
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Notes described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.
____ Buyer owned $_______ in securities (other than the
excluded securities referred to below) as of the end of the
Buyer's most recent fiscal year (such amount being calculated
in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies
which owned in the aggregate $______ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements, (vi) securities owned but
subject to a repurchase agreement and (vii) currency, interest rate and
commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Notes, the undersigned will notify
the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Notes will constitute a
reaffirmation of this certification by the undersigned as of the date of such
purchase.
-------------------------
Print Name of Buyer or Adviser
By:_________________________
Name:
Title:
IF AN ADVISER:
-------------------------
Print Name of Buyer
Date: ____________________
EXHIBIT E
FORM OF CLASS R AND CLASS R-4 NOTE TRANSFER AFFIDAVIT
C-BASS MORTGAGE LOAN ASSET-BACKED NOTES, SERIES 2001-CB4
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of ____________, the proposed
Transferee of an Ownership Interest in a Class [R][R-4] Note (the "Note") issued
pursuant to the Indenture, (the "Agreement"), relating to the above-referenced
Notes, between Salomon Mortgage Loan Trust, Series 2001-CB4 as issuer and U.S.
Bank National Association as Indenture Trustee (the "Indenture Trustee").
Capitalized terms used, but not defined herein shall have the meanings ascribed
to such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of the
date of the Transfer, a Permitted Transferee. The Transferee is acquiring its
Ownership Interest in the Note either (i) for its own account or (ii) as
nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a tax
will be imposed on Transfers of the Note to Persons that are not Permitted
Transferees; (ii) such tax will be imposed on the transferor, or, if such
Transfer is through an agent (which includes a broker, nominee or middleman) for
a Person that is not a Permitted Transferee, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent Transferee furnished to such Person an affidavit that such subsequent
Transferee is a Permitted Transferee and, at the time of Transfer, such Person
does not have actual knowledge that the affidavit is false.
4. The Transferee has been advised of, and understands that a tax will
be imposed on a "pass-through entity" holding the Note if at any time during the
taxable year of the pass-through entity a Person that is not a Permitted
Transferee is the record holder of an interest in such entity. The Transferee
understands that such tax will not be imposed for any period with respect to
which the record holder furnishes to the pass-through entity an affidavit that
such record holder is a Permitted Transferee and the pass-through entity does
not have actual knowledge that such affidavit is false. (For this purpose, a
"pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as a nominee for another
Person.)
5. The Transferee has reviewed the provisions of Section 4.02 of the
Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Note including, without limitation, the restrictions
on subsequent Transfers and the provisions regarding voiding the Transfer and
mandatory sales. The Transferee expressly agrees to be bound by and to abide by
the provisions of Section 4.02 of the Agreement and the restrictions noted on
the face of the Note. The Transferee understands and agrees that any breach of
any of the representations included herein shall render the Transfer to the
Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Note, and in connection with any Transfer by a Person for whom the Transferee is
acting as nominee, trustee or agent, and the Transferee will not Transfer its
Ownership Interest or cause any Ownership Interest to be Transferred to any
Person that the Transferee knows is not a Permitted Transferee. In connection
with any such Transfer by the Transferee, the Transferee agrees to deliver to
the Trustee a certificate substantially in the form set forth in this Exhibit E
to the Agreement (a "Transferor Certificate") to the effect that such Transferee
has no actual knowledge that the Person to which the Transfer is to be made is
not a Permitted Transferee.
7. The Transferee does not have the intention to impede the assessment
or collection of any tax legally required to be paid with respect to the Note.
8. The Transferee's taxpayer identification number is ________.
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Note may be a "noneconomic
residual interest" within the meaning of proposed Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. The Transferee is not an employee benefit plan that is subject to
ERISA or a plan that is subject to Section 4975 of the Code, nor are we acting
on behalf of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this ___ day of _____________, 20__.
[NAME OF TRANSFEREE]
By:_______________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named ________, known or proved to me to
be the same person who executed the foregoing instrument and to be the
_____________ of the Transferee, and acknowledged that he executed the same as
his free act and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ___ day of , 20_____.
--------------------------------------
NOTARY PUBLIC
My Commission expires the ___
day of __________, 20__.
EXHIBIT F
FORM OF TRANSFEROR CERTIFICATE
[DATE]
Salomon Mortgage Loan Trust, Series 2001-CB4
c/o Wilmington Trust Company
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: C-BASS Mortgage Loan Asset Backed Notes, Series 2001-CB4
Ladies and Gentlemen:
In connection with our disposition of the C-BASS Mortgage Loan Asset
Backed Notes, Series 2001-CB4 (the "Notes"), we certify that (a) we understand
that the Notes have not been registered under the Securities Act of 1933, as
amended (the "Act"), and are being disposed by us in a transaction that is
exempt from the registration requirements of the Act, (b) we have not offered or
sold any Notes to, or solicited offers to buy any Notes from, any person, or
otherwise approached or negotiated with any person with respect thereto, in a
manner that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act, (c) to the extent we are disposing of a Class
[ ] Notes, we have no knowledge the Transferee is not a Permitted Transferee and
(d) no purpose of the proposed disposition of a Class [ ] Notes is to impede the
assessment or collection of tax.
Very truly yours,
[----------------------]
By:_____________________
EXHIBIT G
FORM OF LIQUIDATION REPORT
EXHIBIT H
FORM OF CAP CONTRACT
EXHIBIT I
FORM OF CAP CONTRACT PLEDGE AGREEMENT
APPENDIX A
DEFINITIONS
Many of the defined terms listed below may apply to both Loan
Groups and are sometimes used in the Indenture to refer to a particular Loan
Group by the adjectival use of the words "Group 1" and "Group 2."
"1933 Act": The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan": Each Mortgage Loan with respect to
which any portion of a Monthly Payment is, as of the last day of the prior
Collection Period, two months or more past due, each Mortgage Loan in
foreclosure, all REO Property and each Mortgage Loan for which the Mortgagor has
filed for bankruptcy after the Closing Date. Any Re-Performing 60+ Day
Delinquent Loan will not be deemed to be a 60+ Day Delinquent Loan, except for
any such Re-Performing 60+ Day Delinquent Loan which exceed 10% of the Principal
Balance of the Mortgage Loans in the related Loan Group.
"Account": Any of the Collection Account, Excess Reserve Fund
Account and Payment Account.
"Accrued Note Interest": With respect to each Payment Date and
Class of Notes, an amount equal to the interest accrued at the applicable rate
set forth or described opposite such Class in the table set forth in the
Indenture during the related Interest Accrual Period on the Note Balance (or
Notional Amount) of such Class of Notes, reduced, in the case of the Group I
Notes, by such Class's Interest Percentage of Relief Act Interest Shortfalls for
such Payment Date.
"Actuarial Mortgage Loan": Any Mortgage Loan other than a
Simple Interest Mortgage Loan.
"Adjustment Date": With respect to each adjustable-rate
Mortgage Loan, each adjustment date, on which the Mortgage Rate of such
adjustable-rate Mortgage Loan changes pursuant to the related Mortgage Note. The
first Adjustment Date following the Cut-Off Date as to each adjustable-rate
Mortgage Loan is set forth in the Mortgage Loan Schedule.
"Administration Agreement": The administration agreement,
dated as of the date hereof, among the Issuer and the Administrators, pursuant
to which the Administrators shall perform various obligations of the Issuer
hereunder and of the Issuer and the Owner Trustee under the Trust Agreement.
"Administrator": Each Person acting as an Administrator from
time to time under the Administration Agreement, which initially shall be U.S.
Bank National Association and Credit- Based Asset Servicing and Securitization
LLC.
"Advance": As to any first lien Actuarial Mortgage Loan, any
advance made by the Servicer in respect of any Payment Date pursuant to Section
4.01 of the Servicing Agreement.
"Adverse REMIC Event": As defined in Section 10.01(f) of the
Indenture.
"Affiliate": With respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition, "control" means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of
voting securities, by contract or otherwise and "controlling" and "controlled"
shall have meanings correlative to the foregoing.
"Applicable Regulations": As to any Mortgage Loan, all
federal, state and local laws, statutes, rules and regulations applicable
thereto, including with respect to each FHA Loan the FHA Regulations and the
related FHA Insurance Contract and with respect to each VA Loan the VA
Regulations and the related VA Guaranty Agreement.
"Applied Realized Loss Amount": With respect to each Payment
Date, the Group I Applied Realized Loss or the Group II Applied Realized Loss..
"Arrearage": With respect to a Delinquent Mortgage Loan, the
total amount of scheduled monthly payments due thereon on or before the Cut-Off
Date that were not received prior to the Cut-Off Date but for which advances of
principal and interest were made, plus any unreimbursed Servicing Advances as of
the Cut-Off Date.
"Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.
"Authorized Officer": With respect to the Issuer, either
Administrator or any officer of the Owner Trustee (including any Administrator
appointed under the Administration Agreement) who is authorized to act for the
Owner Trustee in matters relating to the Issuer and who is identified on the
list of Authorized Officers delivered by the Owner Trustee to the Indenture
Trustee on the Closing Date (as such list may be modified or supplemented from
time to time thereafter).
"Available Funds": As to any Payment Date and each Loan Group,
an amount equal to the excess of (i) the sum of (a) the aggregate of the Monthly
Payments for the related Mortgage Loans due on the related Due Date and received
by the Indenture Trustee one Business Day prior to the related Payment Date, (b)
Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Substitution
Adjustment Amounts, the Purchase Price for any repurchased Mortgage Loan, the
Redemption Price with respect to the termination of the related Loan Group
pursuant to Section 5.06 of the Servicing Agreement and other unscheduled
recoveries of principal and interest (excluding prepayment penalties and amounts
received in respect of Arrearages) in respect of the related Mortgage Loans
during the related Prepayment Period, (c) the aggregate of any amounts received
in respect of an REO Property withdrawn from any REO Account and deposited in
the Collection Account for such Payment Date, (d) any Compensating Interest for
such Payment Date, and (e) the aggregate of any Advances made by the Servicer
for such Payment Date over (ii) the sum of (a) amounts reimbursable or payable
to the Servicer pursuant to Section 3.05 of the Servicing Agreement, (b) Stayed
Funds, (c) the Servicing Fee and the Indenture Trustee Fee, (d) the PMI
-2-
Insurer premiums, if any and (e) amounts deposited in the Collection Account or
the Payment Account, as the case may be, in error.
"Balloon Mortgage Loan": A Mortgage Loan that provides for the
payment of the unamortized principal balance of such Mortgage Loan in a single
payment at the maturity of such Mortgage Loan that is substantially greater than
the preceding monthly payment.
"Balloon Payment": A payment of the unamortized principal
balance of Mortgage Loan in a single payment at the maturity of such Mortgage
Loan that is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code": Title 11 of the United States Code, as
amended.
"Basic Documents": The Trust Agreement, the Indenture, the
Mortgage Loan Purchase Agreement, the Servicing Agreement, the Custodial
Agreement and the other documents and certificates delivered in connection with
any of the above.
"Book-Entry Notes": Any of the Notes that shall be registered
in the name of the Depository or its nominee, the ownership of which is
reflected on the books of the Depository or on the books of a Person maintaining
an account with the Depository (directly, as a "Depository Participant", or
indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 4.06 of the Indenture). On the Closing
Date, the Class IA-IO, Class IA- 1, Class IM-1, Class IM-2, Class IB-1, Class
IIA-1, Class IIM-1, Class IIM-2 and Class IIB-1 Notes shall be Book-Entry Notes.
"Business Day": Any day other than a Saturday, a Sunday or a
day on which banking institutions in the State of Delaware, the State of New
York, the State of Minnesota, the State of Texas or in the city in which the
Corporate Trust Office of the Indenture Trustee is located are authorized or
obligated by law or executive order to be closed.
"Business Trust Statute": Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. ss. 3801 et seq., as the same may be amended
from time to time.
"Cap Contract": The cap contract between the Pledge
Administrator and the counterparty thereunder, a form of which is attached
hereto as Exhibit C.
"Cap Contract Pledge Agreement": The Cap Contract Pledge and
Administrative Agreement, dated December 14, 2001, between C-BASS Asset ABS LLC
and the Pledge Administrator, a form of which is attached hereto as Exhibit D.
"Certificate Distribution Account": The account or accounts
created and maintained by the Certificate Paying Agent pursuant to Section
3.10(c) of the Trust Agreement. The Certificate Paying Agent will make all
distributions on the Certificates from money on deposit in the Certificate
Distribution Account. The Certificate Distribution Account shall be an Eligible
Account.
-3-
"Certificate Distribution Amount": The amount payable to the
Certificate Paying Agent under Section 3.05 of the Indenture for payment in
accordance with Section 5.01 of the Trust Agreement.
"Certificate Paying Agent": The meaning specified in Section
3.10 of the Trust Agreement.
"Certificate Percentage Interest": With respect to any
Certificate and any date of determination, the percentage interest as stated on
the face of such Certificate, which percentage may be recalculated in accordance
with Section 3.03 of the Trust Agreement.
"Certificate Register": The register maintained by the
Certificate Registrar in which the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges of Certificates.
"Certificate Registrar": Initially, the Indenture Trustee, in
its capacity as Certificate Registrar, or any successor to the Indenture Trustee
in such capacity.
"Certificate of Trust": The Certificate of Trust filed for the
Issuer pursuant to Section 3810(a) of the Business Trust Statute, including all
amendments and restatements.
"Certificateholder": The Person in whose name a Certificate is
registered in the Certificate Register except that, any Certificate registered
in the name of the Issuer, the Owner Trustee or the Indenture Trustee or any
Affiliate of any of them shall be deemed not to be outstanding and the
registered holder will not be considered a Certificateholder or a holder for
purposes of giving any request, demand, authorization, direction, notice,
consent or waiver under the Indenture or the Trust Agreement provided that, in
determining whether the Indenture Trustee or the Owner Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Certificates that the Indenture Trustee or the
Owner Trustee knows to be so owned shall be so disregarded. Owners of
Certificates that have been pledged in good faith may be regarded as Holders if
the pledgee establishes to the satisfaction of the Indenture Trustee or the
Owner Trustee, as the case may be, the pledgee's right so to act with respect to
such Certificates and that the pledgee is not the Issuer, any other obligor upon
the Certificates or any Affiliate of any of the foregoing Persons.
"Certificates": The Certificates in substantially the form set
forth in Exhibit A to the Trust Agreement.
"Class": Collectively, Notes or REMIC Regular Interests which
have the same priority of payment and bear the same class designation and the
form of which is identical except for variation in the Percentage Interest
evidenced thereby.
"Class A Note": Any one of the Notes with an "A" designated on
the face thereof.
"Class A Noteholders": Collectively, the Holders of the Class
A Notes.
-4-
"Class IA-1 Applied Realized Loss Amount": As to the Class
IA-1 Notes and as of any Payment Date, the lesser of (x) the Note Balance
thereof (after taking into account the payment of the Group I Principal Payment
Amount on such Payment Date, but prior to the application of the Group I Applied
Realized Loss Amount, if any, on such Payment Date) and (y) the excess of (i)
the Group I Applied Realized Loss Amount as of such Payment Date over (ii) the
sum of the Class IM-1 Applied Realized Loss Amount, the Class IM-2 Applied
Realized Loss Amount, the Class IB-1 Applied Realized Loss Amount and the Class
IX/N Applied Realized Loss Amount, in each case, as of such Payment Date.
"Class IA-1 Note": Any one of the Notes with a "IA-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-2, executed by the Owner Trustee on behalf of the Issuer and
authenticated and delivered by the Indenture Trustee, representing the right to
payments as set forth herein and therein.
"Class IA-1 Note Margin": For each Payment Date (i) on or
prior to the Optional Redemption Date for the Group I Mortgage Loans, 0.450% per
annum, and (ii) following the Optional Redemption Date for the Group I Mortgage
Loans, 0.900% per annum.
"Class IA-1 Note Rate": For each Payment Date, the lesser of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class IA-1 Note
Margin and (ii) the Group I Pool Cap.
"Class IA-1 Principal Payment Amount": As of any Payment Date
on or after the Group I Stepdown Date and as long as a Group I Trigger Event is
not in effect, the excess of (x) the Note Balance of the Class IA-1 Notes
immediately prior to such Payment Date over (y) the lesser of (A) the product of
(i) 80.00% and (ii) the Principal Balance of the Group I Mortgage Loans as of
the last day of the related Collection Period and (B) the Principal Balance of
the Group I Mortgage Loans as of the last day of the related Collection Period
minus the product of (i) 0.50% and (ii) the Principal Balance of the Group I
Mortgage Loans on the Cut-Off Date.
