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SOUTHERN PACIFIC SECURED ASSETS CORP.
as Depositor
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
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AMENDED AND RESTATED
TRUST AGREEMENT
Dated as of June 25, 1998
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Trust Certificates,
Series 1998-H1
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Table of Contents
Section Page
ARTICLE I
DEFINITIONS..............................................................................................1
1.01. DEFINITIONS................................................................................1
1.02. OTHER DEFINITIONAL PROVISIONS..............................................................1
ARTICLE II
ORGANIZATION.............................................................................................3
2.01. NAME.......................................................................................3
2.02. OFFICE.....................................................................................3
2.03. PURPOSES AND POWERS........................................................................3
2.04. APPOINTMENT OF OWNER TRUSTEE...............................................................4
2.05. INITIAL CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE.........................................4
2.06. DECLARATION OF TRUST.......................................................................4
2.07. LIABILITY OF THE HOLDERS OF THE CERTIFICATES...............................................4
2.08. TITLE TO TRUST PROPERTY....................................................................4
2.09. SITUS OF TRUST.............................................................................5
2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR............................................5
2.11. PAYMENT OF TRUST FEES......................................................................6
2.12. INVESTMENT COMPANY.........................................................................6
ARTICLE III
CONVEYANCE OF THE HOME LOANS;
CERTIFICATES............................................................................................7
3.01. CONVEYANCE OF THE HOME LOANS...............................................................7
3.02. INITIAL OWNERSHIP..........................................................................7
3.03. THE CERTIFICATES...........................................................................7
3.04. AUTHENTICATION OF CERTIFICATES.............................................................8
3.05. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF CERTIFICATES...................8
3.06. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.........................................10
3.07. PERSONS DEEMED CERTIFICATEHOLDERS.........................................................10
3.08. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.................................10
3.09. MAINTENANCE OF OFFICE OR AGENCY...........................................................11
3.10. CERTIFICATE PAYING AGENT..................................................................11
ARTICLE IV
AUTHORITY AND DUTIES OF OWNER TRUSTEE...................................................................13
4.01. GENERAL AUTHORITY.........................................................................13
SECTION PAGE
4.02. GENERAL DUTIES............................................................................13
4.03. ACTION UPON INSTRUCTION...................................................................13
4.04. NO DUTIES EXCEPT AS SPECIFIED UNDER SPECIFIED DOCUMENTS OR IN INSTRUCTIONS................14
4.05. RESTRICTIONS..............................................................................14
4.06. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN MATTERS........................14
4.07. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN MATTERS..............................15
4.08. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY...................................15
4.09. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER.................................................15
4.10. MAJORITY CONTROL..........................................................................16
4.11. OPTIONAL REDEMPTION.......................................................................16
ARTICLE V
APPLICATION OF TRUST FUNDS..............................................................................17
5.01. DISTRIBUTIONS.............................................................................17
5.02. METHOD OF PAYMENT.........................................................................17
5.03. TAX RETURNS...............................................................................17
5.04. STATEMENTS TO CERTIFICATEHOLDERS..........................................................18
ARTICLE VI
CONCERNING THE OWNER TRUSTEE............................................................................19
6.01. ACCEPTANCE OF TRUSTS AND DUTIES...........................................................19
6.02. FURNISHING OF DOCUMENTS...................................................................20
6.03. REPRESENTATIONS AND WARRANTIES............................................................20
6.04. RELIANCE; ADVICE OF COUNSEL...............................................................21
6.05. NOT ACTING IN INDIVIDUAL CAPACITY.........................................................21
6.06. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR RELATED DOCUMENTS............................22
6.07. OWNER TRUSTEE MAY OWN CERTIFICATES AND NOTES..............................................22
6.08. PAYMENTS FROM OWNER TRUST ESTATE..........................................................22
6.09. DOING BUSINESS IN OTHER JURISDICTIONS.....................................................22
6.10. LIABILITY OF CERTIFICATE REGISTRAR AND CERTIFICATE PAYING AGENT...........................23
ARTICLE VII
COMPENSATION OF OWNER TRUSTEE...........................................................................24
7.01. OWNER TRUSTEE'S FEES AND EXPENSES.........................................................24
7.02. INDEMNIFICATION...........................................................................24
ARTICLE VIII
TERMINATION OF TRUST AGREEMENT..........................................................................26
SECTION PAGE
8.01. TERMINATION OF TRUST AGREEMENT............................................................26
ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES..................................................28
9.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE................................................28
9.02. REPLACEMENT OF OWNER TRUSTEE..............................................................28
9.03. SUCCESSOR OWNER TRUSTEE...................................................................28
9.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE..................................................29
9.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.............................................29
ARTICLE X
MISCELLANEOUS...........................................................................................31
10.01. AMENDMENTS................................................................................31
10.02. NO LEGAL TITLE TO OWNER TRUST ESTATE......................................................32
10.03. LIMITATIONS ON RIGHTS OF OTHERS...........................................................32
10.04. NOTICES...................................................................................33
10.05. SEVERABILITY..............................................................................33
10.06. SEPARATE COUNTERPARTS.....................................................................33
10.07. SUCCESSORS AND ASSIGNS....................................................................33
10.08. NO PETITION...............................................................................33
10.09. NO RECOURSE...............................................................................34
10.10. HEADINGS..................................................................................34
10.11. GOVERNING LAW.............................................................................34
10.12. INTEGRATION...............................................................................34
Signatures ......................................................................................................40
EXHIBIT
Exhibit A-1 - Form of Certificate...............................................................................A-1
Exhibit A-2 - Form of Class B-2 Certificate.....................................................................A-1
Exhibit B - Certificate of Trust of Southern Pacific CMN Trust Series 1998-H1 ..................................B-1
Exhibit C - Form of Rule 144A Investment Representation.........................................................C-1
Exhibit D - Form of Certificate of Non-Foreign Status...........................................................D-1
Exhibit E - Form of Investment Letter...........................................................................E-1
Exhibit F - Form of Transfer Certificate........................................................................F-1
This Amended and Restated Trust Agreement, dated as of June 25, 1998
(as amended from time to time, this "Trust Agreement"), between Southern Pacific
Secured Assets Corp., a California corporation, as depositor (the "Depositor")
and Wilmington Trust Company, a Delaware banking corporation, as owner trustee
(the "Owner Trustee"),
WITNESSETH THAT:
In consideration of the mutual agreements herein contained, the
Depositor and the Owner Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. DEFINITIONS. For all purposes of this Trust Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in Appendix A to the Indenture, dated June 25, 1998,
between Southern Pacific CMN Trust Series 1998-H1, as Issuer, and Norwest Bank
Minnesota, National Association, as Indenture Trustee, which is incorporated by
reference herein. All other capitalized terms used herein shall have the
meanings specified herein.
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) All terms defined in this Trust Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Trust Agreement or in any such certificate or other document,
and accounting terms partly defined in this Trust Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this Trust
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Trust Agreement or in any such certificate or
other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Trust Agreement shall refer to this Trust Agreement as
a whole and not to any particular provision of this Trust Agreement; Article,
Section and Exhibit references contained in this Trust Agreement are references
to Articles, Sections and Exhibits in or to this Trust Agreement unless
otherwise specified; and the term "including" shall mean "including without
limitation".
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(d) The definitions contained in this Trust Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
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ARTICLE II
ORGANIZATION
Section 2.01. NAME. The trust created hereby (the "Trust") shall be
known as "Southern Pacific CMN Trust Series 1998-H1", in which name the Owner
Trustee may conduct the business of the Trust, make and execute contracts and
other instruments on behalf of the Trust and xxx and be sued.
Section 2.02. OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Certificateholders
and the Depositor.
Section 2.03. PURPOSES AND POWERS. The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Trust Agreement and to sell the Notes and
the Certificates;
(ii) to pay the organizational, start-up and transactional
expenses of the Trust;
(iii) to assign, grant, transfer, pledge and convey the Home
Loans pursuant to the Indenture and to hold, manage and distribute to
the Certificateholders pursuant to Section 5.01 any portion of the Home
Loans released from the Lien of, and remitted to the Trust pursuant to
the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) if directed by holders of Certificates representing more
than 50% of the beneficial interests in the Trust, sell the Trust
Estate subsequent to the discharge of the Indenture, all for the
benefit of the holders of the Certificates;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Trust Agreement or the
Basic Documents.
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Section 2.04. APPOINTMENT OF OWNER TRUSTEE. The Depositor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
Section 2.05. INITIAL CAPITAL CONTRIBUTION OF OWNER TRUST ESTATE. The
Depositor hereby sells, assigns, transfers, conveys and sets over to the Trust,
as of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges
receipt in trust from the Depositor, as of the date hereof, of the foregoing
contribution, which shall constitute the initial corpus of the Trust and shall
be deposited in the Certificate Distribution Account. The Owner Trustee also
acknowledges on behalf of the Trust the receipt in trust of the Home Loans and
the rights with respect to the representations and warranties made by the Seller
under the Home Loan Purchase Agreement which shall constitute the Owner Trust
Estate.
Section 2.06. DECLARATION OF TRUST. The Owner Trustee hereby declares
that it shall hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the Certificateholders,
subject to the obligations of the Trust under the Basic Documents. It is the
intention of the parties hereto that the Trust constitute a "business trust"
under the Business Trust Statute and that this Trust Agreement constitute the
governing instrument of such business trust. It is the intention of the parties
hereto that, for federal and state income and state and local franchise tax
purposes, the Trust shall not be treated as (i) an association subject
separately to taxation as a corporation, (ii) a "publicly traded partnership" as
defined in Treasury Regulation Section 1.7704-1 or (iii) a "taxable mortgage
pool" as defined in Section 7701(i) of the Code, and that the Notes shall be
debt, and the provisions of this Agreement shall be interpreted to further this
intention. It is also the intention of the parties hereto that, as of the
Closing Date, the Trust will be disregarded for federal income tax purposes.
Except as otherwise provided in this Trust Agreement, the rights of the
Certificateholders will be those of equity owners of the Trust. Effective as of
the date hereof, the Owner Trustee shall have all rights, powers and duties set
forth herein and in the Business Trust Statute with respect to accomplishing the
purposes of the Trust.
Section 2.07. LIABILITY OF THE HOLDERS OF THE CERTIFICATES. The Holders
of the Certificates shall be jointly and severally liable directly to and shall
indemnify any injured party for all losses, claims, damages, liabilities and
expenses of the Trust and the Owner Trustee (including Expenses, to the extent
not paid out of the Owner Trust Estate); provided, however, that the Holders of
the Certificates shall not be liable for payments required to be made on the
Notes or the Certificates, or for any losses incurred by a Certificateholder in
the capacity of an investor in the Certificates or a Noteholder in the capacity
of an investor in the Notes. The Holders of the Certificates shall be liable for
and shall promptly pay any entity level taxes imposed on the Trust. In addition,
any third party creditors of the Trust shall be deemed third party beneficiaries
of this paragraph. The obligations of the Holders of the Certificates under this
paragraph shall be evidenced by the Certificates.
Section 2.08. TITLE TO TRUST PROPERTY. Except with respect to the Home
Loans, which will be assigned of record to the Indenture Trustee pursuant to the
Indenture, legal title to the Owner
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Trust Estate shall be vested at all times in the Trust as a separate legal
entity except where applicable law in any jurisdiction requires title to any
part of the Owner Trust Estate to be vested in a trustee or trustees, in which
case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
Section 2.09. SITUS OF TRUST. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware. The
Trust shall not have any employees in any state other than Delaware; provided,
however, that nothing herein shall restrict or prohibit the Owner Trustee from
having employees within or without the State of Delaware or taking actions
outside the State of Delaware in order to comply with Section 2.03. Payments
will be received by the Trust only in Delaware, New York or California, and
payments will be made by the Trust only from Delaware, New York or California.
