EXHIBIT 10.5
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EXECUTION COPY
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TRUST AGREEMENT
Among
XXXXXXXXX MORTGAGE FUNDING CORPORATION,
as Depositor
XXXXXXXXX MORTGAGE ASSET CORPORATION,
as Sponsor
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
Dated as of December 1, 1998
TMA MORTGAGE FUNDING TRUST I
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TABLE OF CONTENTS
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Page
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ARTICLE I
Definitions
SECTION 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
SECTION 1.02. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE II
ORGANIZATION
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SECTION 2.01. Name of Trust; Statement of Intent. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.02. Office. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.03. Purposes and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
SECTION 2.04. Appointment of Owner Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.05. Initial Capital Contribution of Owner Trust Estate. . . . . . . . . . . . . . . . . . . . 8
SECTION 2.06. Declaration of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.07. Liability of the Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.08. Title to Trust Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.09. Situs of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 2.10. Representations and Warranties of the Depositor and the Sponsor . . . . . . . . . . . . . 9
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.01. Initial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.02. The Trust Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.03. Authentication of Trust Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.04 Registration of Transfer and Exchange of Trust Certificates. . . . . . . . . . . . . . . . 10
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates . . . . . . . . . . . . . . . . . 11
SECTION 3.06. Persons Deemed Certificateholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.07. Access to List of Certificateholders' Names and Addresses . . . . . . . . . . . . . . . . 11
SECTION 3.08. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.09. Appointment of Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.10. Trust Certificate Transfer Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . 12
SECTION 3.11. Note and Collateral Purchase Options. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.12. Beneficial Owner Limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.01. Prior Notice to Certificateholders and Note Insurer with Respect to Certain
Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 4.02. Action by Certificateholders with Respect to Certain Matters. . . . . . . . . . . . . . . 15
SECTION 4.03. Action by Certificateholders with Respect to Bankruptcy . . . . . . . . . . . . . . . . . 15
SECTION 4.04. Restrictions on Certificateholders' Power . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.05. Majority Control. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.01. Establishment of Trust Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.02. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.03. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.04. No Segregation of Moneys; No Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.05. Accounting and Reports to the Certificateholders, the Internal Revenue Service and Others 16
SECTION 5.06. Signature on Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.01. General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.02. General Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.03. Action upon Instruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 6.04. No Duties Except as Specified in the Trust Agreement or in Instructions . . . . . . . . . 18
SECTION 6.05. No Action Except Under Specified Documents or Instructions. . . . . . . . . . . . . . . . 18
SECTION 6.06. Restrictions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 6.07. Delegation to Indenture Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.01. Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 7.02. Furnishing of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.03. Representations and Warranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 7.04. Reliance; Advice of Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.05. Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates, Mortgage Loans or Pooled Certificates. . 20
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes. . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE
SECTION 8.01. Owner Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8.02. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 8.03. Payments to the Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE IX
TERMINATION OF TRUST AGREEMENT
SECTION 9.01. Termination of Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE X
SUCCESSOR OWNER TRUSTEES ANDADDITIONAL OWNER TRUSTEES
SECTION 10.01. Eligibility Requirements for Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 10.02. Resignation or Removal of Owner Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 10.03. Successor Owner Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10.04. Merger or Consolidation of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee. . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 11.02. No Legal Title to Owner Trust Estate in Certificateholders . . . . . . . . . . . . . . . 25
SECTION 11.03. Limitations on Rights of Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.04. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.05. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.06. Separate Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.07. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.08. No Petition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 11.09. No Recourse. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.10. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.11. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.12. Grant of Certificateholder Rights to NoteInsurer. . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.13. Third-Party Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 11.14. The Note Insurer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
APPENDIX A Definitions
EXHIBIT A Form of Trust Certificate
EXHIBIT B Form of Certificate of Trust
EXHIBIT C Form of Purchaser's Representation Letter
TRUST AGREEMENT (the "Trust Agreement") dated as of December 1, 1998, among
XXXXXXXXX MORTGAGE FUNDING CORPORATION, a Delaware corporation, as depositor
(the "Depositor"), XXXXXXXXX MORTGAGE ASSET CORPORATION, as sponsor, (the
"Sponsor") and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as
owner trustee (the "Owner Trustee").
In consideration of the premises and the mutual agreements herein
contained, the Depositor and the Owner Trustee hereby agree as follows:
ARTICLE I
Definitions
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SECTION 1.01. Definitions. For all purposes of the Trust Agreement,
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except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in Appendix A hereto which are incorporated by
reference herein. All other capitalized terms used herein shall have the
meanings specified herein.
SECTION 1.02. Rules of Construction. Unless the context otherwise
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requires:
(a) All terms defined in the 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 the Trust Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in the Trust Agreement or in any such certificate or other document, and
accounting terms partly defined in the 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 the 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 the 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 the Trust Agreement shall refer to the Trust Agreement as a
whole and not to any particular provision of the Trust Agreement; Section and
Exhibit references contained in the Trust Agreement are references to Sections
and Exhibits in or to the Trust Agreement unless otherwise specified; and the
term "including" shall mean "including without limitation".
(d) The definitions contained in the 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.
ARTICLE II
F
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Organization
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SECTION 2.01. Name of Trust; Statement of Intent. The Trust created
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hereby shall be known as "TMA Mortgage Funding Trust I," 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 on behalf of the
Trust. The parties hereto intend that the Trust shall constitute a business
trust within the meaning of Section 3801(a) of the Business Trust Statute and
that the Trust Agreement constitute the governing instrument of the Trust in
accordance with the Business Trust Statute. The Owner Trustee is hereby
authorized to file a certificate of trust with the Secretary of State of the
State of Delaware pursuant to Section 3810(a) of the Business Trust Statute.