"Class IA-1 Realized Loss Amortization Amount": As to the
Class A-1A Notes and as of any Payment Date, the lesser of (x) the Group I
Unpaid Realized Loss Amount for the Class IA-1 Notes as of such Payment Date and
(y) the excess of (i) the Group I Monthly Excess Cashflow Amount over (ii) the
sum of the amounts described under I(i) and (ii) of MONTHLY EXCESS CASHFLOW
PAYMENTS in Section 3.05 of the Indenture, in each case for such Payment Date.
"Class IA-1 REMIC Note Rate": The lesser of (a) the Class IA-1
Note Rate and (b) the Group I Pool Cap. The rate in clauses (a) and (b) shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Interest Accrual Period and the denominator of which is 30 to convert such
rates to the equivalent of one based on twelve 30-day months.
"Class IA Interest Carry Forward Amount": For any Payment
Date, the sum of the Interest Carry Forward Amounts for the Class IA-IO and
Class IA-1 Notes for such Payment Date.
"Class IA-IO Notes": Any one of the Notes with a "IA-IO"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-1, executed by the Owner Trustee on
-5-
behalf of the Issuer and authenticated and delivered by the Indenture Trustee,
representing the right to payments as set forth herein and therein.
"Class IA-IO Notional Amount": The lesser of (i) $89,039,838
and (ii) the sum of the aggregate Principal Balance of the Group I Mortgage
Loans (prior to giving effect to scheduled payments of principal due during the
related Collection Period and unscheduled collections of principal received
during the related Prepayment Period) with Mortgage Rates equal to or in excess
of 8.00% per annum.
"Class IA-IO Note Rate": For the first through the sixth
Payment Dates, 8.000% per annum, for the seventh through the twelfth Payment
Dates, 5.000% per annum and thereafter, 0.00% per annum.
"Class IB-1 Applied Realized Loss Amount": As to the Class
IB-1 Notes and as of any Payment Date, the lesser of (x) the Note Balance
thereof (after taking into account the payment of the Group I Principal Payment
Amount on such Payment Date, but prior to the application of the Group I Applied
Realized Loss Amount, if any, on such Payment Date) and (y) the excess of (i)
the Group I Applied Realized Loss Amount as of such Payment Date over (ii) the
Class IX/N Applied Realized Loss Amount as of such Payment Date.
"Class IB-1 Note": Any one of the Notes with a "IB-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-5, executed by the Owner Trustee on behalf of the Issuer and
authenticated and delivered by the Indenture Trustee, representing the right to
payments as set forth herein and therein.
"Class IB-1 Noteholder": Any Holder of a Class IB-1 Note.
"Class IB-1 Note Margin": For each Payment Date (i) on or
prior to the Optional Redemption Date for the Group I Mortgage Loans, 2.250% per
annum, and (ii) following the Optional Redemption Date for the Group I Mortgage
Loans, 3.375% per annum.
"Class IB-1 Note Rate": For each Payment Date, the lesser of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class IB-1 Note
Margin and (ii) the Group I Pool Cap.
"Class IB-1 Principal Payment Amount": As of any Payment Date
on or after the Group I Stepdown Date and as long as a Group I Trigger Event is
not in effect, the excess of (x) the sum of (i) the Note Balance of the Class
IA-1 Notes (after taking into account the payment of the Class IA-1 Principal
Payment Amount on such Payment Date), (ii) the Note Balance of the Class IM- 1
Notes (after taking into account the payment of the Class IM-1 Principal Payment
Amount on such Payment Date), (iii) the Note Balance of the Class IM-2 Notes
(after taking into account the payment of the Class IM-2 Principal Payment
Amount on such Payment Date) and (iv) the Note Balance of the Class IB-1 Notes
immediately prior to such Payment Date over (y) the lesser of (A) the product of
(i) 97.00% and (ii) the Principal Balance of the Group I Mortgage Loans as of
the last day of the related Collection Period and (B) the Principal Balance of
the Group I Mortgage Loans as of the last day of the related Collection Period
minus the product of 0.50% and the Principal Balance of the Group I Mortgage
Loans on the Cut-Off Date.
-6-
"Class IB-1 Realized Loss Amortization Amount": As to the
Class IB-1 Notes and as of any Payment Date, the lesser of (x) the Group I
Unpaid Realized Loss Amount for the Class IB-1 Notes as of such Payment Date and
(y) the excess of (i) the Group I Monthly Excess Cashflow Amount over (ii) the
sum of the amounts described under I(i) through (xii) of MONTHLY EXCESS CASHFLOW
PAYMENTS in Section 3.05 of the Indenture, in each case for such Payment Date.
"Class IB-1 REMIC Note Rate": The lesser of (a) the Class IB-1
Note Rate and (b) the Group I Pool Cap. The rate in clauses (a) and (b) shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Interest Accrual Period and the denominator of which is 30 to convert such
rates to the equivalent of one based on twelve 30-day months.
"Class IM-1 Applied Realized Loss Amount": As to the Class
IM-1 Notes and as of any Payment Date, the lesser of (x) the Note Balance
thereof (after taking into account the payment of the Group I Principal Payment
Amount on such Payment Date, but prior to the application of the Class IM-1
Applied Realized Loss Amount, if any, on such Payment Date) and (y) the excess
of (i) the Group I Applied Realized Loss Amount as of such Payment Date over
(ii) the sum of the Class IM-2 Applied Realized Loss Amount, the Class IB-1
Applied Realized Loss Amount and the Class N Applied Realized Loss Amount, in
each case, as of such Payment Date.
"Class IM-1 Note": Any one of the Notes with a "IM-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-3, executed by the Owner Trustee on behalf of the Issuer and
authenticated and delivered by the Indenture Trustee, representing the right to
payments as set forth herein and therein.
"Class IM-1 Note Margin": For each Payment Date (i) on or
prior to the Optional Redemption Date for the Group I Mortgage Loans, 1.000% per
annum, and (ii) following the Optional Redemption Date for the Group I Mortgage
Loans, 1.500% per annum.
"Class IM-1 Note Rate": For each Payment Date, the lesser of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class IM-1 Note
Margin and (ii) the Group I Pool Cap.
"Class IM-1 Principal Payment Amount": As of any Payment Date
on or after the Group I Stepdown Date and as long as a Group I Trigger Event is
not in effect, the excess of (x) the sum of (i) the Note Balances of the Class
IA-1 Notes (after taking into account the payment of the Class IA-1 Principal
Payment Amount on such Payment Date) and (ii) the Note Balance of the Class IM-1
Notes immediately prior to such Payment Date over (y) the lesser of (A) the
product of (i) 88.00% and (ii) the Principal Balance of the Group I Mortgage
Loans as of the last day of the related Collection Period and (B) the Principal
Balance of the Group I Mortgage Loans as of the last day of the related
Collection Period minus the product of 0.50% and the Principal Balance of the
Group I Mortgage Loans on the Cut-Off Date.
"Class IM-1 Realized Loss Amortization Amount": As to the
Class IM-1 Notes and as of any Payment Date, the lesser of (x) the Group I
Unpaid Realized Loss Amount for the Class IM-1 Notes as of such Payment Date and
(y) the excess of (i) the Group I Monthly Excess Cashflow Amount over (ii) the
sum of the amounts described under I(i) through (vi) of MONTHLY EXCESS CASHFLOW
PAYMENTS in Section 3.05 of the Indenture, in each case for such Payment Date.
-7-
"Class IM-1 REMIC Note Rate": The lesser of (a) the Class IM-1
Note Rate and (b) the Group I Pool Cap. The rate in clauses (a) and (b) shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Interest Accrual Period and the denominator of which is 30 to convert such
rates to the equivalent of one based on twelve 30-day months.
"Class IM-2 Applied Realized Loss Amount": As to the Class
IM-2 Notes and as of any Payment Date, the lesser of (x) the Note Balance
thereof (after taking into account the payment of the Group I Principal Payment
Amount on such Payment Date, but prior to the application of the Class IM-2
Applied Realized Loss Amount, if any, on such Payment Date) and (y) the excess
of (i) the Group I Applied Realized Loss Amount as of such Payment Date over
(ii) the sum of the Class IB-1 Applied Realized Loss Amount and the Class IX/N
Applied Realized Loss Amount, in each case, as of such Payment Date.
"Class IM-2 Note": Any one of the Notes with a "IM-2"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-4, executed by the Owner Trustee on behalf of the Issuer and
authenticated and delivered by the Indenture Trustee, representing the right to
payments as set forth herein and therein.
"Class IM-2 Note Margin": For each Payment Date (i) on or
prior to the Optional Redemption Date for the Group I Mortgage Loans, 1.550% per
annum, and (ii) following the Optional Redemption Date for the Group I Mortgage
Loans, 2.325% per annum.
"Class IM-2 Note Rate": For each Payment Date, the lesser of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class IM-2 Note
Margin and (ii) the Group I Pool Cap.
"Class IM-2 Principal Payment Amount": As of any Payment Date
on or after the Group I Stepdown Date and as long as a Group I Trigger Event is
not in effect, the excess of (x) the sum of (i) the Note Balances of the Class
IA-1 Notes (after taking into account the payment of the Class IA-1 Principal
Payment Amount on such Payment Date), (ii) the Note Balance of the Class IM- 1
Notes (after taking into account the payment of the Class IM-1 Principal Payment
Amount on such Payment Date) and (iii) the Note Balance of the Class IM-2 Notes
immediately prior to such Payment Date over (y) the lesser of (A) the product of
(i) 93.00% and (ii) the Principal Balance of the Group I Mortgage Loans as of
the last day of the related Collection Period and (B) the Principal Balance of
the Group I Mortgage Loans as of the last day of the related Collection Period
minus the product of 0.50% and the Principal Balance of the Group I Mortgage
Loans on the Cut-Off Date.
"Class IM-2 Realized Loss Amortization Amount": As to the
Class IM-2 Notes and as of any Payment Date, the lesser of (x) the Group I
Unpaid Realized Loss Amount for the Class IM-2 Notes as of such Payment Date and
(y) the excess of (i) the Group I Monthly Excess Cashflow Amount over (ii) the
sum of the amounts described under I(i) through (ix) of MONTHLY EXCESS CASHFLOW
PAYMENTS in Section 3.05 of the Indenture, in each case for such Payment Date.
"Class IM-2 REMIC Note Rate": The lesser of (a) the Class IM-2
Notes Rate and (b) the Group I Pool Cap. The rate in clauses (a) and (b) shall
be multiplied by a fraction, the
-8-
numerator of which is the actual number of days in the Interest Accrual Period
and the denominator of which is 30 to convert such rates to the equivalent of
one based on twelve 30-day months.
"Class IN Note": Any one of the Notes with a "IN" designated
on the face thereof substantially in the form annexed hereto as Exhibit A-7,
executed by the Owner Trustee on behalf of the Issuer and authenticated and
delivered by the Indenture Trustee, representing the right to payments as set
forth herein and therein. The Class IN Note shall not be designated as a REMIC
Regular Interest.
"Class IN Notional Amount": On any Payment Date, with respect
to the Class IN Notes, an amount equal to the Original Class IN Notional Amount
reduced by the aggregate payments made to the Class IN Notes pursuant to Section
3.05 of the Indenture.
"Class IN Note Rate": For each Payment Date, 10.00% per annum.
"Class IT3-X/N Interest Note Rate": The Note Rate in respect
of the Class IT3-X/N Interest for any Payment Date equal to the excess of (i)
the Group I Pool Cap over (ii) the product of (A) two and (B) the weighted
average Note Rate of the Subsidiary REMIC Regular Interests (as defined in
Article X of the Indenture), where the Subsidiary REMIC Accrual Class is subject
to a cap of zero and each Subsidiary REMIC Accretion Directed Class is subject
to a cap equal to the Note Rate on its Corresponding Class. For purposes of the
foregoing calculation, each of the Class IA-1 Note Rate, the Class IM-1 Note
Rate, the Class M-2 Note Rate and the Class IB-1 Note Rate shall be multiplied
by a fraction, the numerator of which is the actual number of days in the
Interest Accrual Period and the denominator of which is 30 so as to adjust it to
a rate that consists of twelve 30 day accrual periods and a 360-day year. The
initial Group I Pool Cap for this purpose shall be the rate necessary to allow
the Class IT3-X/N Interest to absorb the interest for the first Interest Accrual
Period in excess of the interest due on other REMIC 3 interests.
"Class IX Distributable Amount": With respect to any Payment
Date, the excess of (i) the aggregate of amounts distributable on the Class IX/N
Interest for such Payment Date, over (ii) the aggregate of amounts distributable
to the Class IN Notes pursuant to Section 3.05 of the Indenture.
"Class IX Note": Any one of the Class IX Notes as designated
on the face thereof substantially in the form annexed hereto as Exhibit A-8,
executed by the Owner Trustee on behalf of the Issuer and authenticated and
delivered by the Indenture Trustee, representing the right to payments as set
forth herein and therein. The Class IX Note shall not be designated as a REMIC
Regular Interest.
"Class IX/N Applied Realized Loss Amount": As to the Class
IX/N Interest and as of any Payment Date, the lesser of (x) the Class IX/N
Notional Amount (after taking into account the payment of the Group I Principal
Payment Amount on such Payment Date, but prior to the application of the Class
IX/N Applied Realized Loss Amount, if any, on such Payment Date) and (y) the
Group I Applied Realized Loss Amount as of such Payment Date.
-9-
"Class IX/N Interest": An uncertificated interest in REMIC IV
held by the Indenture Trustee on behalf of the holders of the Class IX and Class
IN Notes and which is entitled to all payments in respect of the Class IX/N
Interest Note Rate and which payments shall first be used to pay the amount of
any LIBOR Carryover Amounts for the Class IA-1 Notes and the Group I Mezzanine
Notes pursuant to Section 3.05 of the Indenture or Rate Payments pursuant to
Section 3.05 of the Indenture. The Class IX/N Interest shall be designated as a
REMIC Regular Interest.
"Class IX/N Interest Note Rate": One hundred percent of the
interest payable on the Class IT3-X/N Interest.
"Class IX/N Notional Amount": On any Payment Date, with
respect to the Class IX/N Interest, an amount equal to the Original Class IX/N
Notional Amount reduced by the aggregate of payments made on the Class IX/N
Interest.
"Class IX/N Realized Loss Amortization Amount": As to the
Class IX/N Interest and as of any Payment Date, the lesser of (x) the Group I
Unpaid Realized Loss Amount for the Class IX/N Interest as of such Payment Date
and (y) the excess of (i) the Group I Monthly Excess Cashflow Amount over (ii)
the sum of the amounts described under I(i) through (xvii) of MONTHLY EXCESS
CASHFLOW PAYMENTS in Section 3.05 of the Indenture, in each case for such
Payment Date.
"Class IIA-1 Applied Realized Loss Amount": As to the Class
IA-1 Notes and as of any Payment Date, the lesser of (x) the Note Balance
thereof (after taking into account the payment of the Group II Principal Payment
Amount on such Payment Date, but prior to the application of the Group II
Applied Realized Loss Amount, if any, on such Payment Date) and (y) the excess
of (i) the Group II Applied Realized Loss Amount as of such Payment Date over
(ii) the sum of the Class IIM- 1 Applied Realized Loss Amount, the Class IIM-2
Applied Realized Loss Amount, the Class IIB-1 Applied Realized Loss Amount, in
each case, as of such Payment Date.
"Class IIA-1 Note": Any one of the Notes with a "IIA-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-10, executed by the Owner Trustee on behalf of the Issuer and
authenticated and delivered by the Indenture Trustee, representing the right to
payments as set forth herein and therein.
"Class IIA-1 Note Margin": For each Payment Date (i) on or
prior to the Optional Redemption Date for the Group II Mortgage Loans, 0.650%
per annum, and (ii) following the Optional Redemption Date for the Group II
Mortgage Loans, 1.300% per annum.
"Class IIA-1 Note Rate": For each Payment Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class IIA-1 Note
Margin, (ii) the Group II Pool Cap or (iii) Maximum Note Rate.
"Class IIA-1 Principal Payment Amount": As of any Payment Date
on or after the Group II Stepdown Date and as long as a Group II Trigger Event
is not in effect, the excess of (x) the Note Balance of the Class IIA-1 Notes
immediately prior to such Payment Date over (y) the lesser of (A) the product of
(i) 30.00% and (ii) the Principal Balance of the Group II Mortgage Loans as of
the last day of the related Collection Period and (B) the Principal Balance of
the Group II
-10-
Mortgage Loans as of the last day of the related Collection Period minus the
product of (i) 0.50% and (ii) the Principal Balance of the Group II Mortgage
Loans on the Cut-Off Date.