The only office of the Trust will be at the Corporate Trust Office in Delaware.
Section 2.10. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor hereby represents and warrants to the Owner Trustee that:
(i) The Depositor is duly organized and validly existing
as a corporation in good standing under the laws of the State of
California, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such
business is presently conducted.
(ii) The Depositor is duly qualified to do business as a
foreign corporation in good standing and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or
lease of its property or the conduct of its business shall require such
qualifications and in which the failure to so qualify would have a
material adverse effect on the business, properties, assets or
condition (financial or other) of the Depositor.
(iii) The Depositor has the power and authority to execute
and deliver this Trust Agreement and to carry out its terms; the
Depositor has full power and authority to convey and assign the
property to be conveyed and assigned to and deposited with the Trust as
part of the Owner Trust Estate and the Depositor has duly authorized
such conveyance and assignment and deposit to the Trust by all
necessary corporate action; and the execution, delivery and performance
of this Trust Agreement have been duly authorized by the Depositor by
all necessary corporate action.
(iv) The consummation of the transactions contemplated by
this Trust Agreement and the fulfillment of the terms hereof do not
conflict with, result in any breach of any of the terms and provisions
of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of the Depositor, or any
indenture, agreement or other instrument to which the Depositor is a
party or by which it is bound; nor result in the creation or imposition
of any Lien upon any of its properties pursuant to the terms of any
such indenture, agreement or other instrument (other than pursuant to
the
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Basic Documents); nor violate any law or, to the best of the
Depositor's knowledge, any order, rule or regulation applicable to the
Depositor of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(v) The Trust is not required to register as an investment
company under the Investment Company Act and is not under the control
of a Person required to so register.
Section 2.11. PAYMENT OF TRUST FEES. The Master Servicer shall pay the
Owner Trustee Fee pursuant to a separate side agreement with the Owner Trustee.
If the Master Servicer fails to pay the Owner Trustee such fee pursuant to such
side agreement, the Master Servicing Fee Rate shall be reduced as described in
the definition there of and the Master Servicer shall remit the Owner Trustee
Fee to the Indenture Trustee pursuant to Section 3.07 of the Servicing Agreement
and the Indenture Trustee shall pay the Owner Trustee Fee pursuant to Section
8.02(b) of the Indenture. The Master Servicer shall pay the Trust's expenses
(including expenses of the Owner Trustee and the Indenture Trustee) incurred
with respect to the performance of the Trust's duties under the Indenture
pursuant to a separate side agreement, or, if such amounts are insufficient, the
Owner Trustee shall be paid pursuant to Section 5.01 hereof.
Section 2.12. INVESTMENT COMPANY. Neither the Depositor nor any holder
of a Certificate shall take any action which would cause the Trust to become an
"investment company" which would be required to register under the Investment
Company Act.
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ARTICLE III
CONVEYANCE OF THE HOME LOANS;
CERTIFICATES
Section 3.01. CONVEYANCE OF THE HOME LOANS. The Depositor, concurrently
with the execution and delivery hereof, does hereby transfer, convey, sell and
assign to the Trust, on behalf of the Holders of the Notes and the Certificates,
without recourse, all its right, title and interest in and to the Home Loans,
including the right to enforce the repurchase and indemnification obligations of
the Seller under the Home Loan Purchase Agreement, in exchange for consideration
consisting of the Notes and the Trust Certificates issued by the Trust.
The parties hereto intend that the transaction set forth herein be a
sale by the Depositor to the Trust of all of its right, title and interest in
and to the Home Loans. In the event that the trans action set forth herein is
not deemed to be a sale, the Depositor hereby grants to the Trust a security
interest in all of its right, title and interest in, to and under the Owner
Trust Estate, all distributions thereon and all proceeds thereof; and this Trust
Agreement shall constitute a security agreement under applicable law.
Section 3.02. INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Depositor pursuant to Section 2.05 and until the conveyance
of the Home Loans pursuant to Section 3.01 and the issuance of the Certificates,
and thereafter except as otherwise permitted hereunder, the Depositor shall be
the sole Certificateholder.
Section 3.03. THE CERTIFICATES. Each Class of Certificates shall be
issued in the form of one or more Certificates each representing not less than a
10% Certificate Percentage Interest of such Class. Each Class of Certificates
shall initially be registered in the name of Southern Pacific Funding
Corporation. Each Class of Certificates shall be executed on behalf of the Trust
by manual or facsimile signature of an authorized officer of the Owner Trustee
and authenticated in the manner provided in Section 3.04. Certificates bearing
the manual or facsimile signatures of individuals who were, at the time when
such signatures shall have been affixed, authorized to sign on behalf of the
Trust, shall be validly issued and entitled to the benefit of this Trust
Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of authentication and
delivery of such Certificates. A Person shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such Person's acceptance of a Certificate duly
registered in such Person's name, pursuant to Section 3.05.
A transferee of a Certificate shall become a Certificateholder and
shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to and upon satisfaction of
the conditions set forth in Section 3.05.
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Section 3.04. AUTHENTICATION OF CERTIFICATES. The Owner Trustee shall
cause all Certificates issued hereunder to be executed and authenticated on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Depositor, signed by its chairman of the board, its president or any vice
president, without further corporate action by the Depositor, in authorized
denominations. No Certificate shall entitle its holder to any benefit under this
Trust Agreement or be valid for any purpose unless there shall appear on such
Certificate a certificate of authen tication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee or the Certificate Registrar by
manual signature; such authentication shall constitute conclusive evidence that
such Certificate shall have been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
Section 3.05. REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE
OF Certificates. The Certificate Registrar shall keep or cause to be kept, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Norwest Bank Minnesota, National Association shall be the initial Certificate
Registrar. If the Certificate Registrar resigns or is removed, the Owner Trustee
shall appoint a successor Certificate Registrar.
Subject to satisfaction of the conditions set forth below with respect
to the Certificate, upon surrender for registration of transfer of any
Certificate at the office or agency maintained pursuant to Section 3.09, the
Owner Trustee or the Certificate Registrar shall execute, authenticate and
deliver in the name of the designated transferee or transferees, one or more new
Certificates in authorized denominations of a like aggregate amount dated the
date of authentication by the Owner Trustee or the Certificate Registrar. At the
option of a Holder, Certificates may be exchanged for other Certificates of
authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.09.
Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer or exchange shall be cancelled and subsequently
disposed of by the Certificate Registrar in accordance with its customary
practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
No Person shall become a Certificateholder until it shall establish its
non-foreign status by submitting to the Certificate Paying Agent an IRS Form W-9
and the Certificate of Non-Foreign
Status set forth in Exhibit D hereto.
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No transfer of a Certificate shall be made unless such transfer is
exempt from the registration requirements of the Securities Act and any
applicable state securities laws or is made in accordance with said Act and
laws. In the event of any such transfer, the Certificate Registrar shall prior
to such transfer require the transferee to execute (i) (a) an investment letter
(in substantially the form attached hereto as Exhibit C) in form and substance
reasonably satisfactory to the Certificate Registrar certifying to the Trust and
the Certificate Registrar that such transferee is a "qualified institutional
buyer" under Rule 144A under the Securities Act, or (b) an investment letter (in
substantially the form attached hereto as Exhibit E), acceptable to and in form
and substance reasonably satisfactory to the Certificate Registrar, which
investment letters shall not be an expense of the Trust, the Owner Trustee, the
Certificate Registrar, the Master Servicer or the Depositor, or (c) a
Certificate (in substantially the form attached hereto as Exhibit F) in form and
substance reasonably satisfactory to the Certificate Registrar certifying that
such transferee is a Person involved in the organization or operation of the
Trust or an affiliate of such a Person within the meaning of Rule 3a-7 of the
Investment Company Act of 1940 (including but not limited to the Depositor) and
(ii) the Certificate of Non-Foreign Status (in substantially the form attached
hereto as Exhibit D) acceptable to and in form and substance reasonably
satisfactory to the Certificate Registrar, which certificate shall not be an
expense of the Trust, the Owner Trustee, the Certificate Registrar or the
Depositor. The Holder of a Certificate desiring to effect such transfer shall,
and does hereby agree to, indemnify the Trust, the Owner Trustee, the
Certificate Registrar, the Master Servicer and the Depositor against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No transfer of a Certificate shall be made unless the Certificate
Registrar shall have received either (i) a representation letter from the
proposed transferee of such Certificate to the effect that such proposed
transferee is not an employee benefit plan subject to the fiduciary
responsibility provisions of ERISA, or Section 4975 of the Code, or a Person
acting on behalf of any such plan or using the assets of any such plan, which
representation letter shall not be an expense of the Trust, Owner Trustee, the
Certificate Registrar, the Master Servicer or the Depositor or (ii) in the case
of any such certificate presented for registration in the name of an employee
benefit plan subject to the fiduciary responsibility provisions of ERISA, or
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan, or any other Person who is using the
assets of any such plan to effect such acquisition, an Opinion of Counsel, in
form and substance reasonably satisfactory to, and addressed and delivered to,
the Trust and the Certificate Registrar, to the effect that the purchase or
holding of such Certificate will not result in the assets of the Owner Trust
Estate being deemed to be "plan assets" and subject to the fiduciary
responsibility provisions of ERISA or the prohibited transaction provisions of
the Code, will not constitute or result in a prohibited transaction within the
meaning of Section 406 or Section 407 of ERISA or Section 4975 of the Code, and
will not subject the Trust, the Owner Trustee, the Certificate Registrar or the
Depositor to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code) in addition to those explicitly
undertaken in this Trust Agreement which Opinion of Counsel shall not be an
expense of the Trust, the Owner Trustee, the Certificate Registrar or Depositor.
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No offer, sale, transfer, pledge, hypothecation or other disposition
(including any pledge, sale or transfer under a repurchase transaction or
securities loan) of any Certificate shall be made to any transferee unless,
prior to such disposition, the proposed transferor delivers to the Certificate
Registrar and the Owner Trustee an Opinion of Counsel, rendered by a law firm
generally recognized to be qualified to opine concerning the tax aspects of
asset securitization, to the effect that such transfer (including any
disposition permitted following any default under any pledge or repurchase
transaction) will not cause the Trust to be (i) treated as an association
taxable as a corporation for federal income tax purposes, (ii) taxable as a
taxable mortgage pool as defined in Section 7701(i) of the Code or (iii) taxable
as a "publicly traded partnership" as defined in Treasury Regulation section
1.7704-1. Notwithstanding the foregoing, the provisions of this paragraph shall
not apply to the initial transfer of the Certificates to the Depositor.
No offer, sale, transfer or other disposition (including pledge) of any
Certificate shall be made to any affiliate of the Depositor or the Issuer, other
than the initial transfer of the Certificates
to the Depositor.
Section 3.06. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar and the Owner Trustee such security or indemnity as
may be required by them to save each of them harmless, then in the absence of
notice to the Certificate Registrar or the Owner Trustee that such Certificate
has been acquired by a bona fide purchaser, the Owner Trustee shall execute on
behalf of the Trust and the Owner Trustee or the Certificate Registrar, shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like tenor and
denomination. In connection with the issuance of any new Certificate under this
Section 3.06, the Owner Trustee or the Certificate Registrar may require the
payment of a sum sufficient to cover any expenses of the Owner Trustee or the
Certificate Registrar (including fees and expenses of counsel) and any tax or
other governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section 3.06 shall constitute
conclusive evidence of ownership in the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.