SECTION 2.02. Office. The office of the Trust shall be in care of the
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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 Owners, the
Depositor and the Paying Agent.
SECTION 2.03. Purposes and Powers. The purpose of the Trust is to engage
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in the following activities, and the Trust shall have the power and authority:
(i) to issue the Notes pursuant to the Indenture and the Trust
Certificates and certain purchase options pursuant to the Trust Agreement and to
sell, transfer or exchange the Notes and to sell, transfer and exchange the
Trust Certificates;
(ii) with the proceeds of the sale of the Notes to purchase the
Mortgage Loans, the Pooled Certificates, the Swap Agreements and certain other
assets, to pay the organizational, start-up and transactional expenses of the
Trust, and to pay the balance to the Depositor pursuant to the Sale and
Servicing Agreement;
(iii) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute to the
Certificateholders pursuant to the terms of the Trust Agreement and the Sale and
Servicing Agreement any portion of the Trust Estate released from the Lien of,
and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith;
(vi) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation of the
Trust Estate and the making of payments or distributions to the
Certificateholders, the Noteholders and others as specified in the Basic
Documents;
(vii) to establish accounts in accordance with the Basic Documents
and to make deposits into and withdrawals from such accounts in accordance with
the Basic Documents;
(viii) to enter into the Note Purchase Agreement and to perform
its obligations thereunder; and
(ix) to enter into the Recognition Agreement and to perform its
obligations thereunder.
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 the Trust
Agreement or the other Basic Documents.
SECTION 2.04. Appointment of Owner Trustee. The Depositor hereby appoints
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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
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Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1.00. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Depositor
shall pay organizational expenses of the Trust as they may arise or shall, upon
the request of the Owner Trustee, promptly reimburse the Owner Trustee for any
such expenses paid by the Owner Trustee.
SECTION 2.06. Declaration of Trust. The Owner Trustee hereby declares
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that it will hold the Owner Trust Estate in trust upon and subject to the
conditions set forth herein for the use and benefit of the 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 the Trust Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, solely for federal income tax purposes, the Trust shall be treated as a
grantor trust for federal income tax purposes. The parties agree that, unless
otherwise required by appropriate tax authorities, the Trust will file or cause
to be filed annual or other necessary returns, reports and other forms
consistent with the characterization of the Trust as a grantor trust for such
tax purposes. Effective as of the date hereof, the Owner Trustee shall have all
rights, powers and duties set forth herein and in the Business Trust Statute
with respect to accomplishing the purposes of the Trust.
SECTION 2.07. Liability of the Certificateholders. No Certificateholder
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shall have any personal liability for any liability or obligation of the Trust.
SECTION 2.08. Title to Trust Property. Legal title to all the Owner Trust
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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
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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 State of
Illinois or the State of California. 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. Payments will be received by the Trust only in Delaware,
Illinois or California, and payments will be made by the Trust only from
Delaware, Illinois 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 and the
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Sponsor. The Depositor and the Sponsor hereby represent and warrant to the
Owner Trustee that:
(a) The Depositor and the Sponsor are duly organized and validly
existing as corporations in good standing under the laws of the jurisdiction of
their respective jurisdictions of incorporation, with power and authority to own
their properties and to conduct their business as such properties are currently
owned and such business is presently conducted.
(b) The Depositor and the Sponsor have the power and authority to
execute and deliver the Trust Agreement and to carry out its terms; the
Depositor has full power and authority to sell and assign the property to be
sold and assigned to and deposited with the Trust and the Depositor has duly
authorized such sale and assignment and deposit to the Trust by all necessary
corporate action; and the execution, delivery and performance of the Trust
Agreement have been duly authorized by the Depositor and the Sponsor by all
necessary corporate action.
(c) The Trust Agreement constitutes a legal, valid and binding
obligation of the Depositor and the Sponsor enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization and similar
laws relating to creditors' rights generally and subject to general principles
of equity.
(d) The consummation of the transactions contemplated by the 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 certificate of
incorporation or bylaws of the Depositor or the Sponsor, or any material
indenture, agreement or other instrument to which the Depositor or the Sponsor
is a party or by which either is bound; nor result in the creation or imposition
of any Lien upon any of the properties of the Depositor or the Sponsor pursuant
to the terms of any such indenture, agreement or other instrument (other than
pursuant to the Basic Documents); nor violate any law or, to the best of the
Depositor's and the Sponsor's knowledge, any order, rule or regulation
applicable to the Depositor or the Sponsor of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Depositor or the Sponsor or their
respective properties.
(e) To the Depositor's and the Sponsor's best knowledge, there are
no proceedings or investigations pending or threatened before any court,
regulatory body, administrative agency or other governmental instrumentality
having jurisdiction over the Depositor or the Sponsor or their respective
properties: (A) asserting the invalidity of the Trust Agreement, (B) seeking
to prevent the consummation of any of the transactions contemplated by the Trust
Agreement or (C) seeking any determination or ruling that might materially and
adversely affect the performance by the Depositor or the Sponsor of the
obligations of either under, or the validity or enforceability of, the Trust
Agreement.