"Class IIA-1 Realized Loss Amortization Amount": As to the
Class IIA-1 Notes and as of any Payment Date, the lesser of (x) the Group II
Unpaid Realized Loss Amount for the Class IIA-1 Notes as of such Payment Date
and (y) the excess of (i) the Group II Monthly Excess Cashflow Amount over (ii)
the sum of the amounts described under II(i)and (ii) of MONTHLY EXCESS CASHFLOW
PAYMENTS under Section 3.05 of the Indenture, in each case for such Payment
Date.
"Class IIA-1 Pay Note Rate": The lesser of (a) the Class IIA-1
Note Rate and (b) the Group II Pool Cap. The rate in clauses (a) and (b) shall
be multiplied by a fraction, the numerator of which is the actual number of days
in the Interest Accrual Period and the denominator of which is 30 to convert
such rates to the equivalent of one based on twelve 30-day months.
"Class IIB-1 Applied Realized Loss Amount": As to the Class
IIB-1 Notes and as of any Payment Date, the lesser of (x) the Note Balance
thereof (after taking into account the payment of the Group II Principal Payment
Amount on such Payment Date, but prior to the application of the Group II
Applied Realized Loss Amount, if any, on such Payment Date) and (y) the Group II
Applied Realized Loss Amount as of such Payment Date.
"Class IIB-1 Note": Any one of the Notes with a "IIB-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-13, executed by the Owner Trustee on behalf of the Issuer and
authenticated and delivered by the Indenture Trustee, representing the right to
payments as set forth herein and therein.
"Class IIB-1 Noteholder": Any Holder of a Class IIB-1 Note.
"Class IIB-1 Note Margin": For each Payment Date (i) on or
prior to the Optional Redemption Date for the Group II Mortgage Loans, 2.400%
per annum, and (ii) following the Optional Redemption Date for the Group II
Mortgage Loans, 3.600% per annum.
"Class IIB-1 Note Rate": For each Payment Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class IIB-1 Note
Margin, (ii) the Group II Pool Cap or (iii) Maximum Note Rate.
"Class IIB-1 Principal Payment Amount": As of any Payment Date
on or after the Group II Stepdown Date and as long as a Group II Trigger Event
is not in effect, the excess of (x) the sum of (i) the Note Balance of the Class
IIA-1 Notes (after taking into account the payment of the Class IIA-1 Principal
Payment Amount on such Payment Date), (ii) the Note Balance of the Class IIM-1
Notes (after taking into account the payment of the Class IIM-1 Principal
Payment Amount on such Payment Date), (iii) the Note Balance of the Class IIM-2
Notes (after taking into account the payment of the Class IIM-2 Principal
Payment Amount on such Payment Date) and (iv) the Note Balance of the Class
IIB-1 Notes immediately prior to such Payment Date over (y) the lesser of (A)
the product of (i) 75.00% and (ii) the Principal Balance of the Group II
Mortgage Loans as of the last day of the related Collection Period and (B) the
Principal Balance of the Group II Mortgage Loans
-11-
as of the last day of the related Collection Period minus the product of 0.50%
and the Principal Balance of the Group II Mortgage Loans on the Cut-Off Date.
"Class IIB-1 Realized Loss Amortization Amount": As to the
Class IIB-1 Notes and as of any Payment Date, the lesser of (x) the Group II
Unpaid Realized Loss Amount for the Class IIB-1 Notes as of such Payment Date
and (y) the excess of (i) the Group II Monthly Excess Cashflow Amount over (ii)
the sum of the amounts described under II(i) through (xii) of MONTHLY EXCESS
CASHFLOW PAYMENTS in Section 3.05 of the Indenture, in each case for such
Payment Date.
"Class IIB-1 Pay Note Rate": The lesser of (a) the Class IIB-1
Note Rate and (b) the Group II Pool Cap. The rate in clauses (a) and (b) shall
be multiplied by a fraction, the numerator of which is the actual number of days
in the Interest Accrual Period and the denominator of which is 30 to convert
such rates to the equivalent of one based on twelve 30-day months.
"Class IIM-1 Applied Realized Loss Amount": As to the Class
IIM-1 Notes and as of any Payment Date, the lesser of (x) the Note Balance
thereof (after taking into account the payment of the Group II Principal Payment
Amount on such Payment Date, but prior to the application of the Class IIM-1
Applied Realized Loss Amount, if any, on such Payment Date) and (y) the excess
of (i) the Group II Applied Realized Loss Amount as of such Payment Date over
(ii) the sum of the Class IIM-2 Applied Realized Loss Amount and the Class IIB-1
Applied Realized Loss Amount, in each case, as of such Payment Date.
"Class IIM-1 Note": Any one of the Notes with a "IIM-1"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-11, executed by the Owner Trustee on behalf of the Issuer and
authenticated and delivered by the Indenture Trustee, representing the right to
payments as set forth herein and therein.
"Class IIM-1 Note Margin": For each Payment Date (i) on or
prior to the Optional Redemption Date for the Group II Mortgage Loans, 1.250%
per annum, and (ii) following the Optional Redemption Date for the Group II
Mortgage Loans, 1.875% per annum.
"Class IIM-1 Note Rate": For each Payment Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class IIM-1 Note
Margin, (ii) the Group II Pool Cap or (iii) Maximum Note Rate.
"Class IIM-1 Principal Payment Amount": As of any Payment Date
on or after the Group II Stepdown Date and as long as a Group II Trigger Event
is not in effect, the excess of (x) the sum of (i) the Note Balances of the
Class IIA-1 Notes (after taking into account the payment of the Class IIA-1
Principal Payment Amount on such Payment Date) and (ii) the Note Balance of the
Class IIM-1 Notes immediately prior to such Payment Date over (y) the lesser of
(A) the product of (i) 42.00% and (ii) the Principal Balance of the Group II
Mortgage Loans as of the last day of the related Collection Period and (B) the
Principal Balance of the Group II Mortgage Loans as of the last day of the
related Collection Period minus the product of 0.50% and the Principal Balance
of the Group II Mortgage Loans on the Cut-Off Date.
-12-
"Class IIM-1 Realized Loss Amortization Amount": As to the
Class IIM-1 Notes and as of any Payment Date, the lesser of (x) the Group II
Unpaid Realized Loss Amount for the Class IIM-1 Notes as of such Payment Date
and (y) the excess of (i) the Group II Monthly Excess Cashflow Amount over (ii)
the sum of the amounts described under II(i) through (vi) of MONTHLY EXCESS
CASHFLOW PAYMENTS in Section 3.05 of the Indenture, in each case for such
Payment Date.
"Class IIM-1 Pay Note Rate": The lesser of (a) the Class IIM-1
Note Rate and (b) the Group II Pool Cap. The rate in clauses (a) and (b) shall
be multiplied by a fraction, the numerator of which is the actual number of days
in the Interest Accrual Period and the denominator of which is 30 to convert
such rates to the equivalent of one based on twelve 30-day months.
"Class IIM-2 Applied Realized Loss Amount": As to the Class
IIM-2 Notes and as of any Payment Date, the lesser of (x) the Note Balance
thereof (after taking into account the payment of the Group II Principal Payment
Amount on such Payment Date, but prior to the application of the Class IIM-2
Applied Realized Loss Amount, if any, on such Payment Date) and (y) the excess
of (i) the Group II Applied Realized Loss Amount as of such Payment Date over
(ii) the sum of the Class IIB-1 Applied Realized Loss Amount as of such Payment
Date.
"Class IIM-2 Note": Any one of the Notes with a "IIM-2"
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-12, executed by the Owner Trustee on behalf of the Issuer and
authenticated and delivered by the Indenture Trustee, representing the right to
payments as set forth herein and therein.
"Class IIM-2 Note Margin": For each Payment Date (i) on or
prior to the Optional Redemption Date for the Group II Mortgage Loans, 1.650%
per annum, and (ii) following the Optional Redemption Date for the Group II
Mortgage Loans, 2.475% per annum.
"Class IIM-2 Note Rate": For each Payment Date, the least of
(i) LIBOR as of the related LIBOR Determination Date, plus the Class IIM-1 Note
Margin, (ii) the Group II Pool Cap or (iii) Maximum Note Rate.
"Class IIM-2 Principal Payment Amount": As of any Payment Date
on or after the Group II Stepdown Date and as long as a Group II Trigger Event
is not in effect, the excess of (x) the sum of (i) the Note Balances of the
Class IIA-1 Notes (after taking into account the payment of the Class IIA-1
Principal Payment Amount on such Payment Date), (ii) the Note Balance of the
Class IIM-1 Notes (after taking into account the payment of the Class IIM-1
Principal Payment Amount on such Payment Date) and (iii) the Note Balance of the
Class IIM-2 Notes immediately prior to such Payment Date over (y) the lesser of
(A) the product of (i) 62.00% and (ii) the Principal Balance of the Group II
Mortgage Loans as of the last day of the related Collection Period and (B) the
Principal Balance of the Group II Mortgage Loans as of the last day of the
related Collection Period minus the product of 0.50% and the Principal Balance
of the Group II Mortgage Loans on the Cut-Off Date.
"Class IIM-2 Realized Loss Amortization Amount": As to the
Class IIM-2 Notes and as of any Payment Date, the lesser of (x) the Group II
Unpaid Realized Loss Amount for the Class IIM-2 Notes as of such Payment Date
and (y) the excess of (i) the Group II Monthly Excess
-13-
Cashflow Amount over (ii) the sum of the amounts described under II(i) through
(ix) under MONTHLY EXCESS CASHFLOW PAYMENTS of the Indenture, in each case for
such Payment Date.
"Class IIM-2 Pay Note Rate": The lesser of (a) the Class IIM-2
Notes Rate and (b) the Group II Pool Cap. The rate in clauses (a) and (b) shall
be multiplied by a fraction, the numerator of which is the actual number of days
in the Interest Accrual Period and the denominator of which is 30 to convert
such rates to the equivalent of one based on twelve 30-day months.
"Class IIN Note": Any one of the Notes with a "IIN" designated
on the face thereof substantially in the form annexed hereto as Exhibit A-15,
executed by the Owner Trustee on behalf of the Issuer and authenticated and
delivered by the Indenture Trustee, representing the right to payments as set
forth herein and therein.
"Class IIN Notional Amount": On any Payment Date, with respect
to the Class IIN Notes, an amount equal to the Original Class IIN Notional
Amount reduced by the aggregate payments made to the Class IIN Notes pursuant to
Section 3.05 of the Indenture.
"Class IIN Note Rate": For each Payment Date, 10.00% per
annum.
"Class IIX Note": Any one of the Class IIX Notes as designated
on the face thereof substantially in the form annexed hereto as Exhibit A-14 of
the Indenture, executed by the Owner Trustee on behalf of the Issuer and
authenticated and delivered by the Indenture Trustee, representing the right to
payments as set forth herein and therein.
"Class R Note": The Class R Note executed by the Owner Trustee
on behalf of the Issuer, and authenticated and delivered by the Note Registrar,
substantially in the form annexed hereto as Exhibit A-8, evidencing the
ownership of the Class R-1 Interest, the Class R-2 Interest and the Class R-3
Interest.
"Class R-1 Interest": The uncertificated residual interest in
REMIC 1.
"Class R-2 Interest": The uncertificated residual interest in
REMIC 2.
"Class R-3 Interest": The uncertificated residual interest in
REMIC 3.
"Class R-4 Note": The Class R-4 Note executed by the Owner
Trustee on behalf of the Issuer, and authenticated and delivered by the Note
Registrar, substantially in the form annexed hereto as Exhibit A-9, evidencing
the ownership of the Class R-4 Interest.
"Class R-4 Interest": The uncertificated residual interest in
REMIC 4.
"Closing Date": December 14, 2001.
"Code": The Internal Revenue Code of 1986, as it may be
amended from time to time.
-14-
"Collateral": The meaning specified in the Granting Clause of
the Indenture.
"Collection Account": The account or accounts created and
maintained by the Servicer pursuant to Section 3.04 of the Servicing Agreement,
which shall be entitled "Xxxxxx Loan Servicing LP, as Servicer for U.S. Bank
National Association, as Indenture Trustee, in trust for registered Holders of
2001-CB4 Trust, C-BASS Mortgage Loan Asset-Backed Notes, Series 2001- CB4," and
which must be an Eligible Account.
"Collection Period": With respect to any Payment Date, the
period from the second day of the calendar month preceding the month in which
such Payment Date occurs through the first day of the month in which such
Payment Date occurs.
"Combined Loan-to-Value Ratio": As of any date and Mortgage
Loan, the fraction, expressed as a percentage, the numerator of which is the
Principal Balance of the Mortgage Loan plus the principal balance of any related
senior mortgage loan, and the denominator of which is the Value of the related
Mortgaged Property.
"Compensating Interest": As defined in Section 3.23 of the
Servicing Agreement.
"Condemnation Proceeds": All awards or settlements in respect
of a taking of a Mortgaged Property by exercise of the power of eminent domain
or condemnation.
"Conventional Mortgage Loan": Any Mortgage Loan that is
neither an FHA Loan nor a VA Loan.
"Corporate Trust Office": The principal corporate trust office
of the Indenture Trustee or the Owner Trustee at which at any particular time
its corporate trust business in connection with the Indenture or the Trust
Agreement shall be administered, which office at the date of the execution of
this instrument, with respect to the Indenture Trustee, is located at 000 Xxxx
Xxxxx Xxxxxx, Xx. Xxxx, Xxxxxxxxx, 00000, or at such other address as the
Indenture Trustee may designate from time to time by notice to the Noteholders,
the Issuer, the Depositor, the Servicer and the Seller and with respect to the
Owner Trustee is located at Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Corporate Trust Administration, or at
such other address as the Owner Trustee may designate from time to time by
notice to the Certificateholders, the Indenture Trustee, the Depositor, the
Servicer and the Seller.
"Custodial Agreement": The Custodial Agreement, dated as of
December 14, 2001, among the Indenture Trustee, the Servicer and the Custodian,
as the same may be amended or supplemented pursuant to the terms thereof.
"Custodian": The Bank of New York, or any successor custodian
appointed pursuant to the terms of the Custodial Agreement.
"Cut-Off Date": November 1, 2001.
-15-
"Cut-Off Date Aggregate Principal Balance": The aggregate of
the Cut-Off Date Principal Balances of the Mortgage Loans.
"Cut-Off Date Principal Balance": With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the Cut-Off Date after
application of funds received or advanced on or before such date (or as of the
applicable date of substitution with respect to an Eligible Substitute Mortgage
Loan).
"Debt Service Reduction": With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan": A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"Deferred Interest": With respect to any Mortgage Loan
identified on the Mortgage Loan Schedule as having the possibility of negative
amortization, the current portion of interest not currently paid by the
Mortgagor that is added to the principal balance of such Mortgage Loan.
"Deficient Valuation": With respect to any Mortgage Loan, a
valuation of the related Mortgaged Property by a court of competent jurisdiction
in an amount less than the then outstanding principal balance of the Mortgage
Loan, which valuation results from a proceeding initiated under the Bankruptcy
Code.
"Definitive Notes": As defined in Section 4.06 of the
Indenture.
"Delinquent": Any Mortgage Loan, the Monthly Payment due on a
Due Date with respect to which such monthly payment is not made by the close of
business on the next scheduled Due Date for such Mortgage Loan.
"Depositor": Salomon Brothers Mortgage Securities VII, Inc., a
Delaware corporation, or any successor in interest.
"Depository": The initial depository shall be The Depository
Trust Company, whose nominee is Cede & Co., or any other organization registered
as a "clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934, as amended. The Depository shall initially be the registered Holder of the
Book-Entry Notes. The Depository shall at all times be a "clearing corporation"
as defined in Section 8-102(3) of the Uniform Commercial Code of the State of
New York.
"Depository Agreement": With respect to any Book-Entry Notes,
the agreement among the Issuer, the Indenture Trustee and the initial
Depository, to be dated on or about the Closing Date.
-16-
"Depository Participant": A broker, dealer, bank or other
financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
"Determination Date": With respect to any Payment Date, the
10th day of the calendar month in which such Payment Date occurs or, if such
10th day is not a Business Day, the Business Day immediately preceding such 10th
day.