Section 3.07. PERSONS DEEMED CERTIFICATEHOLDERS. Prior to due
presentation of a Certificate for registration of transfer, the Owner Trustee,
the Certificate Registrar or any Certificate Paying Agent may treat the Person
in whose name any Certificate is registered in the Certificate Register as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 5.02 and for all other purposes whatsoever, and none of the Trust, the
Owner Trustee, the Certificate Registrar or any Paying Agent shall be bound by
any notice to the contrary.
Section 3.08. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND
ADDRESSES. The Certificate Registrar shall furnish or cause to be furnished to
the Depositor or the Owner Trustee, within 15 days after receipt by the
Certificate Registrar of a written request therefor from the Depositor
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or the Owner Trustee, a list, in such form as the Depositor or the Owner
Trustee, as the case may be, may reasonably require, of the names and addresses
of the Certificateholders as of the most recent Record Date. Each Holder, by
receiving and holding a Certificate, shall be deemed to have agreed not to hold
any of the Trust, the Depositor, the Certificate Registrar or the Owner Trustee
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
Section 3.09. MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee on
behalf of the Trust, shall maintain in Wilmington, Delaware, an office or
offices or agency or agencies where Certificates may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Owner Trustee in respect of the Certificates and the Basic Documents may be
served. The Owner Trustee initially designates the Corporate Trust Office as its
office for such purposes. The Owner Trustee shall give prompt written notice to
the Depositor and the Certif icateholders of any change in the location of the
Certificate Register or any such office or agency.
Section 3.10. CERTIFICATE PAYING AGENT. (a) The Certificate Paying
Agent shall make distributions to Certificateholders from the Certificate
Distribution Account on behalf of the Trust in accordance with the provisions of
the Certificates and Section 5.01 hereof from payments remitted to the
Certificate Paying Agent by the Indenture Trustee pursuant to Section 3.05 of
the Indenture. The Trust hereby appoints Norwest Bank Minnesota, National
Association as Certificate Paying Agent and Norwest Bank Minnesota, National
Association hereby accepts such appointment and further agrees that it will be
bound by the provisions of this Trust Agreement relating to the Certificate
Paying Agent and shall:
(i) hold all sums held by it for the payment of amounts
due with respect to the Certificates in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(ii) give the Owner Trustee notice of any default by the
Trust of which it has actual knowledge in the making of any payment
required to be made with respect to the
Certificates;
(iii) at any time during the continuance of any such
default, upon the written request of the Owner Trustee forthwith pay to
the Owner Trustee on behalf of the Trust all sums so held in Trust by
such Certificate Paying Agent;
(iv) not resign from its position as Certificate Paying
Agent except that it shall immediately resign as Certificate Paying
Agent and forthwith pay to the Owner Trustee on behalf of the Trust all
sums held by it in trust for the payment of Certificates if at any time
it ceases to meet the standards under this Section 3.10 required to be
met by the Certificate Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with
respect to the withholding from any payments made by it on any
Certificates of any applicable withholding taxes
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imposed thereon and with respect to any applicable reporting
requirements in connection therewith; and
(vi) not institute Bankruptcy proceedings against the
Issuer in connection with this Trust Agreement.
(b) The Trust may revoke such power and remove the Certificate Paying
Agent if it determines in its sole discretion that the Certificate Paying Agent
shall have failed to perform its obligations under this Trust Agreement in any
material respect. Norwest Bank Minnesota, National Association shall be
permitted to resign as Certificate Paying Agent upon 30 days written notice to
the Owner Trustee; provided Norwest Bank Minnesota, National Association is also
resigning as Paying Agent under the Indenture at such time. In the event that
Norwest Bank Minnesota, National Association shall no longer be the Certificate
Paying Agent under this Trust Agreement and Paying Agent under the Indenture,
the Owner Trustee shall appoint a successor to act as Certificate Paying Agent
(which shall be a bank or trust company) and which shall also be the successor
Paying Agent under the Indenture. The Owner Trustee shall cause such successor
Certificate Paying Agent or any additional Certificate Paying Agent appointed by
the Owner Trustee to execute and deliver to the Owner Trustee an instrument to
the effect set forth in this Section 3.10 as it relates to the Certificate
Paying Agent. The Certificate Paying Agent shall return all unclaimed funds to
the Trust and upon removal of a Certificate Paying Agent such Certificate Paying
Agent shall also return all funds in its possession to the Trust. The provisions
of Sections 6.01, 6.03, 6.04 and 7.01 shall apply to the Certificate Paying
Agent to the extent applicable. Any reference in this Agreement to the
Certificate Paying Agent shall include any co-paying agent unless the context
requires otherwise.
(c) The Certificate Paying Agent shall establish and maintain with
itself a trust account (the "Certificate Distribution Account") in which the
Certificate Paying Agent shall deposit, on the same day as it is received from
the Indenture Trustee, each remittance received by the Certificate Paying Agent
with respect to payments made pursuant to the Indenture. The Certificate Paying
Agent shall make all distributions to Certificates, from moneys on deposit in
the Certificate Distribution Account, in accordance with Section 3.05 of the
Indenture and Section 5.01 hereof.
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ARTICLE IV
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 4.01. GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to be
a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party and any
amendment or other agreement or instrument described herein, as evidenced
conclusively by the Owner Trustee's execution thereof. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, except
as otherwise provided in this Trust Agreement, to take all actions required of
the Trust pursuant to the Basic Documents.
Section 4.02. GENERAL DUTIES. It shall be the duty of the Owner Trustee
to discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Trust Agreement and the Basic Documents to which the Trust is
a party and to administer the Trust in the interest of the Certificateholders,
subject to the Basic Documents and in accordance with the provisions of this
Trust Agreement.
Section 4.03. ACTION UPON INSTRUCTION. (a) Subject to Article IV and in
accordance with the terms of the Basic Documents, the Certificateholders may by
written instruction direct the Owner Trustee in the management of the Trust.
Such direction may be exercised at any time by written instruction of the
Certificateholders pursuant to Article IV.
(b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any Basic Document if the Owner
Trustee shall have reasonably determined, or shall have been advised by counsel,
that such action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any Basic Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is required to decide between
alternative courses of action permitted or required by the terms of this Trust
Agreement or under any Basic
Document,
or in the event that the Owner Trustee is unsure as to the application of any
provision of this Trust Agreement or any Basic Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Trust Agreement permits
any determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee shall promptly give notice (in such
form as shall be appropriate under the circumstances) to the Certificateholders
requesting instruction as to the course of action to be adopted, and to the
extent the Owner Trustee acts in good faith in accordance with any written
instruction of the Certificateholders, the Owner Trustee shall not be liable on
account of such action to any Person. If the Owner Trustee shall not have
received appropriate instruction within 10 days of such notice (or within such
shorter period of time as reasonably may be specified in such notice or may be
necessary under the circumstances) it may, but shall be under no duty to, take
or refrain from taking such action not inconsistent with this Trust Agreement or
the Basic
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Documents, as it shall deem to be in the best interests of the
Certificateholders, and the Owner Trustee shall have no liability to any Person
for such action or inaction.
Section 4.04. NO DUTIES EXCEPT AS SPECIFIED UNDER SPECIFIED DOCUMENTS
OR IN INSTRUCTIONS. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Trust Agreement, (ii) in accordance with the Basic
Documents and (iii) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 4.03; and no implied duties or obligations
shall be read into this Trust Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Securities and Exchange Commission filing
for the Trust or to record this Trust Agreement or any Basic Document. The Owner
Trustee nevertheless agrees that it will, at its own cost and expense, promptly
take all action as may be necessary to discharge any liens on any part of the
Owner Trust Estate that result from actions by, or claims against, the Owner
Trustee that are not related to the ownership or the administration of the Owner
Trust Estate.
Section 4.05. RESTRICTIONS. (a) The Owner Trustee or the Depositor (or
an Affiliate thereof) shall not take any action (x) that is inconsistent with
the purposes of the Trust set forth in Section 2.03 or (y) that, to the actual
knowledge of the Owner Trustee based on an Opinion of Counsel rendered by a law
firm generally recognized to be qualified to opine concerning the tax aspects of
asset securitization, would result in the Trust becoming taxable as a
corporation for federal income tax purposes. The Certificateholders shall not
direct the Owner Trustee to take action that would violate the provisions of
this Section 4.05.
(b) The Owner Trustee shall not convey or transfer any of the Trust's
properties or assets, including those included in the Trust Estate, to any
person unless (a) it shall have received an Opinion of Counsel rendered by a law
firm generally recognized to be qualified to opine concerning the tax aspects of
asset securitization to the effect that such transaction will not have any
material adverse tax consequence to the Trust or any Certificateholder and (b)
such conveyance or transfer shall not violate the provisions of Section 3.16(b)
of the Indenture.
Section 4.06. PRIOR NOTICE TO CERTIFICATEHOLDERS WITH RESPECT TO
CERTAIN MATTERS. With respect to the following matters, the Owner Trustee shall
not take action unless at least 30 days before the taking of such action, the
Owner Trustee shall have notified the Certificateholders in writing of the
proposed action and the Certificateholders shall not have notified the Owner
Trustee
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in writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of cash distributions due
and owing under the Home Loans) and the compromise of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of cash distributions due and
owing under the Home Loans);
(b) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business Trust
Statute);
(c) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
and
(e) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Trust Agreement
of a successor Certificate Registrar or Certificate Paying Agent or the consent
to the assignment by the Note Registrar, Paying Agent, Indenture Trustee,
Certificate Registrar or Certificate Paying Agent of its obligations under the
Indenture or this Trust Agreement, as applicable.
Section 4.07. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO CERTAIN
MATTERS. The Owner Trustee shall not have the power, except upon the direction
of the Certificateholders, to (a) remove the Master Servicer under the Servicing
Agreement pursuant to Sections 7.01 and 8.05 thereof or (b) except as expressly
provided in the Basic Documents, sell the Home Loans after the termination of
the Indenture. The Owner Trustee shall take the actions referred to in the
preceding sentence only upon written instructions signed by the
Certificateholders.
Section 4.08. ACTION BY CERTIFICATEHOLDERS WITH RESPECT TO BANKRUPTCY.
The Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Certificateholders and the consent of the Noteholders and the Owner Trustee and
the delivery to the Owner Trustee by each such Certificateholder of a
certificate certifying that such Certificateholder reasonably believes that the
Trust is insolvent. This paragraph shall survive for one year following
termination of this Trust Agreement.
Section 4.09. RESTRICTIONS ON CERTIFICATEHOLDERS' POWER. The
Certificateholders shall not direct the Owner Trustee to take or to refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Trust Agreement
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or any of the Basic Documents or would be contrary to Section 2.03, nor shall
the Owner Trustee be obligated to follow any such direction, if given.
Section 4.10. MAJORITY CONTROL. Except as expressly provided herein,
any action that may be taken by the Certificateholders under this Trust
Agreement may be taken by the Holders of Certificates evidencing not less than a
majority of the Voting Rights of the Certificates. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to this
Trust Agreement shall be effective if signed by Holders of Certificates
evidencing not less than a majority of the Voting Rights of the Certificates at
the time of the delivery of such notice.