ARTICLE III
Trust Certificates and Transfer of Interests
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SECTION 3.01. Initial Ownership. Upon the formation of the Trust by the
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contribution by the Depositor pursuant to Section 2.05 and until the issuance of
the Trust Certificates, the Depositor shall be the sole beneficiary of the
Trust.
SECTION 3.02. The Trust Certificates. (a) The Trust Certificates shall
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be substantially in the form set forth in Exhibit A hereto, with an initial
Certificate Balance of $32,362,457. The Trust Certificates shall be issued in
minimum denominations of $100,000 and integral multiples of $1,000 in excess
thereof; provided however that one Trust Certificate may be issued in a
denomination that represents any residual amount of the Initial Certificate
Balance. The Trust Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of an authorized officer of the Owner Trustee.
Trust 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 the 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 Trust Certificates or did not hold such offices at the date of
authentication and delivery of such Trust Certificates. Notwithstanding the
foregoing or any other provision contained herein, so long as the
Certificateholder Collateral Purchase Option or the Note Purchase Option is
outstanding, there shall only be a single holder of all of the Trust
Certificates which Certificateholder shall also own such options.
(b) On the Closing Date, the Trust Certificates, in the initial
Certificate Balance of $32,362,457, shall be issued to TMA Acceptance Corp. in
exchange for the purchase price of $32,362,457 and registered in the name of TMA
Acceptance Corp. The Trust hereby directs that such cash amount be paid to, or
at the direction of, the Depositor as part of the consideration for the purchase
of the Trust Estate pursuant to the terms of the Sale and Servicing Agreement.
SECTION 3.03. Authentication of Trust Certificates. Concurrently with the
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initial sale of the Collateral to the Trust pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall cause the Trust Certificates in an aggregate
principal amount equal to the Initial Certificate Balance to be executed on
behalf of the Trust, authenticated and delivered to or upon the written order of
TMA Acceptance Corp., as provided in Section 3.02(b), signed by its chairman of
the board, its president, any vice president, secretary or any assistant
treasurer, without further corporate action by the Depositor, in authorized
denominations. No Trust Certificate shall entitle its Holder to any benefit
under the Trust Agreement or be valid for any purpose unless there shall appear
on such Trust Certificate a certificate of authentication substantially in the
form set forth in Exhibit A, executed by the Owner Trustee, by manual signature;
such authentication shall constitute conclusive evidence that such Trust
Certificate shall have been duly authenticated and delivered hereunder. All
Trust Certificates shall be dated the date of their authentication. No further
Trust Certificates shall be issued except pursuant to Section 3.04 or 3.05
hereunder.
SECTION 3.04. Registration of Transfer and Exchange of Trust Certificates.
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The Certificate Registrar shall keep or cause to be kept, at the office or
agency maintained pursuant to Section 3.08, a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Owner Trustee
shall provide for the registration of Trust Certificates and, subject to Section
3.10 hereof, of transfers and exchanges of Trust Certificates as herein
provided. The Owner Trustee shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Trust Certificate at the
office or agency maintained pursuant to Section 3.08, the Owner Trustee shall
execute, authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Trust Certificates in authorized denominations of a
like aggregate amount dated the date of authentication by the Owner Trustee or
any authenticating agent. At the option of a Certificateholder, Trust
Certificates may be exchanged for other Trust Certificates of authorized
denominations of a like aggregate amount upon surrender of the Trust
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.08. Whenever any Trust Certificates are surrendered for exchange, the
Owner Trustee shall execute on behalf of the Trust, authenticate and deliver one
or more new Trust Certificates dated the date of authentication by the Owner
Trustee or any authenticating agent to the Certificateholder making such
exchange.
Every Trust Certificate presented or surrendered for registration of
transfer or exchange shall be accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the Certificateholder or such Certificateholder's attorney duly
authorized in writing. Each Trust Certificate surrendered for registration of
transfer or exchange shall be canceled and subsequently disposed of by the Owner
Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Trust 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 Trust Certificates.
SECTION 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates. If
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(a) any mutilated Trust 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 Trust Certificate, and (b)
there shall be delivered to the Certificate Registrar and the Owner Trustee such
security or indemnity as may be required by them to save each of them harmless,
then in the absence of notice that such Trust Certificate has been acquired by a
protected purchaser, the Owner Trustee on behalf of the Trust shall execute and
the Owner Trustee shall authenticate and deliver, in exchange for or in lieu of
any such mutilated, destroyed, lost or stolen Trust Certificate, a new Trust
Certificate of like tenor and denomination. In connection with the issuance of
any new Trust Certificate under this Section, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Certificate issued pursuant to this Section shall constitute
conclusive evidence of ownership in the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Trust Certificate shall be found at any
time.
If, after the delivery of a replacement Trust Certificate pursuant to this
Section, a protected purchaser of the original Trust Certificate in lieu of
which such replacement Trust Certificate was issued presents for payment such
original Trust Certificate, the Owner Trustee shall be entitled to recover such
replacement Trust Certificate (and any distributions made with respect thereto)
from the Person to whom it was delivered or any Person taking such replacement
Trust Certificate from such Person to whom such replacement Trust Certificate
was delivered or any assignee of such Person, except a protected purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Owner Trustee or
Certificate Registrar in connection therewith.