"Directly Operate": With respect to any REO Property, the
furnishing or rendering of services to the tenants thereof, the management or
operation of such REO Property, the holding of such REO Property primarily for
sale to customers, the performance of any construction work thereon or any use
of such REO Property in a trade or business conducted by the Issuer other than
through an Independent Contractor; provided, however, that the Indenture Trustee
(or the Servicer on behalf of the Indenture Trustee) shall not be considered to
Directly Operate an REO Property solely because the Indenture Trustee (or the
Servicer on behalf of the Indenture Trustee) establishes rental terms, chooses
tenants, enters into or renews leases, deals with taxes and insurance, or makes
decisions as to repairs or capital expenditures with respect to such REO
Property.
"Disqualified Organization": A "disqualified organization"
under Section 860E of the Code, which as of the Closing Date is any of: (i) the
United States, any state or political subdivision thereof, any possession of the
United States, any foreign government, any international organization, or any
agency or instrumentality of any of the foregoing, (ii) any organization (other
than a cooperative described in Section 521 of the Code) which is exempt from
the tax imposed by Chapter 1 of the Code unless such organization is subject to
the tax imposed by Section 511 of the Code, (iii) any organization described in
Section 1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the
Indenture Trustee based upon an Opinion of Counsel provided by nationally
recognized counsel to the Indenture Trustee that the holding of an ownership
interest in a Class R or Class R-4 Note by such Person may cause the Trust
Estate or any Person having an ownership interest in any Class of Notes (other
than such Person) to incur liability for any federal tax imposed under the Code
that would not otherwise be imposed but for the transfer of an ownership
interest in the Class R or Class R-4 Note to such Person. A corporation will not
be treated as an instrumentality of the United States or of any state or
political subdivision thereof if all of its activities are subject to tax and a
majority of its board of directors is not selected by a governmental unit. The
term "United States", "state" and "international organization" shall have the
meanings set forth in Section 7701 of the Code.
"Due Date": With respect to each Mortgage Loan and any Payment
Date, the day of the calendar month in which such Payment Date occurs on which
the Monthly Payment for such Mortgage Loan was due, exclusive of any grace
period.
"Eligible Account": Any of (i) an account or accounts
maintained with a federal or state chartered depository institution or trust
company the short-term unsecured debt obligations of which (or, in the case of a
depository institution or trust company that is the principal subsidiary of a
holding company, the short-term unsecured debt obligations of such holding
company) are rated "A-1" (or the equivalent) by each of the Rating Agencies at
the time any amounts are held on deposit therein, (ii) an account or accounts
the deposits in which are fully insured by the FDIC (to the limits
-17-
established by such corporation), the uninsured deposits in which account are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered to
the Indenture Trustee, the Issuer and to each Rating Agency, the Noteholders
will have a claim with respect to the funds in such account or a perfected first
priority security interest against such collateral (which shall be limited to
Permitted Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, (iii) a trust account or accounts maintained with the
trust department of a federal or state chartered depository institution,
national banking association or trust company acting in its fiduciary capacity
or (iv) an account otherwise acceptable to each Rating Agency without reduction
or withdrawal of their then current ratings of the Notes as evidenced by a
letter from each Rating Agency to the Indenture Trustee and the Issuer. Eligible
Accounts may bear interest.
"Eligible Substitute Mortgage Loan": A mortgage loan
substituted for a Defective Mortgage Loan pursuant to the terms of the Mortgage
Loan Purchase Agreement which must, on the date of such substitution, (i) have
an outstanding principal balance, after application of all scheduled payments of
principal and interest due during or prior to the month of substitution, not in
excess of, and not more than 5% less than, the outstanding principal balance of
the Defective Mortgage Loan as of the Due Date in the calendar month during
which the substitution occurs, (ii) have a Mortgage Rate not less than the
Mortgage Rate of the Defective Mortgage Loan and not more than 1% in excess of
the Mortgage Rate of such Defective Mortgage Loan, (iii) if an adjustable-rate
Mortgage Loan, have a Maximum Loan Rate not less than the Maximum Loan Rate for
the Defective Mortgage Loan, (iv) if an adjustable-rate Mortgage Loan, have a
Minimum Loan Rate not less than the Minimum Loan Rate of the Defective Mortgage
Loan, (v) if an adjustable-rate Mortgage Loan, have a Gross Margin equal to or
greater than the Gross Margin of the Defective Mortgage Loan, (vi) if an
adjustable-rate Mortgage Loan, have a next Adjustment Date not more than two
months later than the next Adjustment Date on the Defective Mortgage Loan,
except in the case of any Mortgage Loan which has an Arrearage due to the
application of any related forbearance plan with respect to such Mortgage Loan,
an Eligible Substitute Mortgage Loan must have all Adjustment Dates occurring
during the same Interest Accrual Period during which Adjustment Dates occur with
respect to the substituted Mortgage Loan, (vii) have a remaining term to
maturity not greater than (and not more than one year less than) that of the
Defective Mortgage Loan, (viii) be current as of the date of substitution, (ix)
have a Combined Loan-to-Value Ratio as of the date of substitution equal to or
lower than the Combined Loan-to-Value Ratio of the Defective Mortgage Loan as of
such date, (x) have a risk grading determined by the Seller at least equal to
the risk grading assigned on the Defective Mortgage Loan, (xi) have been
reunderwritten by the Seller in accordance with the same underwriting criteria
and guidelines as the Defective Mortgage Loan and (xii) conform to each
representation and warranty set forth in the Mortgage Loan Purchase Agreement
applicable to the Defective Mortgage Loan. In the event that one or more
mortgage loans are substituted for one or more Defective Mortgage Loans, the
amounts described in clause (i) hereof shall be determined on the basis of
aggregate principal balances, the Mortgage Rates described in clause (ii) hereof
shall be determined on the basis of weighted average Mortgage Rates, the risk
gradings described in clause (x) hereof shall be satisfied as to each such
mortgage loan, the terms described in clause (vii) hereof shall be determined on
the basis of weighted average remaining term to maturity, the Combined
Loan-to-Value Ratios described in clause (ix) hereof shall be satisfied as to
each such mortgage loan and, except to the extent otherwise provided in this
sentence, the representations and warranties
-18-
described in clause (xii) hereof must be satisfied as to each Eligible
Substitute Mortgage Loan or in the aggregate, as the case may be.
"ERISA": The Employee Retirement Income Security Act of 1974,
as amended.
"ERISA-Restricted Notes": Any of the Class IN, Class IX, Class
IIN, Class IIX, Class R and Class R-4 Notes.
"Escrow Account": The account or accounts created and
maintained pursuant to Section 3.06 of the Servicing Agreement.
"Escrow Payments": The amounts constituting ground rents,
taxes, assessments, water rates, mortgage insurance premiums, fire and hazard
insurance premiums and other payments required to be escrowed by the Mortgagor
with the mortgagee pursuant to any Mortgage Loan.
"Estate in Real Property": A fee simple estate in a parcel of
real property.
"Event of Default": With respect to the Indenture, any one of
the following events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(i) a default by the Issuer in the payment of (a) the Accrued
Note Interest, the Group I Principal Payment Amount or the Group II
Principal Payment Amount or any Group I Overcollateralization Increase
Amount or Group II Overcollateralization Increase Amount with respect
to a Payment Date on such Payment Date, but only to the extent funds
are available to make such payment as provided in the Indenture which
remains unremedied for a period of five days; or
(ii) the failure by the Issuer on the Final Maturity Date to
reduce the Note Balance of any Notes outstanding to zero; or
(iii) there occurs a default in the observance or performance
of any covenant or agreement of the Issuer made in the Indenture, or
any representation or warranty of the Issuer made in the Indenture or
in any certificate or other writing delivered pursuant thereto or in
connection therewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such
default shall continue or not be cured, or the circumstance or
condition in respect of which such representation or warranty was
incorrect shall not have been eliminated or otherwise cured, for a
period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the Indenture Trustee or to the Issuer
and the Indenture Trustee by the Holders of at least 25% of the Voting
Rights, a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating
that such notice is a notice of default hereunder; or
(iv) there occurs the filing of a decree or order for relief
by a court having jurisdiction in the premises in respect of the Issuer
or any substantial part of the Trust Estate
-19-
in an involuntary case under any applicable federal or state
bankruptcy, insolvency or other similar law now or hereafter in effect,
or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the Trust Estate, or ordering the winding-up or liquidation of
the Issuer's affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or
(v) there occurs the commencement by the Issuer of a voluntary
case under any applicable federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by the
Issuer to the entry of an order for relief in an involuntary case under
any such law, or the consent by the Issuer to the appointment or taking
possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any substantial
part of the assets of the Trust Estate, or the making by the Issuer of
any general assignment for the benefit of creditors, or the failure by
the Issuer generally to pay its debts as such debts become due, or the
taking of any action by the Issuer in furtherance of any of the
foregoing.
"Excess Reserve Fund Account": The separate account, held in
trust, created and maintained by the Indenture Trustee pursuant to Section 3.07
of the Indenture in the name of the Indenture Trustee for the benefit of the
Class IA-1 and the Group I Mezzanine Noteholders and designated "U.S. Bank
National Association in trust for registered Holders of C-BASS Mortgage Loan
Asset-Backed Notes, Series 2001-CB4, Class IA-1 and Group I Mezzanine Notes."
The Excess Reserve Fund Account is not an asset of any REMIC.
"Expenses": The meaning specified in Section 7.02 of the Trust
Agreement.
"Expense Fee Rate": The sum of (i) the Indenture Trustee Fee
Rate and (ii) the Servicing Fee Rate.
"FDIC": Federal Deposit Insurance Corporation or any successor
thereto.
"FHA": The Federal Housing Administration, an agency within
HUD.
"FHA Approved Mortgagee": Those institutions which are
approved by FHA to act as servicer and mortgagee of record pursuant to FHA
Regulations.
"FHA Insurance Contract" or "FHA Insurance": The contractual
obligation of FHA respecting the insurance of an FHA Loan pursuant to the
National Housing Act, as amended.
"FHA Loan": A Mortgage Loan which is the subject of an FHA
Insurance Contract as evidenced by a Mortgage Insurance Certificate.
"FHA Regulations": Regulations promulgated by HUD under the
National Housing Act, codified in 24 Code of Federal Regulations, and other HUD
issuances relating to FHA Loans, including the related handbooks, circulars,
notices and mortgagee letters.
"FHLMC": Federal Home Loan Mortgage Corporation or any
successor thereto.
-20-
"Fidelity Bond": Shall have the meaning assigned thereto in
Section 3.12 of the Servicing Agreement.
"Final Recovery Determination": With respect to any defaulted
Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property
purchased by the Seller or the Servicer pursuant to or as contemplated by
Section 3.01 of the Mortgage Loan Purchase Agreement or 8.07 of the Indenture),
a determination made by the Servicer that all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries which the Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.
"Final Maturity Date": As to each Class of Notes, the Payment
Date occurring in November 2033.
"Fitch": "Fitch, Inc. and its successors, and if such company
shall for any reason no longer perform the functions of a securities rating
agency, "Fitch" shall be deemed to refer to any other "nationally recognized
statistical rating organization" as set forth on the most current list of such
organizations released by the Securities and Exchange Commission.
"FNMA": Xxxxxx Xxx or any successor thereto.
"Foreclosure Price": The amount reasonably expected to be
received from the sale of the related Mortgaged Property net of any expenses
associated with foreclosure proceedings.
"Grant": Pledge, bargain, sell, warrant, alienate, remise,
release, convey, assign, transfer, create, and xxxxx x xxxx upon and a security
interest in and right of set-off against, deposit, set over and confirm pursuant
to the Indenture. A Grant of the Collateral or of any other agreement or
instrument shall include all rights, powers and options (but none of the
obligations) of the granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of such collateral or other agreement or
instrument and all other moneys payable thereunder, to give and receive notices
and other communications, to make waivers or other agreements, to exercise all
rights and options, to bring proceedings in the name of the granting party or
otherwise, and generally to do and receive anything that the granting party is
or may be entitled to do or receive thereunder or with respect thereto.
"Gross Margin": With respect to each adjustable-rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan.
"Group I Applied Realized Loss Amount": With respect to each
Payment Date and the Group I Notes, the excess, if any, of (a) the aggregate of
the Note Balances of the Class IA-1 Notes and the Group I Mezzanine Notes (after
giving effect to all payments on such Payment Date) over (b) the aggregate
Principal Balance of the Group I Mortgage Loans as of the end of the related
Collection Period.
-21-
"Group I Extra Principal Payment Amount": As of any Payment
Date with respect tot the Class IA-1 Notes and the Group I Mezzanine Notes, the
lesser of (x) the Group I Monthly Excess Interest Amount for such Payment Date
and (y) the Group I Overcollateralization Deficiency for such Payment Date.
"Group I Initial Overcollateralization Amount": $3,816,537.38.
"Group I Loan Balance": As of any date, the aggregate of the
Principal Balances of all Mortgage Loans in Loan Group I as of such date.
"Group I Mezzanine Notes":The Class IM-1, Class IM-2 and Class
IB-1 Notes.
"Group I Monthly Excess Cashflow Amount": With respect to the
Group I Notes, the sum of the Group I Monthly Excess Interest Amount, the Group
I Overcollateralization Release Amount and (without duplication) any portion of
the Group I Principal Payment Amount remaining after principal payments on the
Class IA-1 Notes and the Group I Mezzanine Notes.
"Group I Monthly Excess Interest Amount": With respect to each
Payment Date and the Group I Notes, the amount, if any, by which the Interest
Remittance Amount for the Group I Mortgage Loans for such Payment Date exceeds
the aggregate amount paid on such Payment Date pursuant to I(i) through (v)
under INTEREST PAYMENTS in Section 3.05 of the Indenture.
"Group I Mortgage Loan": A Mortgage Loan in Loan Group I.
"Group I Notes": The Class IA-1 Notes, the Group I Mezzanine
Notes and the Class IA-IO Notes.
"Group I Overcollateralization Amount":As of any Payment Date,
the excess, if any, of (x) the aggregate Principal Balance of the Group I
Mortgage Loans as of the last day of the immediately preceding Collection Period
over (y) the aggregate Note Balances of the Class IA-1 Notes and the Group I
Mezzanine Notes (after taking into account all payments of principal on such
Payment Date).
"Group I Overcollateralization Deficiency": As of any Payment
Date and the Group I Notes, the excess, if any, of (x) the Group I Targeted
Overcollateralization Amount for such Payment Date over (y) the Group I
Overcollateralization Amount for such Payment Date, calculated for this purpose
after taking into account the reduction on such Payment Date of the Note
Balances of the Class IA-1 Notes and the Group I Mezzanine Notes resulting from
the payment of the Group I Principal Payment Amount (but not the Group I Extra
Principal Payment Amount) on such Payment Date, but prior to taking into account
any Group I Applied Realized Loss Amounts on such Payment Date.
"Group I Overcollateralization Release Amount": With respect
to any Payment Date and the Group I Notes on or after the Group I Stepdown Date
on which a Group I Trigger Event is not in effect, the lesser of (x) the
Principal Remittance Amount relating to the Group I Mortgage Loans for such
Payment Date and (y) the excess, if any, of (i) the Group I
Overcollateralization
-22-
Amount for such Payment Date, assuming that 100% of the Principal Remittance
Amount relating to the Group I Mortgage Loans is applied as a principal payment
on the Class IA-1 Notes and the Group I Mezzanine Notes on such Payment Date,
over (ii) the Group I Targeted Overcollateralization Amount for such Payment
Date. With respect to any Payment Date on which a Group I Trigger Event is in
effect, the Group I Overcollateralization Release Amount will be zero.
"Group I Pool Cap": With respect to any Payment Date, the
average of the Net Mortgage Rates of the Group I Mortgage Loans, weighted on the
basis of their Principal Balances as of the first day of the related Collection
Period (or, in the case of the first Payment Date, the Cut- Off Date).
"Group I Principal Payment Amount":As to any Payment Date and
the Group I Notes, the sum of (i) the Principal Remittance Amount related to the
Group I Mortgage Loans minus, for Payment Dates occurring on and after the Group
I Stepdown Date and for which a Group I Trigger Event is not in effect, the
Group I Overcollateralization Release Amount, if any, and (ii) the Group I Extra
Principal Payment Amount, if any. On the Final Maturity Date or on the Payment
Date immediately following the acceleration of the Group I Notes due to any
Event of Default, the "Group I Principal Payment Amount" payable on each class
of Notes will be an amount equal to the Note Balance thereof immediately prior
to such Final Maturity Date or such Payment Date.