Section 4.11. OPTIONAL REDEMPTION. Upon receipt of written instructions
provided to the Owner Trustee by the Holder or Holders of 100% of each Class of
Certificates, the Owner Trustee shall cause the Issuer to redeem the Notes in
accordance with Section 8.07 of the Indenture and shall provide all necessary
notices on behalf of the Issuer to effect the foregoing, provided that such
Holder or Holders shall deposit with the Indenture Trustee an amount equal to
the aggregate redemption price specified under Section 8.07 of the Indenture,
which shall be applied by the Indenture Trustee solely to make such redemption
payments. The Owner Trustee shall not have the power to exercise the right of
the Issuer to redeem the Notes pursuant to Section 8.07 of the Indenture, except
as provided above.
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ARTICLE V
APPLICATION OF TRUST FUNDS
Section 5.01. DISTRIBUTIONS. (a) On each Payment Date, the Certificate
Paying Agent shall distribute to the Class B-2 Certificateholders, on a pro rata
basis based on the Certificate Percentage Interests thereof, amount on deposit
in the Certificate Distribution Account and available therefor pursuant to
Section 3.05(b)(viii), (c)(v), (d)(v), (e)(ix) and (e)(x) of the Indenture. On
each Payment Date, the Certificate Paying Agent shall distribute to the Class X
Certificateholders, on a pro rata basis based on the Certificate Percentage
Interests thereof, all funds remaining on deposit in the Certificate
Distribution Account following distributions to the Class B-2 Certificateholders
for such Payment Date as reduced by any amount owing to the Owner Trustee
hereunder and any Expenses of the Trust remaining unpaid.
(b) In the event that any withholding tax is imposed on the
distributions (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in accordance
with Section 3.05 of the Indenture and this Section 5.01. The Certificate Paying
Agent is hereby authorized and directed to retain or cause to be retained from
amounts otherwise distributable to the Certificateholders sufficient funds for
the payment of any tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Certificate Paying Agent and
remitted to the appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution (such as a
distribution to a non-U.S. Certificateholder), the Certificate Paying Agent may
in its sole discretion withhold such amounts in accordance with this paragraph
(b).
(c) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Noteholders.
Section 5.02. METHOD OF PAYMENT. Subject to Section 8.01(c),
distributions required to be made to Certificateholders on any Payment Date as
provided in Section 5.01 shall be made to each Certificateholder of record on
the preceding Record Date either by, in the case of any Certificateholder owning
a Class of Certificates having a Certificate Percentage Interest of 100%, wire
transfer, in immediately available funds, to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder shall have provided to the Certificate Registrar appropriate
written instructions at least five Business Days prior to such Payment Date or,
if not, by check mailed to such Certificateholder at the address of such Holder
appearing in the Certificate Register.
Section 5.03. TAX RETURNS. The Indenture Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis using
the accrual method of accounting, (b) deliver (or cause to be delivered) to each
Certificateholder as may be required by
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the Code and applicable Treasury Regulations, such information as may be
required to enable each Certificateholder to prepare its federal and state
income tax returns, (c) prepare and file or cause to be prepared and filed such
tax returns relating to the Trust as may be required by the Code and applicable
Treasury Regulations (making such elections as may from time to time be required
or appropriate under any applicable state or federal statutes, rules or
regulations) and (d) collect or cause to be collected any withholding tax as
described in and in accordance with Section 5.01 of this Trust Agreement with
respect to income or distributions to Certificateholders and prepare or cause to
be prepared the appropriate forms relating thereto. The Owner Trustee shall sign
all tax and information returns prepared or caused to be prepared by the
Indenture Trustee pursuant to this Section 5.03 at the request of the Indenture
Trustee, and in doing so shall rely entirely upon, and shall have no liability
for information or calculations provided by, the Indenture Trustee.
Section 5.04. STATEMENTS TO CERTIFICATEHOLDERS. On each Payment Date,
the Certificate Paying Agent shall send to each Certificateholder the statement
or statements provided to the Owner Trustee and the Certificate Paying Agent by
the Indenture Trustee pursuant to Section 7.05 of the Indenture with respect to
such Payment Date.
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ARTICLE VI
CONCERNING THE OWNER TRUSTEE
Section 6.01. ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee
accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts but only upon the terms of this Trust Agreement. The
Owner Trustee and the Certificate Paying Agent also agree to disburse all moneys
actually received by it constituting part of the Owner Trust Estate upon the
terms of the Basic Documents and this Trust Agreement. The Owner Trustee shall
not be answerable or accountable hereunder or under any Basic Document under any
circumstances, except (i) for its own willful misconduct, gross negligence or
bad faith or grossly negligent failure to act or (ii) in the case of the
inaccuracy of any representation or warranty contained in Section 6.03 expressly
made by the Owner Trustee. In particular, but not by way of limitation (and
subject to the exceptions set forth in the preceding sentence):
(a) The Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Certificateholders permitted under this
Trust Agreement;
(b) No provision of this Trust Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights, duties or powers
hereunder or under any Basic Document if the Owner Trustee shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured or provided to it;
(c) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(d) The Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Trust Agreement or for the due execution hereof
by the Depositor or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate, or for or in respect of the validity
or sufficiency of the Basic Documents, the Notes, the Certificates, other than
the certificate of authentication on the Certificates, if executed by the Owner
Trustee and the Owner Trustee shall in no event assume or incur any liability,
duty, or obligation to any Noteholder or to any Certificateholder, other than as
expressly provided for herein or expressly agreed to in the Basic Documents;
(e) The execution, delivery, authentication and performance by it of
this Trust Agreement will not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action with respect to, any governmental authority or agency;
-20-
(f) The Owner Trustee shall not be liable for the default or misconduct
of the Depositor, Indenture Trustee, Certificate Registrar or the Master
Servicer under any of the Basic Documents or otherwise and the Owner Trustee
shall have no obligation or liability to perform the obligations of the Trust
under this Trust Agreement or the Basic Documents that are required to be
performed by the Indenture Trustee under the Indenture or the Seller under the
Home Loan Purchase Agreement; and
(g) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it or duties imposed by this Trust Agreement, or
to institute, conduct or defend any litigation under this Trust Agreement or
otherwise or in relation to this Trust Agreement or any Basic Document, at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner Trustee
to perform any discretionary act enumerated in this Trust Agreement or in any
Basic Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its gross negligence or willful misconduct in the
performance of any such act.
Section 6.02. FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish
to the Securityholders promptly upon receipt of a written reasonable request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Trust under the Basic Documents.
Section 6.03. REPRESENTATIONS AND WARRANTIES. The Owner Trustee hereby
represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Trust Agreement;
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Trust Agreement, and this Trust Agreement
will be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Trust Agreement on its behalf;
(c) Neither the execution nor the delivery by it of this Trust
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound;
(d) This Trust Agreement, assuming due authorization, execution and
delivery by the Owner Trustee and the Depositor, constitutes a valid, legal and
binding obligation of the Owner
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Trustee, enforceable against it in accordance with the terms hereof subject to
applicable bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights generally and to general
principles of equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(e) The Owner Trustee is not in default with respect to any order or
decree of any court or any order, regulation or demand of any Federal, state,
municipal or governmental agency, which default might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of the Owner Trustee or its properties or might have consequences
that would materially adversely affect its performance hereunder; and
(f) No litigation is pending or, to the best of the Owner Trustee's
knowledge, threatened against the Owner Trustee which would prohibit its
entering into this Trust Agreement or performing its obligations under this
Trust Agreement.
Section 6.04. RELIANCE; ADVICE OF COUNSEL. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, note, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the Trust hereunder and in the
performance of its duties and obligations under this Trust Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents,
attorneys , custodians or nominees (including persons acting under a power of
attorney) if such persons have been selected by the Owner Trustee with
reasonable care, and (ii) may consult with counsel, accountants and other
skilled persons to be selected with reasonable care and employed by it. The
Owner Trustee shall not be liable for anything done, suffered or omitted in good
faith by it in accordance with the written opinion or advice of any such
counsel, accountants or other such Persons and not contrary to this Trust
Agreement or any Basic Document.
Section 6.05. NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Article VI, in accepting the trusts hereby created Wilmington Trust Company
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner
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Trustee by reason of the transactions contemplated by this Trust Agreement or
any Basic Document shall look only to the Owner Trust Estate for payment or
satisfaction thereof.
Section 6.06. OWNER TRUSTEE NOT LIABLE FOR CERTIFICATES OR RELATED
DOCUMENTS. The recitals contained herein and in the Certificates (other than the
signatures of the Owner Trustee on the Certificates) shall be taken as the
statements of the Depositor, and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Trust Agreement, of any Basic Document or of the
Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the Notes, or of any Related Documents. The Owner Trustee shall
at no time have any responsibility or liability with respect to the sufficiency
of the Owner Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Trust Agreement or the Noteholders
under the Indenture, including compliance by the Depositor or the Seller with
any warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
Section 6.07. OWNER TRUSTEE MAY OWN CERTIFICATES AND NOTES. The Owner
Trustee in its individual or any other capacity may, subject to Section 3.05,
become the owner or pledgee of Certificates or Notes and may deal with the
Depositor, the Seller, the Certificate Paying Agent, the Certificate Registrar
and the Indenture Trustee in transactions with the same rights as it would have
if it were not Owner Trustee.
Section 6.08. PAYMENTS FROM OWNER TRUST ESTATE. All payments to be made
by the Owner Trustee under this Trust Agreement or any of the Basic Documents to
which the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate or from other amounts required to be provided
by the Certificateholders and only to the extent that the Owner Trust shall have
received income or proceeds from the Owner Trust Estate or the
Certificateholders to make such payments in accordance with the terms hereof.
Wilmington Trust Company, in its individual capacity, shall not be liable for
any amounts payable under this Trust Agreement or any of the Basic Documents to
which the Owner Trustee is a party.
Section 6.09. DOING BUSINESS IN OTHER JURISDICTIONS. Notwithstanding
anything contained herein to the contrary, neither Wilmington Trust Company nor
the Owner Trustee shall be required to take any action in any jurisdiction other
than in the State of Delaware if the taking of such action will, even after the
appointment of a co-trustee or separate trustee in accordance with Section 9.05
hereof, (i) require the consent or approval or authorization or order of or the
giving of notice to, or the registration with or the taking of any other action
in respect of, any state or other governmental authority or agency of any
jurisdiction other than the State of Delaware; (ii) result in any fee, tax or
other governmental charge under the laws of the State of Delaware becoming
payable by Wilmington Trust Company; or (iii) subject Wilmington Trust Company
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Wilmington Trust Company or the Owner Trustee, as the case may
be, contemplated hereby.
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Section 6.10. LIABILITY OF CERTIFICATE REGISTRAR AND CERTIFICATE PAYING
AGENT. All provisions affording protection to or limiting the liability of the
Owner Trustee shall inure as well to the Certificate Registrar and Certificate
Paying Agent.
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ARTICLE VII
COMPENSATION OF OWNER TRUSTEE
Section 7.01. OWNER TRUSTEE'S FEES AND EXPENSES. The Owner Trustee
shall receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof, and the Owner Trustee shall be
reimbursed by the Depositor or the Master Servicer for its reasonable expenses
hereunder and under the Basic Documents, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may reasonably employ in connection with the exercise and
performance of its rights and its duties hereunder and under the Basic
Documents. The amount of the Owner Trustee Fee shall be paid by the Master
Servicer pursuant to Section 3.07(a)(x) of the Servicing Agreement and Section
2.11 hereof, and all amounts owing to the Owner Trustee hereunder in excess of
such amount shall be paid pursuant to a separate side agreement or as provided
in Section 5.01 hereof.