SECTION 3.06. Persons Deemed Certificateholders. Prior to due
-----------------------------------
presentation of a Trust Certificate for registration of transfer, the Owner
Trustee, the Certificate Registrar or any Paying Agent or other agent thereof
may treat the Person in whose name any Trust Certificate is registered in the
Certificate Register as the owner of such Trust Certificate for the purpose of
receiving distributions pursuant to Section 5.02 and for all other purposes
whatsoever, and none of the Owner Trustee, the Certificate Registrar or any
Paying Agent or other agent thereof shall be bound by any notice to the
contrary.
SECTION 3.07. Access to List of Certificateholders' Names and Addresses.
----------------------------------------------------------
The Owner Trustee shall furnish or cause to be furnished to the Paying Agent,
the Servicer and the Depositor, no later than the fifth Business Day following
each Record Date, a list, in such form as the Paying Agent, the Servicer or the
Depositor may reasonably require, of the names and addresses of the
Certificateholders as of the most recent Record Date. If three or more
Certificateholders or one or more Holders of Trust Certificates evidencing not
less than 25% of the aggregate Certificate Balance apply in writing to the Owner
Trustee, and such application states that the applicants desire to communicate
with other Certificateholders with respect to their rights under the Trust
Agreement or under the Trust Certificates and such application is accompanied by
a copy of the communication that such applicants propose to transmit, then the
Owner Trustee shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Upon receipt of any such application, the
Owner Trustee will promptly notify the Depositor by providing a copy of such
application and a copy of the list of Certificateholders produced in response
thereto. Each Certificateholder, by receiving and holding a Trust Certificate,
shall be deemed to have agreed not to hold any of the Depositor, the Certificate
Registrar or the Owner Trustee accountable by reason of the disclosure of its
name and address, regardless of the source from which such information was
derived.
SECTION 3.08. Maintenance of Office or Agency. The Owner Trustee shall
---------------------------------
maintain in the Borough of Manhattan, The City of New York, an office or offices
or agency or agencies where Trust 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 Trust Certificates and the Basic Documents
may be served. The Owner Trustee initially designates Xxxxxx Trust Company of
New York, 00 Xxxx Xxxxxx, Xxxx Xxxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000; Attn: Xxxxxxxx Xxxxxx as its office for such purposes. The Owner Trustee
shall give prompt written notice to the Depositor and to the Certificateholders
of any change in the location of the Certificate Register or any such office or
agency.
SECTION 3.09. Appointment of Paying Agent. The Paying Agent shall make
-----------------------------
distributions to Certificateholders from the Certificate Distribution Account
pursuant to Section 5.02 and shall report the amounts of such distributions to
the Owner Trustee. Any Paying Agent shall have the revocable power to withdraw
funds from the Certificate Distribution Account for the purpose of making the
distributions referred to above. The Owner Trustee may revoke such power and
remove the Paying Agent if the Owner Trustee determines in its sole discretion
that the Paying Agent shall have failed to perform its obligations under the
Trust Agreement in any material respect. The Paying Agent initially shall be
Bankers Trust Company of California, N.A. Bankers Trust Company of California,
N.A., shall be permitted to resign as Paying Agent upon 30 days' written notice
to the Owner Trustee, the Note Insurer and the Servicer. In the event that
Bankers Trust Company of California, N.A., shall no longer be the Paying Agent,
the Owner Trustee shall appoint a successor to act as Paying Agent (which shall
be a bank or trust company acceptable to the Note Insurer). The Owner Trustee
shall cause such successor Paying Agent or any additional Paying Agent appointed
by the Owner Trustee to execute and deliver to the Owner Trustee an instrument
in which such successor Paying Agent or additional Paying Agent shall agree with
the Owner Trustee that, as Paying Agent, such successor Paying Agent or
additional Paying Agent will hold all sums, if any, held by it for payment to
the Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. The
Paying Agent shall return all unclaimed funds to the Owner Trustee and upon
removal of a Paying Agent such Paying Agent shall also return all funds in its
possession to the Owner Trustee. The provisions of Sections 7.01, 7.04 and 8.02
shall apply to Bankers Trust Company of California, N.A. or the Owner Trustee
also in its role as Paying Agent, for so long as Bankers Trust Company of
California, N.A. or the Owner Trustee shall act as Paying Agent and, to the
extent applicable, to any other paying agent appointed hereunder. Any reference
in the Trust Agreement to the Paying Agent shall include any co-paying agent
unless the context requires otherwise.
SECTION 3.10. Trust Certificate Transfer Restrictions. The Trust
------------------------------------------
Certificates may not be offered or sold except to the Depositor or an Affiliate
thereof or to institutional "accredited investors" (as defined in Rule
501(a)(1)-(3) or (7) under the Securities Act who are United States persons (as
defined in Section 7701(a)(30) of the Code) in reliance on an exemption from the
registration requirements of the Securities Act. Further, for purposes of the
Investment Company Act of 1940, as amended, for so long as the Note Purchase
Option or either of the Collateral Purchase Options are outstanding, and until
an opinion of counsel is provided to the Owner Trustee to the effect that such
limitation is no longer necessary, the total number of beneficial owners of the
Certificates may not exceed three. Notwithstanding the foregoing, no transfer
of a Trust Certificate shall be permitted, and no such transfer shall be
registered by the Certificate Registrar or be effective hereunder, if, for
purposes of of Treasury regulation 1.7704-1(h)(3), the number of beneficial
owners of Trust Certificates exceeds 99. For purposes of Treasury regulation
1.7704-1(h)(3), in determining the number of beneficial owners, the Certificate
Registrar may treat the number of beneficial owners as equal to the number of
registered holders, provided that each holder represents that it is the
beneficial owner and (i) is an individual or a United States corporation (other
than an S corporation) or (ii) no principal purpose of the use of the entity to
hold the Trust Certificate is to permit the Trust to satisfy the 100 partners
limitation of Treasury regulation 1.7704-1(h)(3).