"Group I Realized Loss Amortization Amount": Any of the Class
IA-1 Realized Loss Amortization Amount, the Class IM-1 Realized Loss
Amortization Amount, the Class IM-2 Realized Loss Amortization Amount, the Class
IB-1 Realized Loss Amortization Amount and the Class IN Realized Loss
Amortization Amount.
"Group I Remaining Initial Overcollateralization Amount": As
of any Payment Date and the Group I Notes, an amount equal to (a) the Group I
Initial Overcollateralization Amount minus (b) the sum of (i) any Group I
Overcollateralization Release Amounts paid and (ii) Realized Losses allocated to
the REMIC 3 Regular Interests.
"Group I Senior Enhancement Percentage": For any Payment Date
and the Group I Notes, the percentage obtained by dividing (x) the sum of (i)
the aggregate Note Balances of the Group I Mezzanine Notes and (ii) the Group I
Overcollateralization Amount, in each case after taking into account the payment
of the Group I Principal Payment Amount on such Payment Date by (y) the
Principal Balance of the Group I Mortgage Loans as of the last day of the
related Collection Period.
"Group I Senior Specified Enhancement Percentage": On any date
of determination thereof with respect to the Class IA-1 Notes, 20.00%.
"Group I Stepdown Date": With respect to the Group I Notes,
the later to occur of (x) the earlier to occur of (A) the Payment Date in
December 2004 and (B) the Payment Date on which the aggregate Note Balance of
the Class IA-1 Notes is reduced to zero, and (y) the first Payment Date on which
the Group I Senior Enhancement Percentage (after taking into account payments of
principal on such Payment Date) is greater than or equal to the Group I Senior
Specified Enhancement Percentage.
-23-
"Group I Subsequent Overcollateralization Amount": As of any
Payment Date with respect to the Group I Notes, after the application of
principal payments and Group I Applied Realized Loss Amounts, an amount equal to
the excess, if any of (a) the Principal Balance of the Group I Mortgage Loans
over (b) the sum of (i) the Note Balance of the Class IA-1, Class IM-1, Class
IM-2 and Class IB-1 Notes and (ii) the Group I Remaining Initial
Overcollateralization Amount.
"Group I Targeted Overcollateralization Amount": As of any
Payment Date with respect to the Group I Notes, (x) prior to the Group I
Stepdown Date, 1.50% of the initial Principal Balance of the Group I Mortgage
Loans and (y) on and after the Group I Stepdown Date, the lesser of (i) 1.50% of
the initial Principal Balance of the Group I Mortgage Loans and (ii) the greater
of (A) 3.00% of the Principal Balance of the Group I Mortgage Loans as of the
last day of the related Collection Period and (B) 0.50% of the initial Principal
Balance of the Group I Mortgage Loans.
"Group I Trigger Event": With respect to any Payment Date and
the Group I Notes, if (i) the six-month rolling average of 60+ Day Delinquent
Loans in Loan Group I divided by the aggregate Principal Balance of the Group I
Mortgage Loans as of the last day of the calendar month preceding the related
Payment Date equals or exceeds 45% of the Group I Senior Enhancement Percentage;
provided, that if the Note Balance of the Class IA-1 Notes has been reduced to
zero, a Group I Trigger Event will have occurred if the six-month rolling
average of 60+ Day Delinquent Loans equals or exceeds 15% or (ii) the aggregate
amount of Realized Losses on the Group I Mortgage Loans incurred since the
Cut-Off Date through the last day of the related Collection Period divided by
the initial Principal Balance of the Group I Mortgage Loans exceeds the
applicable percentages set forth below with respect to such Payment Date:
PAYMENT DATE OCCURRING IN PERCENTAGE
December 2004 through November 2005 3.00%
December 2005 through November 2006 3.75%
December 2006 through November 2007 4.25%
December 2007 and thereafter 4.75%
"Group I Unpaid Realized Loss Amount": For any Class IB-1,
Class IM-1, Class IM- 2 and Class IA-1 Notes and as to any Payment Date, the
excess of (x) the aggregate Group I Applied Realized Loss Amounts applied
respect to such Class for all prior Payment Dates over (y) the aggregate Group I
Realized Loss Amortization Amounts with respect to such Class for all prior
Payment Dates.
"Group II Applied Realized Loss Amount": With respect to each
Payment Date and the Group II Notes, the excess, if any, of (a) the aggregate of
the Note Balances of the Class IIA-1 Notes and the Group II Mezzanine Notes
(after giving effect to all payments on such Payment Date) over (b) the
aggregate Principal Balance of the Group II Mortgage Loans as of the end of the
related Collection Period.
"Group II Extra Principal Payment Amount": As of any Payment
Date with respect tot the Class IIA-1 Notes and the Group II Mezzanine Notes,
the lesser of (x) the Group II Monthly
-24-
Excess Interest Amount for such Payment Date and (y) the Group II
Overcollateralization Deficiency for such Payment Date.
"Group II Initial Overcollateralization Amount":
$3,921,232.53.
"Group II Loan Balance": As of any date, the aggregate of the
Principal Balances of all Mortgage Loans in Loan Group II as of such date.
"Group II Mezzanine Notes":The Class IIM-1, Class IIM-2 and
Class IIB-1 Notes.
"Group II Monthly Excess Cashflow Amount": With respect to the
Group II Notes, the sum of the Group II Monthly Excess Interest Amount, the
Group II Overcollateralization Release Amount and (without duplication) any
portion of the Group II Principal Payment Amount remaining after principal
payments on the Class IIA-1 Notes and the Group II Mezzanine Notes.
"Group II Monthly Excess Interest Amount": With respect to
each Payment Date and the Group II Notes, the amount, if any, by which the
Interest Remittance Amount for the Group I Mortgage Loans for such Payment Date
exceeds the aggregate amount paid on such Payment Date pursuant to I(i) through
(v) under INTEREST PAYMENTS in Section 3.05 of the Indenture.
"Group II Mortgage Loan": A Mortgage Loan in Loan Group II.
"Group II Notes": The Class IIA-1 Notes and the Group II
Mezzanine Notes.
"Group II Overcollateralization Amount":As of any Payment
Date, the excess, if any, of (x) the aggregate Principal Balance of the Group II
Mortgage Loans as of the last day of the immediately preceding Collection Period
over (y) the aggregate Note Balances of the Class IIA-1 Notes and the Group II
Mezzanine Notes (after taking into account all payments of principal on such
Payment Date).
"Group II Overcollateralization Deficiency": As of any Payment
Date and the Group II Notes, the excess, if any, of (x) the Group II Targeted
Overcollateralization Amount for such Payment Date over (y) the Group II
Overcollateralization Amount for such Payment Date, calculated for this purpose
after taking into account the reduction on such Payment Date of the Note
Balances of the Class IIA-1 Notes and the Group II Mezzanine Notes resulting
from the payment of the Group II Principal Payment Amount (but not the Group II
Extra Principal Payment Amount) on such Payment Date, but prior to taking into
account any Group II Applied Realized Loss Amounts on such Payment Date.
"Group II Overcollateralization Release Amount": With respect
to any Payment Date and the Group II Notes on or after the Group II Stepdown
Date on which a Group II Trigger Event is not in effect, the lesser of (x) the
Principal Remittance Amount relating to the Group II Mortgage Loans for such
Payment Date and (y) the excess, if any, of (i) the Group II
Overcollateralization Amount for such Payment Date, assuming that 100% of the
Principal Remittance Amount relating to the Group II Mortgage Loans is applied
as a principal payment on the Class IIA-1 Notes and the Group II Mezzanine Notes
on such Payment Date, over (ii) the Group II Targeted
-25-
Overcollateralization Amount for such Payment Date. With respect to any Payment
Date on which a Group II Trigger Event is in effect, the Group II
Overcollateralization Release Amount will be zero.
"Group II Pool Cap": With respect to any Payment Date, the
average of the Net Mortgage Rates of the Group II Mortgage Loans, weighted on
the basis of their Principal Balances as of the first day of the related
Collection Period (or, in the case of the first Payment Date, the Cut- Off
Date).
"Group II Principal Payment Amount":As to any Payment Date and
the Group II Notes, the sum of (i) the Principal Remittance Amount related to
the Group II Mortgage Loans minus, for Payment Dates occurring on and after the
Group II Stepdown Date and for which a Group II Trigger Event is not in effect,
the Group II Overcollateralization Release Amount, if any, and (ii) the Group II
Extra Principal Payment Amount, if any. On the Final Maturity Date or on the
Payment Date immediately following the acceleration of the Group II Notes due to
any Event of Default, the "Group II Principal Payment Amount" payable on each
class of Notes will be an amount equal to the Note Balance thereof immediately
prior to such Final Maturity Date or such Payment Date.
"Group II Realized Loss Amortization Amount": Any of the Class
IIA-1 Realized Loss Amortization Amount, the Class IIM-1 Realized Loss
Amortization Amount, the Class IIM-2 Realized Loss Amortization Amount, the
Class IIB-1 Realized Loss Amortization Amount and the Class IIN Realized Loss
Amortization Amount.
"Group II Remaining Initial Overcollateralization Amount": As
of any Payment Date and the Group II Notes, an amount equal to (a) the Group II
Initial Overcollateralization Amount minus (b) the sum of (i) any Group II
Overcollateralization Release Amounts paid and (ii) Realized Losses allocated to
the Group II Notes.
"Group II Senior Enhancement Percentage": For any Payment Date
and the Group II Notes, the percentage obtained by dividing (x) the sum of (i)
the aggregate Note Balances of the Group II Mezzanine Notes and (ii) the Group
II Overcollateralization Amount, in each case after taking into account the
payment of the Group II Principal Payment Amount on such Payment Date by (y) the
Principal Balance of the Group II Mortgage Loans as of the last day of the
related Collection Period.
"Group II Senior Specified Enhancement Percentage": On any
date of determination thereof with respect to the Class IIA-1 Notes, 70.00%.
"Group II Stepdown Date": With respect to the Group II Notes,
the later to occur of (x) the earlier to occur of (A) the Payment Date in
December 2004 and (B) the Payment Date on which the aggregate Note Balance of
the Class IIA-1 Notes is reduced to zero, and (y) the first Payment Date on
which the Group II Senior Enhancement Percentage (after taking into account
payments of principal on such Payment Date) is greater than or equal to the
Group II Senior Specified Enhancement Percentage.
-26-
"Group II Subsequent Overcollateralization Amount": As of any
Payment Date with respect to the Group II Notes, after the application of
principal payments and Group II Applied Realized Loss Amounts, an amount equal
to the excess, if any of (a) the Principal Balance of the Group II Mortgage
Loans over (b) the sum of (i) the Note Balance of the Class IIA-1 and Group II
Mezzanine Notes and (ii) the Group II Remaining Initial Overcollateralization
Amount.
"Group II Targeted Overcollateralization Amount": As of any
Payment Date with respect to the Group II Notes, (x) prior to the Group II
Stepdown Date, 12.50% of the initial Principal Balance of the Group II Mortgage
Loans and (y) on and after the Group II Stepdown Date, the lesser of (i) 12.50%
of the initial Principal Balance of the Group II Mortgage Loans and (ii) the
greater of (A) 25.00% of the Principal Balance of the Group II Mortgage Loans as
of the last day of the related Collection Period and (B) the greater of (i)
0.50% of the initial Principal Balance of the Group II Mortgage Loans or (ii)
the aggregate Principal Balance of the three Group II Mortgage Loans with the
highest Principal Balance as of the Cut-off Date .
"Group II Trigger Event": With respect to any Payment Date and
the Group II Notes, if (i) the six-month rolling average of 60+ Day Delinquent
Loans in Loan Group II divided by the aggregate Principal Balance of the Group
II Mortgage Loans as of the last day of the calendar month preceding the related
Payment Date equals or exceeds 16% of the Group II Senior Enhancement
Percentage; provided, that if the Note Balance of the Class IIA-1 Notes has been
reduced to zero, a Group II Trigger Event will have occurred if the six-month
rolling average of 60+ Day Delinquent Loans equals or exceeds 20% or (ii) the
aggregate amount of Realized Losses on the Group II Mortgage Loans incurred
since the Cut-Off Date through the last day of the related Collection Period
divided by the initial Principal Balance of the Group II Mortgage Loans exceeds
the applicable percentages set forth below with respect to such Payment Date:
PAYMENT DATE OCCURRING IN PERCENTAGE
December 2004 through November 2005 16.00%
December 2005 through November 2006 18.00%
December 2006 through November 2007 20.00%
December 2007 and thereafter 22.00%
"Group II Unpaid Realized Loss Amount": For any Class IIB-1,
Class IIM-1, Class IIM-2 and Class IIA-1 Notes and as to any Payment Date, the
excess of (x) the aggregate Group II Applied Realized Loss Amounts applied
respect to such Class for all prior Payment Dates over (y) the aggregate Group
II Realized Loss Amortization Amounts with respect to such Class for all prior
Payment Dates.
"HUD": The United States Department of Housing and Urban
Development, or any successor thereto and including the Federal Housing
Commissioner and the Secretary of Housing and Urban Development where
appropriate under the FHA Regulations.
"Indemnified Party": The meaning specified in Section 7.02 of
the Trust Agreement.
"Indenture": The indenture, dated as of December 14, 2001,
between the Issuer as debtor and the Indenture Trustee as Indenture Trustee.
-27-
"Indenture Trustee": U.S. Bank National Association, a
national banking association, or any successor Indenture Trustee appointed as
herein provided.
"Indenture Trustee Fee": With respect to any Payment Date, the
product of (x) one- twelfth of the Indenture Trustee Fee Rate and (y) the
aggregate of the Principal Balances of all Mortgage Loans as of the opening of
business on the first day of the related Collection Period.
"Indenture Trustee Fee Rate": With respect to any Payment
Date, 0.0075% per annum.
"Independent": When used with respect to any specified Person,
any such Person who (i) is in fact independent of the Issuer, the Depositor, the
Servicer and their respective Affiliates, (ii) does not have any direct
financial interest in or any material indirect financial interest in the Issuer,
the Depositor or the Servicer or any Affiliate thereof, and (iii) is not
connected with the Issuer, the Depositor or the Servicer or any Affiliate
thereof as an officer, employee, promoter, underwriter, Indenture Trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Issuer, the Depositor or
the Servicer or any Affiliate thereof merely because such Person is the
beneficial owner of 1% or less of any Class of securities issued by the Issuer,
the Depositor or the Servicer or any Affiliate thereof, as the case may be.
"Independent Certificate": A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 10.01 of the
Indenture, made by an Independent appraiser or other expert appointed by the
Issuer and approved by the Indenture Trustee in the exercise of reasonable care,
and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is Independent
within the meaning thereof.
"Independent Contractor": Either (i) any Person (other than
the Servicer) that would be an "independent contractor" with respect to the
Trust Estate within the meaning of Section 856(d)(3) of the Code if the Trust
Estate were a real estate investment trust (except that the ownership tests set
forth in that Section shall be considered to be met by any Person that owns,
directly or indirectly, 35 percent or more of any Class of Notes), so long as
the Trust Estate does not receive or derive any income from such Person and
provided that the relationship between such Person and the Trust Estate is at
arm's length, all within the meaning of Treasury Regulation Section
1.856-4(b)(5), or (ii) any other Person (including the Servicer) if the
Indenture Trustee has received an Opinion of Counsel, which Opinion of Counsel
shall be an expense of the Trust Estate or the Issuer, to the effect that the
taking of any action in respect of any REO Property by such Person, subject to
any conditions therein specified, that is otherwise herein contemplated to be
taken by an Independent Contractor will not cause such REO Property to cease to
qualify as "foreclosure property" within the meaning of Section 860G(a)(8) of
the Code (determined without regard to the exception applicable for purposes of
Section 860D(a) of the Code), or cause any income realized in respect of such
REO Property to fail to qualify as Rents from Real Property.
"Index": With respect to each adjustable-rate Mortgage Loan
and with respect to each related Adjustment Date, the index as specified in the
related Mortgage Note.
-28-
"Ineligible Foreclosure Property Loan": Any Mortgage Loan
listed on the Ineligible Foreclosure Property Loan Schedule as of the Closing
Date and for which there is no written agreement modifying such Mortgagor's
obligation to make payments under the Mortgage Loan.
"Ineligible Foreclosure Property Loan Schedule": The schedule,
attached hereto as an Exhibit to the Mortgage Loan Purchase Agreement, of
Ineligible Foreclosure Property Loans to be prepared by the Seller.
"Initial Certificates": The Certificates issued on the Closing
Date, each evidencing undivided beneficial interests in the Issuer and executed
by the Issuer.