Section 7.02. INDEMNIFICATION. The Depositor shall indemnify, defend
and hold harmless the Owner Trustee and the Certificate Paying Agent, solely in
its capacity as Certificate Paying Agent, and their respective successors,
assigns, agents and servants (collectively, the "Indemnified Parties") from and
against, any and all liabilities, obligations, losses, damages, taxes, claims,
actions and suits, and any and all reasonable costs, expenses and disbursements
(including reason able legal fees and expenses) of any kind and nature
whatsoever (collectively, "Expenses") which may at any time be imposed on,
incurred by, or asserted against any Indemnified Party in any way relating to or
arising out of this Trust Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee and the Certificate Paying Agent, solely in its capacity as
Certificate Paying Agent, hereunder, provided, that:
(i) the Depositor shall not be liable for or required
to indemnify an Indemnified Party from and against Expenses arising or
resulting from the Owner Trustee's or the Certificate Paying Agent's
willful misconduct, gross negligence or bad faith or as a result of any
inaccuracy of a representation or warranty of the Owner Trustee
contained in Section 6.03 expressly made by the Owner Trustee;
(ii) with respect to any such claim, the Indemnified
Party shall have given the Depositor written notice thereof promptly
after the Indemnified Party shall have actual knowledge thereof;
(iii) while maintaining control over its own defense,
the Depositor shall consult with the Indemnified Party in preparing
such defense; and
(iv) notwithstanding anything in this Agreement to the
contrary, the Depositor shall not be liable for settlement of any claim
by an Indemnified Party entered into without the prior consent of the
Depositor which consent shall not be unreasonably withheld.
-25-
The indemnities contained in this Section shall survive the resignation
or termination of the Owner Trustee or the Certificate Paying Agent or the
termination of this Trust Agreement. In the event of any claim, action or
proceeding for which indemnity will be sought pursuant to this Section 7.02, the
Owner Trustee's or the Certificate Paying Agent's choice of legal counsel, if
other than the legal counsel retained by the Owner Trustee or the Certificate
Paying Agent in connection with the execution and delivery of this Trust
Agreement, shall be subject to the approval of the Depositor, which approval
shall not be unreasonably withheld. In addition, upon written notice to the
Owner Trustee or the Certificate Paying Agent and with the consent of the Owner
Trustee or the Certificate Paying Agent which consent shall not be unreasonably
withheld, the Depositor has the right to assume the defense of any claim, action
or proceeding against the Owner Trustee or the Certificate Paying Agent.
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ARTICLE VIII
TERMINATION OF TRUST AGREEMENT
Section 8.01. TERMINATION OF TRUST AGREEMENT. (a) This Trust Agreement
(other than Article VII) and the Trust shall terminate and be of no further
force or effect upon the earliest of (i) the final distribution of all moneys or
other property or proceeds of the Owner Trust Estate in accordance with the
terms of the Indenture and this Trust Agreement, (ii) the Payment Date in June
2028, or (iii) the distribution of all of the assets of the Owner Trust Estate,
in accordance with written instructions provided to the Owner Trustee by Holders
of 100% Certificate Percentage Interest of each Class of Certificates, following
the optional redemption of the Notes by the Issuer pursuant to Section 8.07 of
the Indenture; provided in each case that all amounts owing to the Noteholders
to the extent payable from the Owner Trust Estate or proceeds thereof have been
paid in full and that all obligations under the Indenture have been discharged.
The bankruptcy, liquidation, dissolution, death or incapacity of any
Certificateholder shall not (x) operate to terminate this Trust Agreement or the
Trust or (y) entitle such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or proceeding in any court for a
partition or winding up of all or any part of the Trust or the Owner Trust
Estate or (z) otherwise affect the rights, obligations and liabilities of the
parties hereto.
(b) Except as provided in Section 8.01(a), neither the Depositor nor
any Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which Certificateholders shall surrender their Certificates to the
Certificate Paying Agent for payment of the final distribution and cancellation,
shall be given by the Certificate Paying Agent by letter to Certificateholders
mailed within five Business Days of receipt of notice of the final payment on
the Notes from the Indenture Trustee, stating (i) the Payment Date upon or with
respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Certificate
Paying Agent therein designated, (ii) the amount of any such final payment and
(iii) that the Record Date otherwise applicable to such Payment Date is not
applicable, payments being made only upon presentation and surrender of the
Certificates at the office of the Certificate Payment Agent therein specified.
The Certificate Paying Agent shall give such notice to the Owner Trustee and the
Certificate Registrar at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Certificates, the Certificate Paying
Agent shall cause to be distributed to Certificateholders amounts distributable
on such Payment Date pursuant to Section 5.01.
In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Certificate Paying Agent shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. Subject to applicable laws with respect to escheat of funds, if within
one year following the Payment Date on which final payment of the Certificates
was to have been made pursuant to
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Section 3.03 of the Indenture, all the Certificates shall not have been
surrendered for cancellation, the Certificate Paying Agent may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certif icates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Trust Agreement. Any funds remaining in the Certificate
Distribution Account after exhaustion of such remedies shall be distributed by
the Certificate Paying Agent to the Holder of the Certificate.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be cancelled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810(c) of the Business Trust Statute.
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ARTICLE IX
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
Section 9.01. ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized to exercise corporate trust
powers; having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authorities; and
having (or having a parent that has) a rating of at least Baa3 or is otherwise
acceptable to Xxxxx'x. If such corporation shall publish reports of condition at
least annually pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Owner Trustee shall cease to be eligible
in accordance with the provisions of this Section 9.01, the Owner Trustee shall
resign immediately in the manner and with the effect specified in Section 9.02.
Section 9.02. REPLACEMENT OF OWNER TRUSTEE. The Owner Trustee may at
any time resign and be discharged from the trusts hereby created by giving 30
days prior written notice thereof to the Depositor. Upon receiving such notice
of resignation, the Depositor shall promptly appoint a successor Owner Trustee,
by written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and to the successor Owner Trustee. If
no successor Owner Trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Owner Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 9.01 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until accep tance of appointment by the successor Owner
Trustee pursuant to Section 9.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Master Servicer shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies.
Section 9.03. SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to the
Indenture Trustee and to its predecessor Owner Trustee an instrument accepting
such appointment under this Trust Agreement, and thereupon the resignation or
removal of the predecessor Owner Trustee shall become effective, and such
successor Owner Trustee, without any further act, deed or conveyance,
-29-
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor under this Trust Agreement, with like effect as if originally
named as Owner Trustee. The predecessor Owner Trustee shall upon payment of its
fees and expenses deliver to the successor Owner Trustee all documents and
statements and monies held by it under this Trust Agreement; and the predecessor
Owner Trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties and
obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section 9.03 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to
Section 9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 9.03, the Owner Trustee shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders and the Rating
Agencies.
Section 9.04. MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any Person into
which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding;
provided, that such Person shall be eligible pursuant to Section 9.01 and,
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
Section 9.05. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of this Trust Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate may at the time be located, the Owner Trustee
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or trustees, of all or any part of the Owner Trust Estate, and
to vest in such Person, in such capacity, such title to the Trust or any part
thereof and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Owner Trustee may consider
necessary or desirable. No co-trustee or separate trustee under this Trust
Agreement shall be required to meet the terms of eligibility as a successor
Owner Trustee pursuant to Section 9.01 and no notice of the appointment of any
co-trustee or separate trustee shall be required pursuant to Section 9.03.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee
-30-
is not authorized to act separately without the Owner Trustee joining in such
act), except to the extent that under any law of any jurisdiction in which any
particular act or acts are to be performed, the Owner Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
Owner Trust Estate or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Owner Trustee;
(b) No trustee under this Trust Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Trust Agreement;
and
(c) The Owner Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Trust
Agreement and the conditions of this Article. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Owner Trustee or separately, as may be provided therein,
subject to all the provisions of this Trust Agreement, specifically including
every provision of this Trust Agreement relating to the conduct of, affecting
the liability of, or affording protection to, the Owner Trustee. Each such
instrument shall be filed with the Owner Trustee.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Trust Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
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ARTICLE X
MISCELLANEOUS
Section 10.01. AMENDMENTS. (a) This Trust Agreement may be amended from
time to time by the parties hereto as specified in this Section, provided that
any amendment, except as provided in subparagraph (e) below, be accompanied by
an Opinion of Counsel addressed to the Owner Trustee and obtained by the Master
Servicer to the effect that such amendment (i) complies with the provisions of
this Section and (ii) would not cause the Trust to be subject to an entity level
tax for federal income tax purposes.
(b) If the purpose of the amendment (as detailed therein) is to correct
any mistake, eliminate any inconsistency, cure any ambiguity or deal with any
matter not covered (i.e. to give effect to the intent of the parties and, if
applicable, to the expectations of the Holders), it shall not be necessary to
obtain the consent of any Holders, but the Owner Trustee shall be furnished with
(A) a letter from the Rating Agencies that the amendment will not result in the
downgrading or withdrawal of the rating then assigned to any Note or the rating
then assigned to any Note or (B) an Opinion of Counsel obtained by the Master
Servicer to the effect that such action will not adversely affect in any
material respect the interests of any Holders of the Notes.
(c) If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Security is outstanding, it shall
not be necessary to obtain the consent of any Holder, but the Owner Trustee
shall be furnished with an Opinion of Counsel obtained by the Master Servicer
that such amendment is necessary or helpful to prevent the imposition of such
taxes and is not materially adverse to any Holder.
(d) If the purpose of the amendment is to add or eliminate or change
any provision of the Trust Agreement other than as contemplated in (b) and (c)
above, the amendment shall require (A) an Opinion of Counsel obtained by the
Master Servicer to the effect that such action will not adversely affect in any
material respect the interests of any Holders and (B) either (a) a letter from
the Rating Agency that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to any Note or the rating then assigned
to any Note or (b) the consent of Holders of Certificates evidencing a majority
of the Voting Rights of the Certificates and the Indenture Trustee; provided,
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments received that are required to be distributed on
any Certificate without the consent of the related Certificateholder, or (ii)
reduce the aforesaid percentage of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.
(e) If the purpose of the amendment is to provide for the holding of
any of the Certificates in book-entry form, it shall require the consent of
Holders of all such Certificates then outstanding; provided, that the Opinion of
Counsel specified in subparagraph (a) above shall not
be required.
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(f) If the purpose of the amendment is to provide for the issuance of
additional certificates representing an interest in the Trust, it shall not be
necessary to obtain the consent of any Holder, but the Owner Trustee shall be
furnished with (A) an Opinion of Counsel obtained by the Master Servicer to the
effect that such action will not adversely affect in any material respect the
interests of any Holders and (B) a letter from the Rating Agencies that the
amendment will not result in the downgrading or withdrawal of the rating then
assigned to any Notes or the rating then assigned to the Notes.
(g) Promptly after the execution of any such amendment or consent, the
Master Servicer shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies. It shall not be necessary for the consent of
Certificateholders or the Indenture Trustee pursuant to this Section 10.01 to
approve the particular form of any proposed amendment or consent, but it shall
be sufficient if such consent shall approve the substance thereof. The manner of
obtaining such consents (and any other consents of Certificateholders provided
for in this Trust Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as the Owner Trustee may prescribe.
(h) In connection with the execution of any amendment to any agreement
to which the Trust is a party, other than this Trust Agreement, the Owner
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel to the effect that such amendment is authorized or permitted by the
documents subject to such amendment and that all conditions precedent in the
Basic Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.
Promptly after the execution of any amendment to the Certificate of
Trust, the Owner Trustee shall cause the filing of such amendment with the
Secretary of State of the State of Delaware.