(a) The Trust Certificates have not been registered or
qualified under the Securities Act, or any state securities law. No transfer,
sale, pledge or other disposition of any Trust Certificate shall be made unless
such disposition is made pursuant to an effective registration statement under
the Securities Act and effective registration or qualification under applicable
state securities laws, or is made in a transaction which does not require such
registration or qualification. In the event that a transfer is to be made in
reliance upon an exemption from the Securities Act, the Owner Trustee may
require, in order to assure compliance with the Securities Act, that the
Certificateholder's prospective transferee certify to the Owner Trustee in
writing the facts surrounding such disposition. Unless the Owner Trustee
requests otherwise, such certification shall be substantially in the form of
Exhibit C hereto. In the event that such certification of facts does not on its
face establish the availability of an exemption under the Securities Act, the
Owner Trustee may require the prospective transferee to provide an opinion of
counsel satisfactory to it that such transfer may be made pursuant to an
exemption from the Securities Act, which opinion of counsel shall not be an
expense of the Owner Trustee or of the Trust.
(b) The Trust Certificates and any beneficial interest in such
Trust Certificates may not be acquired by or with the assets of (a) employee
benefit plans, retirement arrangements, individual retirement accounts or Xxxxx
plans subject to either Title I of the Employee Retirement Income Security Act
of 1974, as amended, or Section 4975 of the Internal Revenue Code of 1986, as
amended, or (b) entities (including insurance company general accounts) whose
underlying assets include plan assets by reason of the investment by any such
plans, arrangements or accounts in such entities (a "Benefit Plan Investor") and
any such purported transfer shall not be effective. Each transferee of a Trust
Certificate shall be required to represent (a) that it is not a Benefit Plan
Investor and is not acquiring such Trust Certificate with the assets of a
Benefit Plan Investor and (b) that if such Trust Certificate is subsequently
deemed to be a plan asset, it will dispose of such Trust Certificate.
(c) Each Trust Certificate will bear legends substantially to the
following effect.
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT") OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING THIS TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS AND TO A PERSON WHO HAS FURNISHED TO THE OWNER TRUSTEE (A)
AN INVESTMENT LETTER SATISFACTORY TO THE OWNER TRUSTEE TO THE EFFECT THAT SUCH
PURCHASER IS AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(A)(1)-(3) OR (7) UNDER THE ACT AND (B) IF REQUIRED, AN OPINION OF COUNSEL
SATISFACTORY TO THE OWNER TRUSTEE.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR XXXXX PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
IF THE CERTIFICATEHOLDER COLLATERAL PURCHASE OPTION OR THE NOTE PURCHASE OPTION
ARE OUTSTANDING, THIS TRUST CERTIFICATE MUST REPRESENT ALL OUTSTANDING TRUST
CERTIFICATES AND SHALL BE HELD BY ONLY ONE HOLDER.
THE HOLDER OF THIS TRUST CERTIFICATE FURTHER UNDERSTANDS AND AGREES THAT THE
NUMBER OF BENEFICIAL OWNERS OF ALL TRUST CERTIFICATES MAY NOT EXCEED 3 IN
NUMBER; THAT TRANSFERS OF THE TRUST CERTIFICATES WILL BE RESTRICTED ACCORDINGLY;
AND THAT THE HOLDER HEREOF WILL NOTIFY THE OWNER TRUSTEE IF THE NUMBER OF
BENEFICIAL OWNERS OF THIS TRUST CERTIFICATE WILL CHANGE AS PROVIDED IN THE TRUST
AGREEMENT.
SECTION 3.11. Note and Collateral Purchase Options. (a) As long as one
-------------------------------------
Person holds 100% of the Trust Certificates there is hereby granted to such
Certificateholder, the Note Purchase Option and the Certificateholder Collateral
Purchase Option. The Note Purchase Option shall permit such Certificateholder
to purchase all of the outstanding Notes on any Payment Date for the Note
Purchase Price and otherwise in accordance with the procedures set forth in
Article X of the Indenture. The Certificateholder Collateral Purchase Option
shall permit such Certificateholder to purchase all of the Collateral on any
Payment Date for the Certificateholder Collateral Purchase Price and otherwise
in accordance with the procedures set forth in Article X of the Indenture. Each
of the Note Purchase Option and the Certificateholder Collateral Purchase Option
shall be automatically transferred to the transferee of all of the Trust
Certificates upon such a transfer. Such Options shall cease to exist and be
void if there is more than one holder of the Trust Certificates.
(b) There is hereby granted to Bear Xxxxxxx the Bear Xxxxxxx
Collateral Purchase Option. The Bear Xxxxxxx Collateral Purchase Option is
transferable in whole but not in part by Bear Xxxxxxx or any assignee and does
not require Bear Xxxxxxx to hold any Trust Certificates or Notes. The Bear
Xxxxxxx Collateral Purchase Option shall permit the holder thereof to purchase
all of the Collateral on any Payment Date for the Bear Xxxxxxx Collateral
Purchase Price and otherwise in accordance with the procedures set forth in
Article X of the Indenture. Bear Xxxxxxx and any subsequent transferor shall
provide notice of any transfer of the Bear Xxxxxxx Collateral Purchase Option
and of the name and address of the transferee to the Owner Trustee, the
Indenture Trustee, the Note Insurer, the Servicer and the Rating Agencies.