"Initial Class IA-IO Notional Amount": With respect to any
Class IA-IO Note, the amount designated "Initial Class IA-IO Notional Amount" on
the face thereof.
"Initial Class IN Notional Amount": With respect to any Class
IN Note, the amount designated "Initial Class IN Notional Amount" on the face
thereof.
"Initial Class IIN Notional Amount": With respect to any Class
IIN Note, the amount designated "Initial Class IIN Notional Amount" on the face
thereof.
"Initial Note Balance": With respect to any Note of a Class
other than a Class IA-IO, Class IN, Class IX, Class IIN, Class IIX Class R or
Class R-4 Note, the amount designated "Initial Note Balance" on the face
thereof.
"Initial Notional Amount": Either the Initial Class IN
Notional Amount or the Initial Class IIN Notional Amount.
"Insurance Proceeds": Proceeds of any title policy, hazard
policy or other insurance policy covering a Mortgage Loan, to the extent such
proceeds are not to be applied to the restoration of the related Mortgaged
Property or released to the Mortgagor in accordance with the procedures that the
Servicer would follow in servicing mortgage loans held for its own account,
subject to the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period": With respect to any Payment Date
and each Class of Notes (other than the Class IA-IO Notes), the period from the
preceding Payment Date to the day prior to the current Payment Date (or, in the
case of the first Payment Date, the period from the Closing Date through
December 25, 2001). With respect to any Payment Date and the Class IA-IO Notes,
the period from and including the first day of each month preceding the month of
the related Payment Date, commencing November 1, 2001, to and including the last
day of such month.
"Interest Carry Forward Amount": For any Class of Notes (other
than the Class IX, Class IIX, Class R or Class R-4 Notes) and any Payment Date,
the sum of (a) the excess, if any, of the Accrued Note Interest and any Interest
Carry Forward Amount for the prior Payment Date, over the amount in respect of
interest actually paid on such Class on such prior Payment Date and (b) interest
on such excess (except with respect to the Class IN Notes and Class II Notes) at
the applicable Note Rate (x) with respect to the Class IA-IO Notes, on the basis
of a 360-day year
-29-
consisting of twelve 30-day months, and (y) with respect to all other Classes of
Notes, for the actual number of days elapsed since the prior Payment Date and a
360-day year.
"Interest Percentage": With respect to any Class of Notes and
any Payment Date, the ratio (expressed as a decimal carried to six places) of
the Accrued Note Interest for such Class to the sum of the Accrued Note Interest
for all Classes in the related Loan Group, in each case with respect to such
Payment Date.
"Interest Remittance Amount": As of any Determination Date
with respect to either Loan Group, the sum, without duplication, of (i) all
interest due and collected or advanced with respect to the related Collection
Period on the related Mortgage Loans (less the Servicing Fee, amounts available
for reimbursement of Advances and Servicing Advances pursuant to Section 3.05 of
the Servicing Agreement and expenses reimbursable pursuant to Section 5.03 of
the Servicing Agreement, the Indenture Trustee Fee and the PMI Insurer premium,
if any), (ii) all Compensating Interest paid by the Servicer on such
Determination Date with respect to the related Mortgage Loans and (iii) the
portion of any payment in connection with any substitution, Purchase Price,
Redemption Price or Net Liquidation Proceeds relating to interest with respect
to the related Mortgage Loans received during the related Prepayment Period.
"Issuer": Salomon Mortgage Loan Trust, Series 2001-CB4,
created by the Certificate of Trust pursuant to the Trust Agreement and the
Original Trust Agreement.
"Issuer Request": A written order or request signed in the
name of the Issuer by any one of its Authorized Officers and delivered to the
Indenture Trustee.
"Late Collections": With respect to any Mortgage Loan, all
amounts received subsequent to the Determination Date immediately following any
related Collection Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of principal and/or interest due (without regard to any
acceleration of payments under the related Mortgage and Mortgage Note) but
delinquent on a contractual basis for such Collection Period and not previously
recovered.
"LIBOR": With respect to each Interest Accrual Period, the
rate determined by the Indenture Trustee on the related LIBOR Determination Date
on the basis of the offered rate for one- month United States dollar deposits,
as such rate appears on the Telerate Page 3750, as of 11:00 a.m. (London time)
on such LIBOR Determination Date. If no such quotations are available on a LIBOR
Determination Date, LIBOR for the related Interest Accrual Period will be
established by the Indenture Trustee as follows:
(i) If on such LIBOR Determination Date two or more Reference
Banks provide such offered quotations, LIBOR for the related Interest
Accrual Period shall be the arithmetic mean of such offered quotations
(rounded upwards if necessary to the nearest whole multiple of 0.001%);
(ii) If on such LIBOR Determination Date fewer than two
Reference Banks provide such offered quotations, LIBOR for the related
Interest Accrual Period shall be the
-30-
arithmetic mean of the rates quoted by one or more major banks in New
York City, selected by the Indenture Trustee after consultation with
the Servicer, as of 11:00 A.M., New York City time, on such date for
loans in U.S. Dollars to leading European banks for a period of one
month in amounts approximately equal to the aggregate Note Balances of
the Class IA-1 Notes and the Mezzanine Notes; and
(iii) If no such quotations can be obtained, LIBOR for the
related Interest Accrual Period shall be LIBOR for the prior Payment Date.
"LIBOR Business Day": Any day on which banks in London,
England and The City of New York are open and conducting transactions in foreign
currency and exchange.
"XXXXX Xxxxxxxxx Amount": If on any Payment Date, the Class
IA-1 Note Rate, the Class IM-1 Note Rate, the Class IM-2 Note Rate, the Class
IB-1 Note Rate, the Class IIA-1 Note Rate, the Class IIM-1 Note Rate, the Class
IIM-2 Note Rate or the Class IIB-1 Note Rate is limited to the Group I Pool Cap
or Group II Pool Cap, as applicable, the excess of (i) the amount of interest
the such Class of Notes would have been entitled to receive on such Payment Date
based on the applicable Note Rate had such Note Rate not been limited by the
Group I Pool Cap or the Group II Pool Cap, as applicable, over (ii) the amount
of interest such Class of Notes received on such Payment Date based on the Group
I Pool Cap or Group II Pool Cap, as applicable, together with the unpaid portion
of any such excess from prior Payment Dates (and interest accrued thereon at the
then applicable Note Rate).
"LIBOR Determination Date": With respect to the Class IA-1
Notes, the Group I Mezzanine Notes and the Group II Notes, (i) for the first
Payment Date, the second LIBOR Business Day preceding the Closing Date and (ii)
for each subsequent Payment Date, the second LIBOR Business Day prior to the
immediately preceding Payment Date.
"Liquidated Mortgage Loan": As to any Payment Date, any
Mortgage Loan in respect of which the Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds and Insurance Proceeds which it
expects to recover with respect to the liquidation of the Mortgage Loan or
disposition of the related REO Property have been recovered.
"Liquidation Event": With respect to any Mortgage Loan, any of
the following events: (i) such Mortgage Loan is paid in full; (ii) a Final
Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage
Loan is removed from the Trust Estate by reason of its being purchased, sold or
replaced pursuant to or as contemplated by Section 3.01 of the Mortgage Loan
Purchase Agreement or Section 5.06 of the Servicing Agreement. With respect to
any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from the Trust Estate by reason of its being sold or purchased pursuant
to Section 3.13 or Section 5.06 of the Servicing Agreement.
"Liquidation Proceeds": The amount (other than amounts
received in respect of the rental of any REO Property prior to REO Disposition)
received by the Servicer in connection with (i) the taking of all or a part of a
Mortgaged Property by exercise of the power of eminent domain
-31-
or condemnation or (ii) the liquidation of a defaulted Mortgage Loan by means of
a trustee's sale, foreclosure sale or otherwise.
"Liquidation Report": The report with respect to a Liquidated
Mortgage Loan in such form and containing such information as is agreed to by
the Servicer and the Indenture Trustee and substantially in the form of Exhibit
G to the Indenture.
"Loan Group": Either Loan Group I or Loan Group II, as the
context requires.
"Loan Group Balance": Either the Group I Loan Balance or the
Group II Loan Balance, as applicable.
"Loan Group I": The pool of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group I.
"Loan Group II": The pool of Mortgage Loans identified in the
Mortgage Loan Schedule as having been assigned to Loan Group II.
"Loan Guaranty Certificate": The certificate evidencing a VA
Guaranty Agreement.
"Lost Note Affidavit": With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost or destroyed and has
not been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust Estate against any loss, cost
or liability resulting from the failure to deliver the original Mortgage Note)
in the form of Schedule I to the Mortgage Loan Purchase Agreement.
"Majority Noteholders": The Holders of Notes evidencing at
least 51% of the Voting Rights.
"Majority Class R Noteholders": The Holders of Class R Notes
evidencing at least a 51% Percentage Interest in the Class R Notes.
"Majority Class R-4 Noteholders": The Holders of Class R-4
Notes evidencing at least a 51% Percentage Interest in the Class R-4 Notes.
"Maximum Loan Rate": With respect to each adjustable-rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
maximum Mortgage Rate thereunder.
"Minimum Loan Rate": With respect to each adjustable-rate
Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Rate thereunder.
"Maximum Note Rate": With respect to the Group II Notes and
any Payment Date, a fixed rate equal to 15.00% per annum.
-32-
"Monthly Payment": With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act; (b) without giving effect to any extension granted or agreed to by
the Servicer pursuant to Section 3.01 of the Servicing Agreement; and (c) on the
assumption that all other amounts, if any, due under such Mortgage Loan are paid
when due.
"Moody's": Xxxxx'x Investors Services, Inc. and its
successors, and if such company shall for any reason no longer perform the
functions of a securities rating agency, "Moody's" shall be deemed to refer to
any other "nationally recognized statistical rating organization" as set forth
on the most current list of such organizations released by the Securities and
Exchange Commission.
"Mortgage": The mortgage, deed of trust or other instrument
creating a first or second lien on, or first or second priority security
interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File": The mortgage documents listed in Section 2.03
of the Indenture pertaining to a particular Mortgage Loan and any additional
documents required to be added to the Mortgage File pursuant to the Indenture.
"Mortgage Insurance Certificate": The certificate evidencing
an FHA Insurance Contract.
"Mortgage Rate": With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) in
the case of each fixed-rate Mortgage Loan shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately
following the Cut-Off Date and (ii) in the case of each adjustable-rate Mortgage
Loan (A) as of any date of determination until the first Adjustment Date
following the Cut-Off Date shall be the rate set forth in the Mortgage Loan
Schedule as the Mortgage Rate in effect immediately following the Cut-Off Date
and (B) as of any date of determination thereafter shall be the rate as adjusted
on the most recent Adjustment Date, to equal the sum, rounded to the nearest
0.125% as provided in the Mortgage Note, of the Index, determined as set forth
in the related Mortgage Note, plus the related Gross Margin subject to the
limitations set forth in the related Mortgage Note. With respect to each
Mortgage Loan that becomes an REO Property, as of any date of determination, the
annual rate determined in accordance with the immediately preceding sentence as
of the date such Mortgage Loan became an REO Property.
"Mortgage Loan": Each mortgage loan transferred and assigned
to the Indenture Trustee pursuant to Section 2.03 of the Indenture as from time
to time held as a part of the Trust Estate, the Mortgage Loans so held being
identified in the Mortgage Loan Schedule.
-33-
"Mortgage Loan Purchase Agreement": The agreement between the
Seller and the Depositor, dated as of December 14, 2001, regarding the transfer
of the Mortgage Loans by the Seller to or at the direction of the Depositor.
"Mortgage Loan Schedule": As of any date (i) with respect to
the Mortgage Loans, the list of such Mortgage Loans included in the Trust Estate
on such date, separately identifying the Group I Mortgage Loans and the Group II
Mortgage Loans, attached hereto as an exhibit to the Mortgage Loan Purchase
Agreement. The Mortgage Loan Schedule shall be prepared by the Seller and shall
set forth the following information with respect to each Mortgage Loan:
(1) the Seller's Mortgage Loan identifying number;
(2) the city, state, and zip code of the Mortgaged
Property;
(3) the type of Residential Dwelling constituting the
Mortgaged Property or a designation that the Mortgaged Property is a
multi-family property;
(4) the occupancy status of the Mortgaged Property at
origination;
(5) the original months to maturity;
(6) the date of origination;
(7) the first payment date;
(8) the stated maturity date;
(9) the stated remaining months to maturity;
(10) the original principal amount of the Mortgage Loan;
(11) the Principal Balance of each Mortgage Loan as of the
Cut-Off Date;
(12) the Arrearage of the Mortgage Loan as of the Cut-Off
Date;
(13) the Mortgage Rate of the Mortgage Loan as of the
Cut-Off Date;
(14) the current principal and interest payment of the
Mortgage Loan as of the Cut- Off Date;
(15) the contractual interest paid to date of the Mortgage
Loan;
(16) if the Mortgage Loan is not owner-financed, the
Combined Loan-to-Value Ratio at origination;
-34-
(17) a code indicating the loan performance status of the
Mortgage Loan as of the Cut-Off Date;
(18) a code indicating whether the Mortgage Loan is a
Simple Interest Mortgage Loan or an Actuarial Mortgage Loan;
(19) a code indicating whether the Mortgaged Property is
in bankruptcy or in its forbearance period as of the Cut-Off Date;
(20) a code indicating whether the Mortgage Loan is
conventional, insured by the FHA or guaranteed by the VA;
(21) a code indicating the Index that is associated with
such Mortgage Loan;
(22) the Gross Margin;
(23) the Periodic Rate Cap;
(24) the Minimum Loan Rate;
(25) the Maximum Loan Rate;
(26) a code indicating whether the Mortgage Loan has a
prepayment penalty and the type of prepayment penalty;
(27) the first Adjustment Date immediately following the
Cut-Off Date;
(28) the rate adjustment frequency;
(29) the payment adjustment frequency;
(30) a code indicating whether the Mortgage Loan is
owner-financed; and
(31) a code indicating whether the Mortgage Loan is a
first, second or third lien.
The Mortgage Loan Schedule shall set forth the following
information, as of the Cut- Off Date, with respect to the Mortgage Loans in the
aggregate and for each Loan Group: (1) the number of Mortgage Loans; (2) the
current Principal Balance of the Mortgage Loans; (3) the weighted average
Mortgage Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans. The Mortgage Loan Schedule shall be amended from time to
time by the Seller in accordance with the provisions of the Mortgage Loan
Purchase Agreement. With respect to any Eligible Substitute Mortgage Loan,
Cut-Off Date shall refer to the related Cut-Off Date for such Mortgage Loan,
determined in accordance with the definition of Cut-Off Date herein.
"Mortgage Note": The original executed note or other evidence
of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage
Loan.
-35-
"Mortgage Pool": The pool of Mortgage Loans, identified on the
Mortgage Loan Schedule from time to time, and any REO Properties acquired in
respect thereof.
"Mortgaged Property": The underlying property securing a
Mortgage Loan, including any REO Property, consisting of an Estate in Real
Property improved by a Residential Dwelling or multi-family dwelling.
"Mortgagor": The obligor on a Mortgage Note.
"Most Senior Class": With respect to the Group I Notes, the
Class IA-1 Notes and the Class IA-IO Notes, or after the Class IA-1 Notes and
the Class IA-IO Notes have been paid in full, the Class IM-1 Notes, or after the
Class IM-1 Notes have been paid in full, the Class IM-2 Notes, or after the
Class IM-2 Notes have been paid in full, the Class IB-1 Notes, or after the
Class IB-1 Notes have been paid in full, the Class IX Notes and Class IN Notes.
With respect to the Group II Notes, the Class IIA-1 Notes, or after the Class
IIA-1 Notes, the Class IIM-1 Notes, or after the Class IIM-1 Notes have been
paid in full, the Class IIM-2 Notes, or after the Class IIM-2 Notes have been
paid in full, the Class IIB-1 Notes, or after the Class IIB-1 Notes have been
paid in full, the Class IIX Notes and Class IIN Notes.
"Net Liquidation Proceeds": With respect to any Liquidated
Mortgage Loan or any other disposition of related Mortgaged Property (including
REO Property) the related Liquidation Proceeds net of Advances, Servicing
Advances, Servicing Fees and any other accrued and unpaid servicing fees
received and retained in connection with the liquidation of such Mortgage Loan
or Mortgaged Property.