Section 10.02. NO LEGAL TITLE TO OWNER TRUST ESTATE. The
Certificateholders shall not have legal title to any part of the Owner Trust
Estate solely by virtue of their status as a Certificateholder. The
Certificateholders shall be entitled to receive distributions with respect to
their undivided beneficial interest therein only in accordance with Articles V
and VIII. No transfer, by operation of law or otherwise, of any right, title or
interest of the Certificateholders to and in their ownership interest in the
Owner Trust Estate shall operate to terminate this Trust Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the Owner Trust Estate
Section 10.03. LIMITATIONS ON RIGHTS OF OTHERS. Except for Section
2.07, the provisions of this Trust Agreement are solely for the benefit of the
Owner Trustee, the Depositor, the Certificateholders, and, to the extent
expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Trust Agreement (other than Section 2.07), whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or
-33-
claim in the Owner Trust Estate or under or in respect of this Trust Agreement
or any covenants, conditions or provisions contained herein.
Section 10.04. NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt, to the Owner Trustee at: Wilmington Trust Company,
Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000;
Attention: Corporate Trust Administration; to the Depositor at: Southern Pacific
Secured Assets Corp., 0000 Xxxxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxx, XX 00000;
Attention: Xxxxx X. Xxxxx; to the Indenture Trustee and the Certificate Paying
Agent at: 00000 Xxxxxx Xxxx Xxxxxxx, Xxxxxxxx, XX 00000; Attention: Southern
Pacific CMN Trust Series 1998-H1; to S&P at: 00 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000; to Fitch at Xxx Xxxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000; or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Trust Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder receives such notice.
(c) A copy of any notice delivered to the Owner Trustee or the Trust
shall also be delivered to the Depositor.
Section 10.05. SEVERABILITY. Any provision of this Trust Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 10.06. SEPARATE COUNTERPARTS. This Trust Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section 10.07. SUCCESSORS AND ASSIGNS. All representations, warranties,
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, each of the Depositor, the Owner Trustee and its successors and
each Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or
action by a Certificateholder shall bind the successors and assigns of such
Certificateholder.
Section 10.08. NO PETITION. The Owner Trustee, by entering into this
Trust Agreement and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against the
Depositor or the Trust, or join in any institution against the Depositor or the
Trust of, any bankruptcy proceedings under any United States federal
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or state bankruptcy or similar law in connection with any obligations to the
Certificates, the Notes, this Trust Agreement or any of the Basic Documents.
This Section shall survive for one year following the termination of this Trust
Agreement.
Section 10.09. NO RECOURSE. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Depositor, the Seller, the Owner Trustee, the Indenture
Trustee or any Affiliate thereof and no recourse may be had against such parties
or their assets, except as may be expressly set forth or contemplated in this
Trust Agreement, the Certificates or the Basic Documents.
Section 10.10. HEADINGS. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
Section 10.11. GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 10.12. INTEGRATION. This Trust Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understanding pertaining thereto.
IN WITNESS WHEREOF, the Depositor and the Owner Trustee have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
SOUTHERN PACIFIC SECURED ASSETS CORP.
By:____________________________
Name: Xxxxx X. Xxxxx
Title: Director
WILMINGTON TRUST COMPANY, as Owner Trustee,
By:____________________________
Name:
Title:
Acknowledged and Agreed:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION,
as Certificate Registrar
and Certificate Paying Agent
By:________________________
Name:
Title:
EXHIBIT A-1
[Form of Certificate]
[Face]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.05 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFI CATE REGISTRAR
SHALL HAVE RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF
THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR A PERSON ACTING
ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OR (II) IF THIS
CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, OR SECTION 4975 OF THE CODE (OR
COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH
PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT
SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE OWNER TRUST
ESTATE BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
THE CODE, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF THE CODE, AND
WILL NOT SUBJECT THE OWNER TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION OR
LIABILITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFI CATE REGISTRAR
SHALL HAVE RECEIVED A CERTIFICATE OF NON-FOREIGN STATUS CERTIFYING AS TO THE
TRANSFEREE'S STATUS AS A U.S. PERSON OR CORPORATION UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER,
THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE
TRUSTEE, OR THE OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS
EXPRESSLY PROVIDED IN THE TRUST AGREEMENT OR THE BASIC DOCUMENTS.
A-2
Certificate No.
Certificate Percentage Interest of this Certificate: _______%
Cut-off Date: June 1, 1998
First Payment Date
July 25, 1998
CUSIP No.: __________
SOUTHERN PACIFIC CMN TRUST SERIES 1998-H1
Evidencing a fractional undivided equity interest in the Owner Trust
Estate, the property of which consists primarily of the Home Loans in Southern
Pacific CMN Trust Series 1998-H1 (the "Trust"), a Delaware business trust formed
by
SOUTHERN PACIFIC SECURED ASSETS CORP., AS DEPOSITOR, pursuant to the
Trust Agreement referred to below.
This certifies that [name of Holder] is the registered owner of the
Percentage Interest represented hereby.
The Trust was created pursuant to a Trust Agreement dated as of June
25, 1998 (as amended and supplemented from time to time, the "Trust Agreement")
between the Depositor and Wilmington Trust Company, as owner trustee (as amended
and supplemented from time to time, the "Owner Trustee", which term includes any
successor entity under the Trust Agreement), a summary of certain of the
pertinent provisions of which is set forth hereinafter. This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which such Holder is bound.
This Certificate is one of a duly authorized issue of Certificates,
Series 1998-H1 (herein called the "Certificates") issued under the Trust
Agreement to which reference is hereby made for a statement of the respective
rights thereunder of the Depositor, the Owner Trustee and the Holders of the
Certificates and the terms upon which the Certificates are executed and
delivered. All terms used in this Certificate which are defined in the Trust
Agreement shall have the meanings assigned to them in the Trust Agreement. The
Owner Trust Estate consists of the Home Loans in the Southern Pacific CMN Trust
Series 1998-H1 . The rights of the Holders of the Certificates are subordinated
to the rights of the Holders of the Notes, as set forth in the Indenture.
There will be distributed on the 25th day of each month or, if such
25th day is not a Business Day, the next Business Day (each, a "Payment Date"),
commencing in July 1998, to the
A-3
Person in whose name this Certificate is registered at the close of business on
the last Business Day of the month preceding the month of such Payment Date (the
"Record Date"), such Certif icateholder's Percentage Interest in the amount to
be distributed to Certificateholders on such Payment Date.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Certificate Distribution
Account that have been released from the Lien of the Indenture for payment
hereunder and that neither the Owner Trustee in its individual capacity nor the
Depositor is personally liable to the Certificateholders for any amount payable
under this Certificate or the Trust Agreement or, except as expressly provided
in the Trust Agreement, subject to any liability under the Trust Agreement.
The Holder of this Certificate acknowledges and agrees that its rights
to receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Indenture, dated as of June 25,
1998, between the Trust and Norwest Bank Minnesota, National Association, as
Indenture Trustee (the "Indenture").
The Depositor and each Certificateholder, by acceptance of a
Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for federal, state and local income tax purposes
as an equity interest in the Trust.
Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Depositor, or join in any institution against the Depositor or the Trust of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law in connection with any obligations relating to the
Certificates, the Notes, the Trust Agreement or any of the Basic Documents.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Certificate Paying Agent by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Certificate Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained by the Certificate Registrar for that purpose by the Trust in the
Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, or an authenticating
agent by manual signature, this Certificate shall not entitle the Holder hereof
to any benefit under the Trust Agreement or be valid for any purpose.
A-4
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-5
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
Dated: By:_______________________________
Authorized Signatory
A-6
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an interest in,
the Depositor, the Seller, the Master Servicer, the Indenture Trustee, the Owner
Trustee or any Affiliates of any of them and no recourse may be had against such
parties or their assets, except as expressly set forth or contemplated herein or
in the Trust Agreement or the Basic Documents. In addition, this Certificate is
not guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the Home
Loans, all as more specifically set forth herein and in the Trust Agreement. A
copy of the Trust Agreement may be examined by any Certificateholder upon
written request during normal business hours at the principal office of the
Depositor and at such other places, if any, designated by the Depositor.
The Trust Agreement permits the amendment thereof as specified below,
provided that any amendment be accompanied by an Opinion of Counsel to the Owner
Trustee to the effect that such amendment complies with the provisions of the
Trust Agreement and, if Southern Pacific Secured Assets Corp. was not the Holder
of 100% of the Certificates, would not cause the Trust to be subject to an
entity level tax. If the purpose of the amendment is to correct any mistake,
eliminate any inconsistency, cure any ambiguity or deal with any matter not
covered, it shall not be necessary to obtain the consent of any Holder, but the
Owner Trustee shall be furnished with a letter from the Rating Agencies that the
amendment will not result in the downgrading or with drawal of the rating then
assigned to any Note or the rating then assigned to any Note. If the pur pose of
the amendment is to prevent the imposition of any federal or state taxes at any
time that any Security is outstanding, it shall not be necessary to obtain the
consent of the any Holder, but the Owner Trustee shall be furnished with an
Opinion of Counsel that such amendment is necessary or helpful to prevent the
imposition of such taxes and is not materially adverse to any Holder. If the
purpose of the amendment is to add or eliminate or change any provision of the
Trust Agreement, other than as specified in the preceding two sentences, the
amendment shall require either (a) a letter from the Rating Agencies that the
amendment will not result in the downgrading or withdrawal of the rating then
assigned to any Note or the rating then assigned to any Note or (b) the consent
of Holders of the Certificates evidencing a majority of the Percentage Interests
of the Certificates and the Indenture Trustee; PROVIDED, HOWEVER, that no such
amendment shall (i) reduce in any manner the amount of, or delay the time of,
payments received that are required to be distributed on any Certificate without
the consent of the related Certificateholder, or (ii) reduce the aforesaid
percentage of Certificates the Holders of which are required to consent to any
such amendment without the consent of the Holders of all such Certificates then
out standing.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trust in the Borough of Manhattan, The City of New York, accompanied by a
written instrument of transfer in form satisfactory to the Certificate Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust
A-7
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is Norwest Bank Minnesota, National
Association.
Except as provided in the Trust Agreement, the Certificates are
issuable only in a minimum Certificate Percentage Interest of 10%. As provided
in the Trust Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Paying Agent, the Certificate
Registrar and any agent of the Owner Trustee, the Certificate Paying Agent, or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Owner Trustee,
the Certificate Paying Agent, the Certificate Registrar or any such agent shall
be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate as and when provided in accordance
with the terms of the Trust
Agreement.
A-8
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
--------------------------------------------------------------------------------
to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
-----------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately available
funds to _______________________________________________________________________
for the account of ________________________________________, account number
______________, or, if mailed by check, to ______________.
Applicable statements should be mailed to__________________.
------------------------------
Signature of assignee or agent
(for authorization of wire
transfer only)
X-00
XXXXXXX X-0
[Form of Class B-2 Certificate]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.05 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFI CATE REGISTRAR
SHALL HAVE RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF
THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS 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"), OR A PERSON ACTING
ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OR (II) IF THIS
CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, OR SECTION 4975 OF THE CODE (OR
COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH
PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT
SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE OWNER TRUST
ESTATE BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
THE CODE, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF THE CODE, AND
WILL NOT SUBJECT THE OWNER TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION OR
LIABILITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFI CATE REGISTRAR
SHALL HAVE RECEIVED A CERTIFICATE OF NON-FOREIGN STATUS CERTIFYING AS TO THE
TRANSFEREE'S STATUS AS A U.S. PERSON OR CORPORATION UNDER U.S. LAW.