(c) Upon the exercise of any option granted pursuant to this
Section 3.11, payment of the applicable exercise price and transfer of the Notes
or Collateral to or as directed by the Person exercising such option, such
respective option shall terminate. Exercise of the Note Purchase Option shall
not affect the Collateral Purchase Options. Exercise of a Collateral Purchase
Option and payment of the applicable exercise price and transfer of the
Collateral to the Person exercising such option shall cause the other Collateral
Purchase Option and the Note Purchase Option to terminate. Notwithstanding the
foregoing, if the holder thereof gives notice of exercise of the Bear Xxxxxxx
Collateral Purchase Option, the sole Certificateholder shall have the right
during the time period provided in Section 10.01 of the Indenture to itself
exercise its Certificateholder Collateral Purchase Option and, subject to its
provision of the Certificateholder Collateral Purchase Price by the time
provided in the Indenture, to purchase the Collateral. In such latter event,
the Bear Xxxxxxx Collateral Purchase Option shall terminate.
SECTION 3.12. Beneficial Owner Limitation. The Certificate Registrar shall
---------------------------
keep a list of the total number of beneficial owners of Trust Certificates as
evidenced by the claims made by Holders on each representation letter executed
by a prospective Holder pursuant to Section 3.10(a). In the event that the
transfer of Trust Certificates would cause the total number of beneficial owners
of Trust Certificates to exceed three, the Owner Trustee shall not permit the
proposed transfer of such Trust Certificates. Any transfer of Trust Certificates
that causes the total number of beneficial owners of Trust Certificates to
exceed three shall be null and void and the Certificate Register shall be
amended to reflect such voided transfer; provided, however, that in the event
-------- -------
(i) all of the Purchase Options are no longer outstanding and (ii) an opinion
of counsel, acceptable to the Depositor, the Note Insurer, the Indenture Trustee
and the Owner Trustee, is provided to such Persons, at the sole cost and expense
of the provider thereof, to the effect that for purposes of the Investment
Company Act of 1940, as amended, the total number of beneficial owners of all
Notes and Trust Certificates may exceed 100, then the total number of beneficial
owners of the Trust Certificates may exceed three and the related restrictive
legend may be removed from the Trust Certificates.
ARTICLE IV
Actions by Owner Trustee
------------------------
SECTION 4.01. Prior Notice to Certificateholders and Note Insurer 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 Note Insurer and the
Certificateholders in writing of the proposed action and neither the
Certificateholders nor the Note Insurer shall have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders or the Note Insurer have withheld consent or provided
alternative direction; provided, however, that any direction by the
Certificateholders shall require the prior consent of the Note Insurer:
(a) the initiation of any material claim or lawsuit by the Trust
(except claims or lawsuits brought in connection with the collection of the
Mortgage Loans or under the Pooled Certificates) and the compromise of any
material action, claim or lawsuit brought by or against the Trust (except with
respect to the aforementioned claims or lawsuits for collection of the Mortgage
Loans or under the Pooled Certificates);
(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 or the Note Insurer is
required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder or the Note Insurer is not
required and such amendment materially adversely affects the interest of the
Certificateholders or the Note Insurer;
(e) the appointment pursuant to the Indenture of a successor Paying
Agent or Indenture Trustee or pursuant to the Trust Agreement of a successor
Certificate Registrar, or the consent to the assignment by the Paying Agent or
Indenture Trustee or Certificate Registrar of its obligations under the
Indenture or the Trust Agreement, as applicable;
(f) the consent to the calling or waiver of any default of any Basic
Document;
(g) the consent to the assignment of the Indenture Trustee or Servicer
of their respective obligations under any Basic Document;
(h) except as provided in Article IX hereof, the dissolution,
termination or liquidation of the Trust in whole or in part;
(i) the merger or consolidation of the Trust with or into any other
entity, or conveyance or transfer of all or substantially all of the Trust's
assets to any other entity;
(j) the incurrence, assumption or guaranty in the Trust of any
indebtedness other than as set forth in the Trust Agreement or the Basic
Documents;
(k) the doing of any act that conflicts with any of the Basic
Documents;
(l) the doing of any act which would make it impossible to carry on the
ordinary business of the Trust as described in Section 2.3 hereof;
(m) the confession of a judgment against the Trust;
(n) the possession of Trust assets, or assignment of the Trust's right
to property, for other than a Trust purpose as determined pursuant to the Trust
Agreement and the other Basic Documents;
(o) the lending by the Trust of any funds to any Person;
(p) the change in the Trust's purpose and powers from those set forth
in this Trust Agreement; or
(q) the removal or replacement of the Servicer or the Indenture
Trustee. In addition the Trust shall not commingle its assets with those of any
other entity. The Trust shall maintain its financial and accounting books and
records separate from those of any other entity. Except as expressly set forth
herein, the Trust shall pay its indebtedness, operating expenses and liabilities
from its own funds, and the Trust shall not pay the indebtedness, operating
expenses and liabilities of any other entity.
SECTION 4.02. Action by Certificateholders with Respect to Certain
----------------------------------------------------------
Matters. The Owner Trustee shall not have the power, (a) except upon the
written direction of the Certificateholders with the written consent of the Note
Insurer, to remove the Servicer under the Sale and Servicing Agreement pursuant
to Section 7.1 thereof, to consent to a successor Servicer, to remove the
Indenture Trustee under the Indenture pursuant to Section 6.08 thereof or to
consent to a successor Indenture Trustee or (b) except upon the written
direction of the Certificateholders and as expressly provided in the Basic
Documents, sell the Mortgage Loans and/or the Pooled Certificates 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 4.03. Action by Certificateholders with Respect to Bankruptcy.