"Net Mortgage Rate": With respect to any Mortgage Loan, the
Mortgage Rate borne by such Mortgage Loan minus the sum of the (i) Expense Fee
Rate, (ii) the rate at which the PMI Insurer premium, if any, is calculated and
(iii) in the case of any Group I Mortgage Loan, interest paid on the Class IA-IO
Notes, if any, expressed as a per annum rate based on the aggregate Principal
Balance of the Group I Mortgage Loans.
"New Lease": Any lease of REO Property entered into on behalf
of the Trust Estate, including any lease renewed or extended on behalf of the
Trust Estate if the Trust Estate has the right to renegotiate the terms of such
lease.
"Nonrecoverable Advance": Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan that, in
the good faith business judgment of the Servicer, will not or, in the case of a
proposed Advance or Servicing Advance, would not be ultimately recoverable from
Late Collections on such Mortgage Loan as provided herein.
"Non-U.S. Person": Any Person other than a U.S. Person.
"Notes": Any Group I Note, Group II Note, Class IX, Class IN,
Class R, Class R-4, Class IIX or Class IIN Note.
-36-
"Note Custodian": Initially, U.S. Bank National Association;
thereafter any other Note Custodian acceptable to the Depository and selected by
the Indenture Trustee.
"Note Balance": With respect to any Class of Notes (other than
the Class IA-IO, Class IN, Class IX, Class IIN, Class IIX, Class R and Class R-4
Notes) and any Payment Date, will be equal to the Original Class Note Balance
reduced by the sum of (i) all amounts actually paid in respect of principal of
such Class on all prior Payment Dates and (ii) Applied Realized Loss Amounts
allocated thereto. The Class IA-IO, Class IN, Class IX, Class IIN, Class IIX,
Class R and Class R-4 Notes do not have a Note Balance.
"Noteholder" or "Holder": The Person in whose name a Note is
registered in the Note Register, except that a Disqualified Organization or
Non-U.S. Person shall not be a Holder of a Class R or Class R-4 Note for any
purpose hereof.
"Note Owner": With respect to each Book-Entry Note, any
beneficial owner thereof.
"Note Rate": Any of the Class IA-IO Note Rate, the Class IA-1
Note Rate, the Class IM-1 Note Rate, the Class IM-2 Note Rate, the Class IB-1
Note Rate, the Class IIA-1 Note Rate, the Class IIM-1 Note Rate, the Class IIM-2
Note Rate, the Class IIB-1 Note Rate, the Class IX/N Interest Note Rate, the
Class IN Note Rate and the Class IIN Note Rate.
"Note Register" and "Note Registrar": The register maintained
and registrar appointed pursuant to Section 4.02 of the Indenture.
"Notional Amount": The Class IA-IO Notional Amount, the Class
IN Notional Amount, the Class IX/N Notional Amount or the Class IIN Notional
Amount, as applicable.
"Offered Notes": The Class IA-IO, Class IA-1, Class IM-1,
Class IM-2, Class IB-1, Class IIA-1, Class IIM-1 Notes, Class IIM-2 Notes and
Class IIB-1 Notes.
"Officers' Certificate": A Certificate signed by the Chairman
of the Board, the Vice Chairman of the Board, the President or a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries of the Servicer, the Seller, the
Indenture Trustee or the Depositor or an Authorized Officer of the Issuer.
"Opinion of Counsel": A written opinion of counsel, who may,
without limitation, be a salaried counsel for the Issuer, the Depositor or the
Servicer except that any opinion of counsel relating to (a) the qualification of
any REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an
opinion of Independent counsel.
"Optional Redemption Date": The first Payment Date on which
the Servicer may opt to purchase the Mortgage Loans in Loan Group I or Loan
Group II pursuant to Section 5.06 of the Servicing Agreement.
"Original Class IA-IO Notional Amount": The Notional Amount of
the Class IA-IO Notes on the Closing Date which shall equal the lesser of (i)
$89,039,838 and (ii) the aggregate
-37-
Principal Balance of the Group I Mortgage Loans with Mortgage Rates in excess of
8.00% per annum.
"Original Class IN Notional Amount": The Notional Amount of
the Class IN Notes on the Closing Date which shall be $13,500,000.00.
"Original Class IIN Notional Amount": The Notional Amount of
the Class IIN Notes on the Closing Date which shall be $2,800,000.00.
"Original Class IX/N Notional Amount": $254,399,537.28.
"Original Class Note Balance": With respect to each Class of
Notes, the Note Balance thereof on the Closing Date, as set forth opposite such
Class in Section 2.02 of the Indenture, except with respect to the Class IA-IO,
Class IN, Class IX, Class IIN, Class IIX Class R and Class R-4 Notes, which have
an Original Class Note Balance of zero.
"Original Trust Agreement": The Trust Agreement, dated as of
December 11, 2001, between the Owner Trustee and the Depositor.
"Outstanding": With respect to the Notes, as of the date of
determination, all Notes theretofore executed, authenticated and delivered under
the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Indenture Trustee for cancellation;
(ii) Notes or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Paying Agent (other than the Issuer) in trust
for the Holders of such Notes; provided, however, that if such Notes
are to be redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor, satisfactory to the
Indenture Trustee, has been made; and
(iii) Notes in exchange for or in lieu of which other Notes
have been executed, authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Note are held by a holder in due course.
"Owner Trust Estate": The corpus of the Issuer created by the
Trust Agreement which consists of the Collateral.
"Owner Trustee": Wilmington Trust Company not in its
individual capacity but solely as Owner Trustee of the Issuer, and its
successors and assigns or any successor owner trustee appointed pursuant to the
terms of the Trust Agreement.
"Ownership Interest": As to any Note, any ownership or
security interest in such Note, including any interest in such Note as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
-38-
"Paying Agent": Any paying agent appointed pursuant to Section
3.03 of the Indenture.
"Payment Account": The trust account or accounts created and
maintained by the Indenture Trustee pursuant to Section 3.01 of the Indenture
which shall be entitled "Payment Account, U.S. Bank National Association, as
Indenture Trustee, in trust for the registered Holders of 2001-CB4 Trust, C-BASS
Mortgage Loan Asset-Backed Notes, Series 2001-CB4" and which must be an Eligible
Account.
"Payment Date": The 25th day of any calendar month, or if such
25th day is not a Business Day, the Business Day immediately following such 25th
day, commencing in December 2001.
"Percentage Interest": With respect to any Note (other than a
Class IA-IO, Class IN, Class IX, Class IN, Class IX, Class R or Class R-4 Note),
a fraction, expressed as a percentage, the numerator of which is the Initial
Note Balance, as the case may be, represented by such Note and the denominator
of which is the Original Class Note Balance of the related Class. With respect
to a Class IA-IO, Class IN, or Class IIN Note, the undivided percentage interest
obtained by dividing the Initial Notional Amount evidenced by such Note by the
Original Class A-IO Note, the Original Class IN Note, or the Original Class IIN
Notional Amount, as the case may be, of such Class. With respect to a Class IX,
Class IIX, Class R or Class R-4 Note, the portion of the Class evidenced
thereby, expressed as a percentage, as stated on the face of such Note;
provided, however, that the sum of all such percentages for each such Class,
totals 100%.
"Periodic Rate Cap": With respect to each adjustable-rate
Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth
in the related Mortgage Note, which is the maximum amount by which the Mortgage
Rate for such Mortgage Loan may increase or decrease (without regard to the
Maximum Loan Rate or the Minimum Loan Rate) on such Adjustment Date from the
Mortgage Rate in effect immediately prior to such Adjustment Date.
"Permitted Investments": Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par,
regardless of whether issued or managed by the Issuer, the Depositor, the
Servicer, the Indenture Trustee or any of their respective Affiliates or for
which an Affiliate of the Indenture Trustee serves as an advisor:
(i) direct obligations of, or obligations fully guaranteed as
to timely payment of principal and interest by, the United States or
any agency or instrumentality thereof, provided such obligations are
backed by the full faith and credit of the United States;
(ii) (A) demand and time deposits in, certificates of deposit
of, bankers' acceptances issued by or federal funds sold by any
depository institution or trust company (including the Indenture
Trustee or its agent acting in their respective commercial capacities)
incorporated under the laws of the United States of America or any
state thereof and subject to supervision and examination by federal
and/or state authorities, so long as, at the time of such investment or
contractual commitment providing for such investment, such depository
institution or trust company or its ultimate parent has a short-term
uninsured debt rating in
-39-
one of the two highest available rating categories of S&P and Xxxxx'x
and the highest available rating category of Fitch and provided that
each such investment has an original maturity of no more than 365 days
and (B) any other demand or time deposit or deposit which is fully
insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30 days
with respect to any security described in clause (i) above and entered
into with a depository institution or trust company (acting as
principal) rated A or higher by S&P and Fitch and A1 or higher by
Xxxxx'x; provided, however, that collateral transferred pursuant to
such repurchase obligation must be of the type described in clause (i)
above and must (A) be valued daily at current market prices plus
accrued interest or (B) pursuant to such valuation, be equal, at all
times, to 105% of the cash transferred by the Indenture Trustee in
exchange for such collateral and (C) be delivered to the Indenture
Trustee or, if the Indenture Trustee is supplying the collateral, an
agent for the Indenture Trustee, in such a manner as to accomplish
perfection of a security interest in the collateral by possession of
certificated securities;
(iv) securities bearing interest or sold at a discount that
are issued by any corporation incorporated under the laws of the United
States of America or any State thereof and that are rated by each
Rating Agency in its highest long-term unsecured rating categories at
the time of such investment or contractual commitment providing for
such investment;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
acquisition thereof) that is rated by each Rating Agency in its highest
short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds registered under the
Investment Company Act of 1940 including funds managed or advised by
the Indenture Trustee or an affiliate thereof having the highest rating
category by the applicable Rating Agency; and
(vii) if previously confirmed in writing to the Indenture
Trustee, any other demand, money market or time deposit, or any other
obligation, security or investment, as may be acceptable to the Rating
Agencies in writing as a permitted investment of funds backing
securities having ratings equivalent to its highest initial rating of
the Class A Notes;
provided, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of the
yield to maturity at par of the underlying obligations.
"Permitted Transferee": Any transferee of a Residual Note
other than a Disqualified Organization or a Non-U.S. Person.
-40-
"Person": Any individual, corporation, partnership, joint
venture, association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pledge Administrator": The Person acting as pledge
administrator and secured party under the Cap Contract Pledge Agreement, which
initially shall be U.S. Bank National Association.
"Pool Balance": As of any date of determination, the aggregate
Principal Balance of the Mortgage Loans.
"Prepayment Assumption": With respect to the Group I Mortgage
Loans, 27% CPR and with respect to the Group II Mortgage Loans, 25% CPR, in each
case as set forth in the Prospectus Supplement.
"Prepayment Interest Shortfall": With respect to any Payment
Date, for each Mortgage Loan that was during the related Prepayment Period the
subject of a Principal Prepayment in full that was applied by the Servicer to
reduce the outstanding principal balance of such loan on a date preceding the
related Due Date, an amount equal to interest at the applicable Mortgage Rate
(net of the Servicing Fee Rate) on the amount of such Principal Prepayment for
the number of days commencing on the date on which the prepayment is applied and
ending on the last day of the related Prepayment Period.
"Prepayment Period": With respect to any Payment Date, the
calendar month preceding the month in which such Payment Date occurs.
"Primary Insurance Policy": Each policy of primary guaranty
mortgage insurance issued by a Qualified Insurer in effect with respect to any
Mortgage Loan, or any replacement policy therefor obtained by the Servicer
pursuant to Section 3.08 of the Servicing Agreement.
"PMI Insurer": Mortgage Guaranty Insurance Corporation, a
monoline private insurance company organized and created under the laws of the
State of Wisconsin, or its successors in interest.
"Principal Balance": As to any Mortgage Loan and any day,
other than a Liquidated Mortgage Loan, the related Cut-Off Date Principal
Balance, minus all collections credited against the principal balance of any
such Mortgage Loan and the principal portion of Advances plus, Deferred
Interest, if any. For purposes of this definition, a Liquidated Mortgage Loan
shall be deemed to have a Principal Balance equal to the Principal Balance of
the related Mortgage Loan as of the final recovery of related Liquidation
Proceeds and a Principal Balance of zero thereafter. As to any REO Property and
any day, the Principal Balance of the related Mortgage Loan immediately prior to
such Mortgage Loan becoming REO Property minus any REO Principal Amortization
received with respect thereto on or prior to such day.
"Principal Prepayment": Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which is not
-41-
accompanied by an amount of interest representing the full amount of scheduled
interest due on any Due Date in any month or months subsequent to the month of
prepayment.
"Principal Remittance Amount": With respect to any Payment
Date and either Loan Group, to the extent of funds available therefor, the sum
(less amounts available for reimbursement of Advances and Servicing Advances
pursuant to Section 3.05 and expenses reimbursable pursuant to Section 5.03 of
the Servicing Agreement) of: (i) each payment of principal on a related Mortgage
Loan due during the related Collection Period and received by the Servicer on or
prior to the related Determination Date, and any Advances with respect thereto,
(ii) all full and partial Principal Prepayments on the related Mortgage Loans
received by the Servicer during the related Prepayment Period, (iii) the Net
Liquidation Proceeds allocable to principal on the related Mortgage Loans
actually collected by the Servicer during the related Prepayment Period, (iv)
with respect to Defective Mortgage Loans in the related Loan Group repurchased
with respect to such Prepayment Period, the portion of the Purchase Price
allocable to principal, (v) any Substitution Adjustment Amounts received on or
prior to the previous Determination Date and not yet paid and (vi) on the
Payment Date on which the related Loan Group is to be terminated in accordance
with Section 5.06 of the Indenture, that portion of the Redemption Price in
respect of principal.
"Private Notes": Any of the Class IN, Class IX, Class IIN,
Class IIX, Class R or Class R-4 Notes.
"Property Insurance Proceeds": Proceeds of any title policy,
hazard policy or other insurance policy covering a Mortgage Loan, to the extent
such proceeds are received by the Servicer and are not to be applied to the
restoration of the related Mortgaged Property or released to the Mortgagor in
accordance with the Servicer's servicing procedures, subject to the terms and
conditions of the related Mortgage Note and Mortgage.
"Prospectus Supplement": That certain Prospectus Supplement
dated December 12, 2001 relating to the public offering of the Offered Notes.
"Purchase Price": With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 3.01 of the
Mortgage Loan Purchase Agreement or 8.07 of the Indenture, and as confirmed by
an Officers' Certificate from the Servicer to the Indenture Trustee, an amount
equal to the sum of (i) 100% of the Principal Balance thereof as of the date of
purchase (or such other price as provided in Section 5.06 of the Servicing
Agreement), (ii) in the case of (x) a Mortgage Loan, accrued interest on such
Principal Balance at the applicable Mortgage Rate in effect from time to time
from the Due Date as to which interest was last covered by a payment by the
Mortgagor or an Advance by the Servicer, which payment or Advance had as of the
date of purchase been paid pursuant to Section 3.05 of the Indenture, through
the end of the calendar month in which the purchase is to be effected, and (y)
an REO Property, its fair market value, determined in good faith by the
Servicer, (iii) any unreimbursed Servicing Advances and Advances and any unpaid
Servicing Fees and Special Servicing Fees allocable to such Mortgage Loan or REO
Property, (iv) any amounts previously withdrawn from the Collection Account in
respect of such Mortgage Loan or REO Property pursuant to Section 3.13 of the
Servicing Agreement, and (v) in the case of a Mortgage Loan required to be
purchased pursuant to Section 3.01 of the Mortgage Loan Purchase Agreement,
expenses reasonably incurred or to be incurred by the
-42-
Servicer or the Indenture Trustee in respect of the breach or defect giving rise
to the purchase obligation.
"Qualified Insurer": Any insurance company acceptable to FNMA
or FHLMC.
"Rate Payment": With respect to any Payment Date and the Group
I Notes, the excess, if any, of Accrued Note Interest on a Class IA-IO, Class
IA-1, Class IM-1, Class IM-2 or Class IB-1 Note over the amount of interest
accrued for the same period with respect to the REMIC 3 Regular Interest with
the same alphabetical or numeric Class designation, together with the unpaid
portion of any such excess from prior Payment Dates (and interest accrued
thereon at the then applicable Note Rate for such Class of Notes).
"Rating Agency or Rating Agencies": Xxxxx'x, Fitch and S&P, or
their respective successors. If such agencies or their successors are no longer
in existence, "Rating Agencies" shall be such nationally recognized statistical
rating organizations as set forth on the most current list of such organizations
released by the Securities and Exchange Commission and designated by the
Depositor, notice of which designation shall be given to the Indenture Trustee
and the Servicer.