THIS CERTIFICATE IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN
RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE
INDENTURE REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR
PAYMENTS ON THIS
A-11
CERTIFICATE. THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
THE SELLER, THE DEPOSITOR, THE MASTER SERVICER, THE INDENTURE TRUSTEE, OR THE
OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS EXPRESSLY
PROVIDED IN THE TRUST AGREEMENT OR THE BASIC DOCUMENTS.
PRINCIPAL OF THIS CERTIFICATE IS PAYABLE OVER TIME AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS CERTIFICATE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
A-12
SOUTHERN PACIFIC CMN TRUST SERIES 1998-H1
CLASS B-2
AGGREGATE CERTIFICATE PRINCIPAL RATE: ___________
BALANCE: $
INITIAL CERTIFICATE PRINCIPAL
BALANCE OF THIS CERTIFICATE: $
PERCENTAGE INTEREST:_____________ CUSIP NO. _____________
CERTIFICATE NUMBER:
This certifies that ________________ or registered assigns is the
registered owner of the Class B-2 Certificate to be paid from the Southern
Pacific CMN Trust Series 1998-H1 (the "Issuer"), a Delaware business trust, for
value received, in the principal sum of ______________________________________
($___________) together with interest on the Certificate Principal Balance of
this Class B-2 Certificate ( this "Certificate") outstanding from time to time
as provided below. Payments shall be made in monthly installments on the
twenty-fifth day of each month or, if such day is not a Business Day, the next
succeeding Business Day (each a "Payment Date"), commencing in July 1998 and
ending on or before the Payment Date occurring in [July 1, 2023] (the "Stated
Maturity").
The Issuer was created pursuant to a Trust Agreement dated as of June
25, 1998 (as amended and supplemented from time to time, the "Trust Agreement")
between the Depositor and Wilmington Trust Company, as owner trustee (as amended
and supplemented from time to time, the "Owner Trustee", which term includes any
successor entity under the Trust Agreement), a summary of certain of the
pertinent provisions of which is set forth hereinafter. This Certificate is
issued under and is subject to the terms, provisions and conditions of the Trust
Agreement, to which Trust Agreement the Holder of this Certificate by virtue of
the acceptance hereof assents and by which such Holder is bound.
This Certificate is one of a duly authorized issue of Certificates,
Series 1998-H1 (herein called the "Certificates") issued under the Trust
Agreement to which reference is hereby made for a statement of the respective
rights thereunder of the Depositor, the Owner Trustee and the Holders of the
Certificates and the terms upon which the Certificates are executed and
delivered.
A-13
This Certificate shall be paid together with the Issuer's
Collateralized Asset-Backed Securities, Series 1998-H1, (the "Securities"),
issued under an Indenture dated as of June 25, 1998 (the "Indenture"), between
the Issuer and Norwest Bank Minnesota, National Association, as indenture
trustee (the "Indenture Trustee", which term includes any successor Indenture
Trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights
thereunder of the Issuer, the Indenture Trustee, and the Holders of the Notes
and the terms upon which payments are to be made on this Certificate. The rights
of the Holders of this Certificate are subordinated to the rights of the Holders
of the Notes, as set forth in the Indenture. All terms used in this Certificate
which are defined in the Indenture shall have the meanings assigned to them in
the Indenture.
Payments of principal and interest on this Certificate will be made on
each Payment Date to the Certificateholder of record as of the related Record
Date. On each Payment Date, the Certificateholders will be entitled to receive
interest payments in an aggregate amount equal to the Interest Remittance Amount
for such Payment Date, together with principal payments in an aggregate amount
equal to the Principal Distribution Amount plus the Net Monthly Excess Cash
Flow, if any, for such Payment Date. [In addition, on each Payment Date, the
Class B-2 Certificateholder and the Noteholders in the aggregate will be
entitled to receive additional interest payments equal to the Unpaid Interest
Shortfall for such Payment Date, to the extent of available funds.] The
"Certificate Principal Balance" of a Certificate as of any date of determination
is equal to the initial Certificate Principal Balance thereof, reduced by the
aggregate of all amounts previously paid with respect to such Certificate on
account of principal and the aggregate amount of cumulative Realized Losses
allocated to such Certificate on all prior Payment Dates.
The principal of, and interest on, this Certificate are due and payable
as described in the Indenture, 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 Certificate
shall be equal to this Certificate's pro rata share of the aggregate payments on
the Series 1998-H1 Securities as described above, and shall be applied as
between interest and principal as provided in the Indenture.
All principal and interest accrued on the Securities, if not previously
paid, will become finally due and payable at the Final Scheduled Payment Date.
The Securities are subject to redemption in whole, but not in part, by
the Issuer on any Payment Date on or after the Payment Date on which the
aggregate Principal Balance of the Home Loans is less than or equal to 10% of
the aggregate Principal Balance of the Home Loans as of the Cut-off Date.
The Issuer shall not be liable upon the indebtedness evidenced by the
Securities except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Securities. The assets included in
the Trust Estate will be the sole source of payments on the Securities, and each
Holder hereof, by its acceptance of this Certificate, agrees that (i) such
Certificate will be limited in right of payment to amounts available from the
Trust Estate as provided in the Indenture and (ii) such Holder shall have no
recourse to the Issuer, the Owner
A-14
Trustee, the Indenture Trustee, Southern Pacific Secured Assets Corp., the
Master Servicer or any of their respective affiliates, or to the assets of any
of the foregoing entities, except the assets of the Issuer pledged to secure the
Securities pursuant to the Indenture and the rights conveyed to the Issuer under
the Indenture.
Any payment of principal or interest payable on this Certificate which
is punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Certificate (or one or more Predecessor Certificates) is
registered at the close of business on the Record Date for such Payment Date by
check mailed to such person's address as it appears in the Certificate Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Certificate, which shall be payable as provided
below. Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Certificate (holding an aggregate Initial
Certificate Principal Balance of at least $5,000,000) delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a
Certificate (or one or more Predecessor Certificates) effected by payments of
principal made on any Payment Date shall be binding upon all Holders of this
Certificate and of any certificate issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof, whether or not such payment
is noted on such Certificate. The final payment of this Certificate shall be
payable upon presentation and surrender thereof on or after the Payment Date
thereof at the Corporate Trust Office or the office or agency of the Issuer
maintained by it for such purpose pursuant to Section 3.02 of the Indenture.
Subject to the foregoing provisions, each Certificate delivered under
the Trust Agreement, upon registration of transfer of or in exchange for or in
lieu of any other Certificate shall carry the right to unpaid principal and
interest that were carried by such other Certificate.
If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Securities, the Securities may become or be
declared due and payable in the manner and with the effect provided in the
Indenture. If any such acceleration of maturity occurs prior to the payment of
the entire unpaid Note Principal Balance of the Notes and Certificate Principal
Balance of the Class B-2 Certificates, the amount payable to the Holder of this
Certificate will be equal to the sum of the unpaid Certificate Principal Balance
of this Certificate, together with accrued and unpaid interest thereon as
described in the Indenture. The Indenture provides that, notwithstanding the
acceleration of the maturity of the Securities, under certain circumstances
specified therein, all amounts collected as proceeds of the Trust Estate
securing the Securities or otherwise shall continue to be applied to payments of
principal of and interest on the Securities as if they had not been declared due
and payable.
The failure to pay any Net Monthly Excess Cash Flow at any time when
funds are not available to make such payment as provided in the Indenture shall
not constitute an Event of Default under the Indenture.
The transfer of this Certificate shall be subject to the terms of the
Trust Agreement.
A-15
Prior to the due presentment for registration of transfer of this
Certificate, the Issuer, the Indenture Trustee and any agent of the Issuer or
the Indenture Trustee may treat the Person in whose name this Certificate is
registered as the owner of such Certificate (i) on the applicable Record Date
for the purpose of making payments and interest of such Certificate, and (ii) on
any other date for all other purposes whatsoever, as the owner hereof, whether
or not this Certificate be overdue, and neither the Issuer, the Indenture
Trustee nor any such agent of the Issuer or the Indenture Trustee 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 rights of the Holders of the Securities under the Indenture at
any time by the Issuer with the consent of the Holders of a majority of all
Securities at the time outstanding. The Indenture also contains provisions
permitting the Holders of Securities representing specified percentages of the
aggregate Note Principal Balance of the Notes and Certificate Principal Balance
of the Class B-2 Certificates on behalf of the Holders of all the Securities, to
waive any past Default under the Indenture and its consequences. Any such waiver
by the Holder, at the time of the giving thereof, of this Certificate (or any
one or more Predecessor Certificates) shall bind the Holder of every Certificate
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 such
Certificate. 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 the Holders of the Securities issued thereunder.
The Certificates are exchangeable for a like aggregate initial
Certificate Principal Balance of Certificates of different authorized
denominations, as requested by the Holder surrendering same.
Unless the Certificate of Authentication hereon has been executed by
the Indenture Trustee by manual signature, this Certificate shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
AS PROVIDED IN THE TRUST AGREEMENT, THIS CERTIFICATE AND THE TRUST
AGREEMENT CREATING THIS SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY,
THE LAWS OF THE STATE OF DELAWARE APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED THEREIN.
A-16
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Certificate to be duly executed.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
Dated: By:______________________________
Authorized Signatory
A-17
ABBREVIATIONS
The following abbreviations, when used in the inscription on the face
of the Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common
TEN ENT -- as tenants by the entireties
JT TEN -- as joint tenants with right of
survivorship and not as tenants in
common
UNIF GIFT MIN ACT -- ________Custodian___________________
(Cust) (Minor)
under Uniform Gifts to
Minor Act___________________________
(State)
Additional abbreviations may also be used though not in
the above list.
_____________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
ASSIGNEE:
_____________________________________________________
_____________________________________________________
_____________________________________________________
(Please print or typewrite name and address, including zip code, of assignee)
________________________________________________________________________________
the within note and all rights thereunder, hereby irrevocably constitution and
appointing ________________ attorney to transfer said Note on the books of the
Issuer, with full power of substitution in the premises.
Dated:_________________________________ ___________________________________
Signature Guaranteed by__________________________________________________
NOTICE: The signature(s) to this assignment must correspond with the
name as it appears upon the face of the within Note in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm
A-18
of the New York Stock Exchange or another national securities exchange.
Notarized or witnessed signatures are not acceptable.
A-19
EXHIBIT B
CERTIFICATE OF TRUST OF
Southern Pacific CMN Trust Series 1998-H1
-----------------------------------------
THIS Certificate of Trust of Southern Pacific CMN Trust Series
1998-H1 (the "Trust"), dated June 8, 1998, is being duly executed and filed by
Wilmington Trust Company, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 DEL. CODE, ss. 3801 ET
SEQ.).
1. NAME. The name of the business trust formed hereby is
Southern Pacific CMN Trust Series 1998-H1 .
2. DELAWARE TRUSTEE. The name and business address of the
trustee of the Trust in the State of Delaware is Wilmington Trust Company,
Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxxx Xxxxxxxx 00000-0000.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust, has executed this Certificate of Trust as of the date first above
written.
Wilmington Trust Company, not in
its individual capacity but solely
as owner trustee under a Trust
Agreement dated as of June 8, 1998
By:
______________________________
Name:
Title:
B-1
EXHIBIT C
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
-----------------------------------------
-----------------------------------------
-----------------------------------------
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with,
the Owner Trustee and the Depositor (as defined in the Trust Agreement (the
"Agreement"), dated as of June 25, 1998, between Southern Pacific Secured Assets
Corp., as Depositor and Wilmington trust Company, as Owner Trustee pursuant to
Section 3.05 of the Agreement and Norwest Bank Minnesota, National Association
as indenture trustee, as follows:
a. The Buyer understands that the Rule 144A
Securities have not been registered under the 1933 Act or the
securities laws of any state.
b. The Buyer considers itself a substantial,
sophisticated institutional investor having such knowledge and
experience in financial and business matters that it is capable of
evaluating the merits and risks of investment in the Rule 144A
Securities.