----------------------------------------------------------
The Owner Trustee shall not have the power, except upon the written direction of
all of the Certificateholders with the written consent of the Note Insurer, and
to the extent otherwise consistent with the Basic Documents, to (i) institute
proceedings to have the Trust declared or adjudicated a bankrupt or insolvent,
(ii) consent to the institution of bankruptcy or insolvency proceedings against
the Trust, (iii) file a petition or consent to a petition seeking reorganization
or relief on behalf of the Trust under any applicable federal or state law
relating to bankruptcy, (iv) consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator (or any similar official) of the
Trust or a substantial portion of the property of the Trust, (v) make any
assignment for the benefit of the Trust's creditors, (vi) cause the Trust to
admit in writing its inability to pay its debts generally as they become due,
(vii) take any action, or cause the Trust to take any action, in furtherance of
any of the foregoing (any of the above, a "Bankruptcy Action"). So long as the
Indenture and the Insurance Agreement remain in effect and no Note Insurer
Default exists, no Certificateholder shall have the power to take and shall not
take, any Bankruptcy Action with respect to the Trust or direct the Owner
Trustee to take any Bankruptcy Action with respect to the Trust.
SECTION 4.04. 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 the Trust Agreement or any of the Basic
Documents or would be contrary to Section 2.03, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
SECTION 4.05. Majority Control. Except as expressly provided herein, any
----------------
action that may be taken by the Certificateholders under the Trust Agreement may
be taken by the Holders of Trust Certificates evidencing not less than a
majority of the aggregate Certificate Balances. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to the
Trust Agreement shall be effective if signed by Certificateholders evidencing
not less than a majority of the aggregate Certificate Balances at the time of
the delivery of such notice.
ARTICLE V
Application of Trust Funds; Certain Duties
------------------------------------------
SECTION 5.01. Establishment of Trust Account. The Owner Trustee, for the
------------------------------
benefit of the Certificateholders, shall cause the Paying Agent to establish and
maintain in the name of the Trust a segregated account with the Indenture
Trustee (the "Certificate Distribution Account"), bearing a designation clearly
indicating that the funds deposited therein are held for the benefit of the
Certificateholders.
SECTION 5.02. Application of Trust Funds. (a) On each Payment Date, the
---------------------------
Owner Trustee shall, or shall cause the Paying Agent to, distribute to the
Certificateholders, pro rata based on their respective Certificate Balances,
from amounts deposited in the Certificate Distribution Account received from the
Indenture Trustee pursuant to Section 5.2 of the Sale and Servicing Agreement,
the Certificate Interest Distribution Amount, the Certificate Principal
Distribution Amount and Additional Certificate Interest in each case, if any.
(b) On each Payment Date, the Owner Trustee shall, or shall cause the
Paying Agent to, send to each Certificateholder the statement or statements
provided to the Owner Trustee by the Indenture Trustee pursuant to Section 5.4
of the Sale and Servicing Agreement with respect to such Payment Date provided
that such statement or statements have actually been received by the Owner
Trustee.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall reduce
the amount otherwise distributable to the Certificateholder in accordance with
this Section. The Owner Trustee is hereby authorized and directed to retain
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 Trust
and remitted to the appropriate taxing authority. If there is a possibility
that withholding tax is payable with respect to a distribution (such as a
distribution to a non-U.S. Certificateholder), the Owner Trustee may in its sole
discretion withhold such amounts in accordance with this paragraph (c). In the
event that a Certificateholder wishes to apply for a refund of any such
withholding tax, the Owner Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder agrees
to reimburse the Owner Trustee or the Paying Agent for any out-of-pocket
expenses incurred. In enforcing its rights hereunder, the Owner Trustee may
direct the Paying Agent to withhold the applicable tax and remit to the
appropriate taxing authority any such amounts withheld.
SECTION 5.03. Method of Payment. Subject to Section 9.01(c),
-------------------
distributions required to be made to Certificateholders on any Payment Date
shall be made to each Certificateholder of record on the related Record Date
either by check mailed to such Certificateholder at the address of such holder
appearing in the Certificate Register or by wire transfer, in immediately
available funds, to the account of such Certificateholder at a bank or other
entity having appropriate facilities therefor, if (i) such Certificateholder
shall have provided to the Certificate Registrar and the Certificate Registrar
has forwarded such information promptly to the Paying Agent appropriate written
instructions at least five Business Days prior to such Payment Date and such
Certificateholder's Trust Certificates in the aggregate evidence an original
denomination of not less than $1,000,000 or, (ii) such Certificateholder is the
Depositor, or an Affiliate thereof.
SECTION 5.04. No Segregation of Moneys; No Interest. Subject to Sections
-------------------------------------
5.01 and 5.02, moneys received by the Owner Trustee hereunder need not be
segregated in any manner except to the extent required by law or the Sale and
Servicing Agreement and may be deposited under such general conditions as may be
prescribed by law, and the Owner Trustee shall not be liable for any interest
thereon.