"Realized Loss": With respect to a Liquidated Mortgage Loan,
the amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal balance
of the related Mortgage Loan.
"Realized Loss Amortization Amount": Either the Group I
Realized Loss Amortization Amount or the Group II Realized Loss Amortization
Amount.
"Record Date": With respect to each Class of Offered Notes
(other than the Class IA-IO Notes) and any Payment Date, the Business Day
immediately preceding such Payment Date; provided, however, that if any Note
becomes a Definitive Note, the Record Date for such Note shall be the last
Business Day of the month immediately preceding the month in which the related
Payment Date occurs. With respect to the Class IA-IO Notes and every other Class
of Notes, the last Business Day of the month immediately preceding the month in
which the related Payment Date occurs (or the Closing Date, in the case of the
first Payment Date).
"Reference Banks": Those banks (i) with an established place
of business in London, England, (ii) not controlling, under the control of or
under common control with the Depositor or the Indenture Trustee, (iii) whose
quotations appear on the Telerate Page 3750 on the relevant LIBOR Determination
Date and (iv) which have been designated as such by the Indenture Trustee;
provided, however, that if fewer than two of such banks provide a LIBOR rate,
then any leading banks selected by the Indenture Trustee which are engaged in
transactions in United States dollar deposits in the international Eurocurrency
market.
"Regular Note": Any of the Group I Notes, the Class IN Notes
and the Class IX Notes.
"Related Documents": With respect to any Mortgage Loan, the
related Mortgage Notes, Mortgages and other related documents.
-43-
"Relief Act": The Soldiers' and Sailors Civil Relief Act of
1940, as amended.
"Relief Act Interest Shortfall": With respect to any Payment
Date, for any Group I Mortgage Loan with respect to which there has been a
reduction in the amount of interest collectible thereon for the most recently
ended Collection Period as a result of the application of the Relief Act, the
amount by which (i) interest collectible on such Group I Mortgage Loan during
such Collection Period is less than (ii) one month's interest on the Principal
Balance of such Group I Mortgage Loan at the Mortgage Rate for such Group I
Mortgage Loan before giving effect to the application of the Relief Act.
"REMIC": A "real estate mortgage investment conduit" within
the meaning of Section 860D of the Code.
"REMIC 1 Regular Interests": The Class T-1A Interest and the
Class T-1B Interest.
"REMIC 2 Regular Interests": The Class T2-Accrual Interest,
Class T2-A-IO Interest, Class T2-A-1A Interest, Class T2-M-1 Interest, Class
T2-M-2 Interest and Class T2-B-1 Interest.
"REMIC 3 Regular Interests": The Class IA-IO Notes, Class IA-1
Notes, Class IM-1 Notes, Class IM-2 Notes, Class IB-1 Notes and Class IT3-X/N
Interest.
"REMIC 4 Regular Interest": The Class IX/N Interest.
"REMIC Provisions": Provisions of the federal income tax law
relating to real estate mortgage investment conduits which appear at Section
860A through 860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and regulations and rulings promulgated thereunder, as the foregoing
may be in effect from time to time.
"REMIC Regular Interest": As defined in the Preliminary
Statement.
"Remittance Report": A report prepared by the Servicer and
delivered to the Indenture Trustee pursuant to Section 4.01 of the Servicing
Agreement.
"Rents from Real Property": With respect to any REO Property,
gross income of the character described in Section 856(d) of the Code.
"REO Account": The account or accounts maintained by the
Servicer in respect of an REO Property pursuant to Section 3.13 of the Servicing
Agreement.
"REO Disposition": The sale or other disposition of an REO
Property on behalf of the Trust Estate.
"REO Principal Amortization": With respect to any REO
Property, for any calendar month, the aggregate of all amounts received in
respect of such REO Property during such calendar month, whether in the form of
rental income, sale proceeds (including, without limitation, that portion of the
Redemption Price paid in connection with a purchase of all of the Mortgage Loans
and
-44-
REO Properties pursuant to Section 5.06 of the Servicing Agreement that is
allocable to such REO Property) or otherwise, net of any portion of such amounts
(i) payable pursuant to Section 3.13 of the Servicing Agreement in respect of
the proper operation, management and maintenance of such REO Property or (ii)
payable or reimbursable to the Servicer pursuant to Section 3.13 of the
Servicing Agreement for unpaid Servicing Fees in respect of the related Mortgage
Loan and unreimbursed Servicing Advances and Advances in respect of such REO
Property or the related Mortgage Loan.
"REO Property": A Mortgaged Property acquired by the Servicer
on behalf of the Trust Estate through foreclosure or deed-in-lieu of
foreclosure, as described in Section 3.13 of the Servicing Agreement.
"Re-performance Test": The following criteria one of which
must be met for a Mortgage Loan to qualify as a Re-performing Mortgage Loan: (1)
the Mortgagor has made at least three aggregate Monthly Payments in the three
calendar months preceding the Cut-Off Date (regardless of either the timing of
receipt of such payments or the payment history of such loans prior to August 1,
2001), or (2) the Mortgagor has made at least four aggregate Monthly Payments in
the four calendar months preceding the Cut-Off Date (regardless of either the
timing of receipt of such payments or the payment history of such loans prior to
July 1, 2001), or (3) the Mortgagor has made at least five aggregate Monthly
Payments in the five calendar months preceding the Cut-Off Date (regardless of
either the timing of receipt of such payments or the payment history of such
loans prior to June 1, 2001).
"Re-performing Mortgage Loan": A Mortgage Loan which has
defaulted in the past and which is at least 90 days Delinquent with respect to
certain Monthly Payments but which satisfies one of the Re-Performance Test
criteria.
"Request for Release": A release signed by a Servicing
Officer, substantially in the form of Exhibit A to the Servicing Agreement.
"Required Excess Reserve Fund Balance": An amount initially
equal to $5,000 and thereafter as calculated pursuant to Section 3.07 of the
Indenture.
"Required Excess Reserve Fund Deposit": With respect to any
Payment Date occurring between the Closing Date and the Payment Date on which
the amount on deposit in the Excess Reserve Fund first equals the Required
Excess Reserve Fund Balance, the amount, if any, by which (i) the Required
Excess Reserve Fund Balance exceeds (ii) the amount on deposit in the Excess
Reserve Fund immediately prior to such date.
"Residential Dwelling": Any one of the following: (i) a
one-family dwelling, (ii) a two- to four-family dwelling, (iii) a one-family
dwelling unit in a FNMA eligible condominium project, (iv) a one-family dwelling
in a planned unit development, which is not a co-operative, or (v) a mobile or
manufactured home (as defined in 42 United States Code, Section 5402(6)).
"Residual Notes": The Class R and the Class R-4 Notes.
-45-
"Residual Interest": The sole Class of "residual interests" in
each REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer": When used with respect to the Indenture
Trustee, any officer assigned to the Corporate Trust Division (or any successor
thereto), including any Vice President, Assistant Vice President, Trust Officer,
any Assistant Secretary, any trust officer or any other officer of the Indenture
Trustee customarily performing functions similar to those performed by any of
the above designated officers and in each case having direct responsibility for
the administration of this Indenture.
"S&P": Standard & Poor's Ratings Services and its successors,
and if such company shall for any reason no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Securities and Exchange
Commission.
"Seller": Credit-Based Asset Servicing and Securitization LLC,
or its successor in interest, in its capacity as seller under the Mortgage Loan
Purchase Agreement.
"Servicer": Xxxxxx Loan Servicing LP, a Delaware limited
partnership, or any successor servicer appointed as herein provided, in its
capacity as Servicer under the Servicing Agreement.
"Servicer Affiliate": A Person (i) controlling, controlled by
or under common control with the Servicer or which is 50% or more owned by the
Servicer and (ii) which is qualified to service residential mortgage loans.
"Servicer Event of Termination": One or more of the events
described in Section 6.01 of the Servicing Agreement.
"Servicer Remittance Date": With respect to any Payment Date,
one Business Day prior to such Payment Date.
"Servicing Advances": All customary, reasonable and necessary
"out of pocket" costs and expenses incurred by the Servicer in the performance
of its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of the Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures, (iii) the
management and liquidation of the REO Property and (iv) compliance with the
obligations under Section 3.08 of the Servicing Agreement.
"Servicing Agreement": The agreement among the Servicer, the
Indenture Trustee and the Issuer, dated as of December 14, 2001, regarding the
servicing of the Mortgage Loans by the Servicer.
"Servicing Fee": With respect to each Mortgage Loan (including
each REO Property) and for any calendar month, an amount equal to one month's
interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in full made by the Mortgagor during such
-46-
calendar month, interest for the number of days covered by such payment of
interest) at the Servicing Fee Rate on the same principal amount on which
interest on such Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate": With respect to each Group I Mortgage
Loan, 0.50% per annum and with respect to each Group II Mortgage Loan, 0.75% per
annum.
"Servicing Officer": Any officer of the Servicer involved in,
or responsible for, the administration and servicing of Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished by
the Servicer to the Issuer, the Indenture Trustee and the Depositor on the
Closing Date, as such list may from time to time be amended.
"Servicing Rights Pledgee": One or more lenders, selected by
the Servicer, to which the Servicer will pledge and assign all of its right,
title and interest in, to and under the Servicing Agreement, including First
Union National Bank, as the representative of certain lenders.
"Servicing Standard": Shall mean the standards set forth in
Section 3.01 of the Servicing Agreement.
"Simple Interest Method": The method of allocating a payment
to principal and interest, pursuant to which the portion of such payment that is
allocated to interest is equal to the product of the fixed rate of interest
multiplied by the unpaid principal balance multiplied by the period of time
elapsed since the preceding payment of interest was made and divided by either
360 or 365, as specified in the related Mortgage Note, and the remainder of such
payment is allocated to principal.
"Simple Interest Mortgage Loan": Any Mortgage Loan under which
the portion of a payment allocable to interest and the portion of such payment
allocable to principal is determined in accordance with the Simple Interest
Method.
"Special Hazard Losses": Realized Losses that result from
direct physical damage to Mortgaged Properties caused by natural disasters and
other hazards (i) which are not covered by hazard insurance policies (such as
earthquakes) and (ii) for which claims have been submitted and rejected by the
related hazard insurer and any shortfall in insurance proceeds for partial
damage due to the application of the co-insurance clauses contained in hazard
insurance policies.
"Special Servicing Fee": With respect to each Mortgage Loan
(except a Re- performing Mortgage Loan and any second or third lien Mortgage
Loan) that is delinquent 90 or more days, $150 per month payable until the
earlier of (i) 18 consecutive months and (ii) the Delinquency status of such
Mortgage Loan has been reduced to less than 90 days.
"Startup Day": As defined in Section 10.01(b) of the
Indenture.
"Stayed Funds": Any payment required to be made under the
terms of the Notes and the Servicing Agreement but which is not remitted by the
Servicer because the Servicer is the subject
-47-
of a proceeding under the Bankruptcy Code and the making of such remittance is
prohibited by Section 362 of the Bankruptcy Code.
"Substitution Adjustment Amount": As defined in Section 2.03
of the Servicing Agreement.
"Tax Matters Person": The tax matters person appointed
pursuant to Section 10.01(e) of the Indenture.
"Tax Returns": The federal income tax returns on Internal
Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed on behalf of the REMIC under the REMIC Provisions, together
with any and all other information reports or returns that may be required to be
furnished to the Noteholders of the Group I Notes, the Class IX or Class IN
Notes or filed with the Internal Revenue Service or any other governmental
taxing authority under any applicable provisions of federal, state or local tax
laws.
"Telerate Page 3750": The display page currently so designated
on the Bridge Telerate Service (or such other page as may replace the Telerate
Page 3750 page on that service for the purpose of displaying London interbank
offered rates of major banks).
"Redemption Price": As defined in Section 5.06 of the
Servicing Agreement.
"Trust Agreement": The Amended and Restated Trust Agreement,
dated as of December 14, 2001, between the Owner Trustee and the Depositor.
"Trust Estate": The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to a portion of which four REMIC elections are to be made, such
entire Trust Estate consisting of: (i) such Mortgage Loans as from time to time
are subject to the Indenture, together with the Mortgage Files relating thereto,
and together with all collections thereon and proceeds thereof, (ii) any REO
Property, together with all collections thereon and proceeds thereof, (iii) the
Indenture Trustee's rights with respect to the Mortgage Loans under all
insurance policies required to be maintained pursuant to the Servicing Agreement
and any proceeds thereof, (iv) the Depositor's rights under the Mortgage Loan
Purchase Agreement (including any security interest created thereby) and all
rights under the Servicing Agreement, (v) payments made under the Cap Contract
and the Cap Contract Pledge and Administrative Agreement and (vi) the Collection
Account, the Payment Account, the Excess Reserve Fund Account and any REO
Account and such assets that are deposited therein from time to time and any
investments thereof, together with any and all income, proceeds and payments
with respect thereto. Notwithstanding the foregoing, however, the Trust Estate
specifically excludes all payments and other collections of principal and
interest representing Arrearage.
"Underwriters": Xxxxxxx Xxxxx Xxxxxx Inc., Banc of America
Securities LLC and , as underwriters with respect to the Offered Notes.
-48-
"United States Person" or "U.S. Person": (i) A citizen or
resident of the United States, (ii) a corporation, partnership or other entity
treated as a corporation or partnership for United States federal income tax
purposes organized in or under the laws of the United States or any state
thereof or the District of Columbia (unless, in the case of a partnership,
Treasury regulations provide otherwise) and in the case of a partnership to
which any REMIC residual interest is being transferred, all persons that own an
interest in such partnership either directly or through any entity that is not a
corporation for United States federal income tax purposes and required to be
United States Persons or (iii) an estate the income of which is includible in
gross income for United States tax purposes, regardless of its source, or (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
persons have authority to control all substantial decisions of the trust.
Notwithstanding the preceding sentence, to the extent provided in Treasury
regulations, certain Trusts in existence on August 20, 1996, and treated as
United States persons prior to such date, that elect to continue to be treated
as United States persons will also be a U.S. Person.
"VA": The United States Department of Veterans Affairs.
"VA Approved Lender": Those institutions which are approved by
the VA to act as servicer and mortgagee of record pursuant to VA Regulations.
"VA Guaranty Agreements": With respect to a VA Loan, the
agreements evidencing the guaranty of such Mortgage Loan by the VA.
"VA Loan": A Mortgage Loan guaranteed by the VA.
"VA Regulations": Any and all regulations promulgated by the
VA under the Servicemen's Readjustment Act of 1944, as amended.
"Value": With respect to any Mortgaged Property, the value
thereof as determined by an independent appraisal made at the time of the
origination of the related Mortgage Loan or the sale price, if the appraisal is
not available; except that, with respect to any Mortgage Loan that is a purchase
money mortgage loan, the lesser of (i) the value thereof as determined by an
independent appraisal made at the time of the origination of such Mortgage Loan,
if any, and (ii) the sales price of the related Mortgaged Property.
"Voting Rights": The portion of the voting rights of all of
the Notes which is allocated to any Note. With respect to each group of Notes,
the Voting Rights allocated among Holders of the related Offered Notes (other
than the Class IA-IO Notes) shall be 98%, and shall be allocated among each such
Class according to the fraction, expressed as a percentage, the numerator of
which is the aggregate Note Balance of all the Notes of such Class then
outstanding and the denominator of which is the aggregate Note Balance of all
the related Offered Notes (other than the Class IA-IO Notes) then outstanding.
The Voting Rights allocated to each such Class of Notes shall be allocated among
all holders of each such Class in proportion to the outstanding Note Balance of
such Notes; provided, however, that any Note registered in the name of the
Issuer, the Servicer, the Depositor or the Indenture Trustee or any of their
respective affiliates shall not be included in the calculation of Voting Rights.
The percentage of all the Voting Rights allocated among the Holders
-49-
of the Class IX, Class IN, Class IIN and Class IIX Notes shall be 2%
respectively. The Class IA-IO, Class R and Class R-4 Notes shall have no Voting
Rights.
"Weighted Average Net Mortgage Rate": The weighted average
(based on Principal Balance as of the first day of the related Collection Period
or, in the case of the first Payment Date, the Cut-off Date) of the Mortgage
Rate of the Group I Mortgage Loans or Group II Mortgage Loans, as applicable,
minus (i) the Expense Fee Rate and (ii) the rate at which the PMI Insurer
premium, if any, is calculated, expressed as an annual rate and calculated on
the basis of twelve months consisting of 30 days each and a 360 day year.
-50-