C-1
c. The Buyer has been furnished with all information
regarding the Rule 144A Securities that it has requested from the
Seller, the Indenture Trustee, the Owner Trustee or the Master
Servicer.
d. Neither the Buyer nor anyone acting on its behalf
has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any
other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security
from, or otherwise approached or negotiated with respect to the Rule
144A Securities, any interest in the Rule 144A Securities or any other
similar security with, any person in any manner, or made any general
solicitation by means of general advertising or in any other manner, or
taken any other action, that would constitute a distribution of the
Rule 144A Securities under the 1933 Act or that would render the
disposition of the Rule 144A Securities a violation of Section 5 of the
1933 Act or require registration pursuant thereto, nor will it act, nor
has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as
that term is defined in Rule 144A under the 1933 Act and has completed
either of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified
institutional buyers, understands that such Rule 144A Securities may be
resold, pledged or transferred only (i) to a person reasonably believed
to be a qualified institutional buyer that purchases for its own
account or for the account of a qualified institutional buyer to whom
notice is given that the resale, pledge or transfer is being made in
reliance on Rule 144A, or (ii) pursuant to another exemption from
registration under the 1933 Act.
[3. The Buyer warrants and represents to, and covenants with,
the Seller, the Indenture Trustee, Owner Trustee, Master Servicer and the
Depositor that either (1) the Buyer is (A) not an employee benefit plan (within
the meaning of Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")), or a plan (within the meaning of Section 4975(e)(1)
of the Internal Revenue Code of 1986 ("Code")), which (in either case) is
subject to ERISA or Section 4975 of the Code (both a "Plan"), and (B) is not
directly or indirectly purchasing the Rule 144A Securities on behalf of, as
investment manager of, as named fiduciary of, as trustee of, or with "plan
assets" of a Plan, or (2) the Buyer understands that registration of transfer of
any Rule 144A Securities to any Plan, or to any Person acting on behalf of any
Plan, will not be made unless such Plan delivers an opinion of its counsel,
addressed and satisfactory to the Certificate Registrar and the Depositor, to
the effect that the purchase and holding of the Rule 144A Securities by, on
behalf of or with "plan assets" of any Plan would not constitute or result in a
prohibited transaction under Section 406 of ERISA or Section 4975 of the Code,
and would not subject the Depositor, the Master Servicer, the Indenture Trustee
or the Trust to any obligation or liability (including liabilities under ERISA
or Section 4975 of the Code) in addition to those undertaken in the Agreement or
any other liability.]
C-2
4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each of which,
when so executed, shall be deemed to be an original; such counterparts,
together, shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
_____________________________ ______________________________
Print Name of Seller Print Name of Buyer
By:__________________________ By:___________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.__________________________ No.___________________________
Date:________________________ Date:_________________________
C-3
ANNEX 1 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the
Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $______________________1 in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ CORPORATION, ETC. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ BANK. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, A COPY OF WHICH IS ATTACHED HERETO.
--------
1 Buyer must own and/or invest on a discretionary basis at least $100,000,000 in
securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
C-4
___ SAVINGS AND LOAN. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements.
___ BROKER-DEALER. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
___ INSURANCE COMPANY. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State or territory or the District
of Columbia.
___ STATE OR LOCAL PLAN. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA PLAN. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ INVESTMENT ADVISER. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958.
___ BUSINESS DEVELOPMENT COMPANY. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ TRUST FUND. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or
H.R. 10 plans.
3. The term "SECURITIES" as used herein DOES NOT INCLUDE (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
C-5
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party that at
the time is a "qualified institutional buyer" within the meaning of Rule 144A.
In addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
________________________________________
Print Name of Buyer
By: ___________________________________
Name:
Title:
Date:___________________________________
C-6
ANNEX 2 TO EXHIBIT C
--------------------
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under
the Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $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.
____ The Buyer owned $___________________ in securities (other than
the excluded securities referred to below) as of the end of
the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $______________ in securities (other
than the excluded securities referred to below) as of the end
of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "FAMILY OF INVESTMENT COMPANIES" as used herein
means two or more registered investment companies (or series thereof) that have
the same investment adviser or investment advisers that are affiliated (by
virtue of being majority owned subsidiaries of the same parent or because one
investment adviser is a majority owned subsidiary of the other).
4. The term "SECURITIES" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
C-7
5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made are relying and will
continue to rely on the statements made herein because one or more sales to the
Buyer will be in reliance on Rule 144A. In addition, the Buyer will only
purchase for the Buyer's own account.
6. The undersigned will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.
_________________________________
Print Name of Buyer
By:_______________________________
Name:__________________________
Title:_________________________
IF AN ADVISER:
__________________________________
Print Name of Buyer
Date:_____________________________
C-8
EXHIBIT D
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is delivered
pursuant to Section 3.05 of the Amended and Restated Trust Agreement, dated as
of June 25, 1998 (the "Trust Agreement"), between Southern Pacific Secured
Assets Corp., as depositor and Wilmington Trust Company, as Owner Trustee, in
connection with the acquisition of, transfer to or possession by the
undersigned, whether as beneficial owner (the "Beneficial Owner"), or nominee on
behalf of the Beneficial Owner of the Certificates, Series 1998-H1 (the
"Certificate"). Capitalized terms used but not defined in this certificate have
the respective meanings given them in the Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a nominee), and in
all cases sign and otherwise complete Part III. In addition, each holder shall
submit with the Certificate an IRS Form W-9 relating to such holder.
To confirm to the Trust that the provisions of Sections 871, 881 or 1446 of the
Internal Revenue Code (relating to withholding tax on foreign partners) do not
apply in respect of the Certificate held by the undersigned, the undersigned
hereby certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is ) not a
non-resident alien for purposes of U.S.
income taxation;
2. My (The Beneficial Owner's) name and home
address are:
______________________________
______________________________
______________________________; and
3. My (The Beneficial Owner's) U.S. taxpayer
identification number (Social Security
Number) is .
B. Corporate, Partnership or Other Entity as Beneficial
Owner
1. (Name of the Beneficial Owner) is not a
foreign corporation, foreign partnership,
foreign trust or foreign estate (as those
terms are defined in the Code and Treasury
Regulations;
2. The Beneficial Owner's office address and
place of incorporation (if applicable) is
D-1
______________________________________; and
3. The Beneficial Owner's U.S. employer
identification number is _______________.
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this certificate has been made in reliance upon
information contained in:
______ an IRS Form W-9
______ a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least thirty (30) days prior to the date that the
form relied upon becomes obsolete, and (ii) in connection with change in
Beneficial Owners, the undersigned agrees to submit a new Certificate of
Non-Foreign Status to the Trust promptly after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees
to notify the Trust within sixty (60) days of the date that the Beneficial Owner
becomes a foreign person. The undersigned understands that this certificate may
be disclosed to the Internal Revenue Service by the Trust and any false
statement contained herein could be punishable by fines, imprisonment or both.
D-2
Under penalties of perjury, I declare that I have examined this
certificate and to the best of my knowledge and belief it is true, correct and
complete and will further declare that I will inform the Trust of any change in
the information provided above, and, if applicable, I further declare that I
have the authority* to sign this document.
______________________
Name
______________________
Title (if applicable)
______________________
Signature and Date
*Note: If signed pursuant to a power of attorney, the power of attorney must
accompany this certificate.
D-3
EXHIBIT E
FORM OF INVESTMENT LETTER [NON-RULE 144A]
[DATE]
[Certificate Registrar]
Re: Southern Pacific CMN Trust Series 1998-H1
Trust Certificates,
Series 1998-H1 , (the "Certificates")
-------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the above-captioned Certificates,
we certify that (a) we understand that the Certificates 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 Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (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
Certificates 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 Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates 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 Certificates 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 certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate 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 Trust Agreement.
E-1
Very truly yours,
[TRANSFEREE]
By:_____________________________
Authorized Officer
E-2
EXHIBIT F
TRANSFER CERTIFICATE
--------------------
Wilmington Trust Company, as Owner Trustee
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Norwest Bank Minnesota, National Association
00000 Xxxxxx Xxxx Xxxxxxx
Xxxxxxxx, XX 00000
Re: PROPOSED TRANSFER OF TRUST CERTIFICATES
Gentlemen:
This certification is being made by ______________ (the "Proposed Transferee")
in connection with the proposed Transfer to the Proposed Transferee of a trust
certificate (the "Trust Certificate") representing ___% fractional undivided
interest in Southern Pacific CMN Trust Series 1998-H1 (the "Trust") created
pursuant to a Trust Agreement, dated as of June 25, 1998 (such agreement, as
amended, being referred to herein as the "Trust Agreement") between Southern
Pacific Secured Assets Corp. and Wilmington Trust Company, as Owner Trustee.
Initially capitalized terms used but not defined herein have the meanings
assigned to them in the Trust Agreement. The Proposed Transferee hereby
certifies as follows:
1. The undersigned is a Person involved in the organization or
operation of the Trust or an affiliate of such a Person within the meaning of
Rule 3a-7 of the Investment Company Act.
2. The Proposed Transferee understands that (a) the Trust Certificates
have not been and will not be registered or qualified under the Securities Act,
or the securities laws of any state, (b) neither the Trust nor the Owner Trustee
is required, and neither intends, to so register or qualify the Trust
Certificates, and (c) the Trust Certificates cannot be resold unless (i) they
are registered and qualified under the Securities Act and the applicable state
securities laws or (ii) an exemption from registration and qualification is
available.
3. The Proposed Transferee is acquiring the Trust Certificate for its
own account for investment only and not with a view to or for sale or other
transfer in connection with any distribution of the Trust Certificate in any
manner that would violate the Securities Act or any applicable state securities
laws.
4. The Proposed Transferee (a) is an accredited investor having such
knowledge and experience in financial and business matters, and in particular in
such matters related to securities
F-1
similar to the Trust Certificate, such that it is capable of evaluating the
merits and risks of investment in the Trust Certificate and (b) is able to bear
the economic risks of such an investment.
5. The Proposed Transferee will not authorize nor has it authorized any
person (a) to offer, pledge, sell, dispose of or otherwise transfer any Trust
Certificate, any interest in any Trust Certificate or any other similar security
to any person in any manner, (b) to solicit any offer to buy or to accept a
pledge, disposition or other transfer of any Trust Certificate, any interest in
any Trust Certificate or any other similar security from any person in any
manner, (c) otherwise to approach or negotiate with respect to any Trust
Certificate, any interest in any Trust Certificate or any other similar security
with any person in any manner, (d) to make any general solicitation by means of
general advertising or in any other manner, or (e) to take any other action that
would constitute a distribution of any Trust Certificate under the Securities
Act, that would render the disposition of any Trust Certificate a violation of
Section 5 of the Securities Act or any state securities law, or that could
require registration or qualification pursuant thereto. Neither the Proposed
Transferee nor anyone acting on its behalf has offered any Trust Certificate for
sale or made any general solicitation by means of general advertising or in any
other manner with respect to the Trust Certificate. The Proposed Transferee will
not sell or otherwise transfer any Trust Certificates, except in compliance with
the provisions of the Trust Agreement.
Date:_________________________ ______________________________
Name of Proposed Transferee
______________________________
Signature
______________________________
Name
______________________________
Titled
================================================================================
F-2