SECTION 5.05. Accounting and Reports to the Certificateholders, the
-----------------------------------------------------------
Internal Revenue Service and Others. The Indenture Trustee shall (a) maintain
-------------------------------
(or cause to be maintained) the books of the Trust on a calendar year basis on
the accrual method of accounting, (b) deliver (or cause to be delivered) to each
Certificateholder, as may be required by 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 or cause to be prepared, and file, or cause to be filed, all tax
returns, if any, relating to the Trust and direct the Owner Trustee, in writing,
to make such elections as from time to time may be required or appropriate under
any applicable state or federal statute or any rule or regulation thereunder so
as to maintain the Trust's characterization as a grantor trust for federal
income tax purposes, and (d) collect or cause to be collected any withholding
tax as described in and in accordance with Section 5.02(c) with respect to
income or distributions to Certificateholders. The Owner Trustee shall make all
elections pursuant to this Section 5.05 as directed by the Indenture Trustee in
writing.
SECTION 5.06. Signature on Returns. The Owner Trustee shall sign on
----------------------
behalf of the Trust the tax returns of the Trust, and any other returns as may
be required by law if any, furnished to it in execution form by the Depositor,
unless applicable law requires a Certificateholder to sign such documents. In
executing any such return, the Owner Trustee shall rely entirely upon, and shall
have no liability for information or calculations provided by the Depositor.
ARTICLE VI ARTICLE VI1
G
----
Authority and Duties of Owner Trustee
-------------------------------------
SECTION 6.01. 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, in each case, in such form as the
Depositor shall approve, 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, to take all actions required of the
Trust pursuant to the Basic Documents. The Owner Trustee is further authorized
from time to time to take, but shall not be obligated to take, such action as
the Servicer recommends with respect to the Basic Documents.
SECTION 6.02. 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 the Trust Agreement and the Basic Documents to which the Trust is a
party and to administer the Trust for the benefit of the Certificateholders,
subject to the Basic Documents and in accordance with the provisions of the
Trust Agreement. Notwithstanding the foregoing, the Owner Trustee shall be
deemed to have discharged its duties and responsibilities hereunder and under
the Basic Documents to the extent the Depositor has agreed hereunder or the
Servicer has agreed in the Sale and Servicing Agreement to perform any act or to
discharge any duty of the Owner Trustee hereunder or of the Trust under any
Basic Document, and the Owner Trustee shall not be held liable for the default
or failure of the Depositor or the Servicer to carry out its obligations under
the Sale and Servicing Agreement, or the Trust Agreement, as applicable.
SECTION 6.03. Action upon Instruction. (a) Subject to Article IV and
-------------------------
Section 7.01 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) 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 unable to decide between alternative
courses of action permitted or required by the terms of the Trust Agreement or
under any Basic Document, the Owner Trustee shall promptly give notice (in such
form as shall be appropriate under the circumstances) to the Certificateholders
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 received, the Owner Trustee shall not be
liable on account of such action to any Person. If the Owner Trustee shall not
have received appropriate instruction within 10 days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or may
be necessary under the circumstances) it may, but shall be under no duty to,
take or refrain from taking such action not inconsistent with the Trust
Agreement or the Basic Documents, as it shall deem to be in the best interests
of the Certificateholders, and shall have no liability to any Person for such
action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application
of any provision of the 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 the 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 may give notice (in
such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have received
appropriate instruction within 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 the Trust Agreement or the Basic
Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or
inaction.
SECTION 6.04. No Duties Except as Specified in the Trust Agreement 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 by the terms
of the Trust Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.03; and no implied duties or obligations
shall be read into the Trust Agreement or any other 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 the 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 6.05. No Action Except Under Specified Documents or Instructions.
----------------------------------------------------------
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Owner Trust Estate except (i) in accordance with the
powers granted to and the authority conferred upon the Owner Trustee pursuant to
the 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 6.03.
SECTION 6.06. Restrictions. The Owner Trustee shall not take any action
------------
that (a) is inconsistent with the purposes of the Trust set forth in Section
2.03 or (b) to the Actual Knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for federal income tax purposes. The
Certificateholders shall not direct the Owner Trustee to take action that would
violate the provisions of this Section.
SECTION 6.07 Delegation to Indenture Trustee. The Owner Trustee hereby
---------------------------------
delegates to the Indenture Trustee, and the Indenture Trustee hereby accepts,
the responsibility for reviewing on behalf of the Trust representations given in
connection with transfers of Notes under Section 4.07 of the Indenture.
ARTICLE VII
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Concerning the Owner Trustee
----------------------------
SECTION 7.01. Acceptance of Trusts and Duties. The Owner Trustee accepts
-------------------------------
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of the Trust Agreement. The
Owner Trustee also agrees to disburse all moneys actually received by it
constituting part of the Owner Trust Estate upon the terms of the Trust
Agreement and the other Basic Documents. The Owner Trustee shall not be
answerable or accountable hereunder or under any other Basic Document under any
circumstances, except (i) for its own willful misconduct, bad faith or gross
negligence or (ii) in the case of the inaccuracy of any representation or
warranty contained in Section 7.03 expressly made by the Owner Trustee. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment
made by an Authorized Officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Depositor or any Certificateholder;
(c) no provision of the Trust Agreement or any other Basic Document
shall require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers hereunder
or under any Basic Document if the Owner Trustee shall have reasonable grounds
for believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of the 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, other than the execution and the
certificate of authentication on the Trust Certificates, and the Owner Trustee
shall in no event assume or incur any liability, duty, or obligation to any
Noteholder or to any Certificateholder, other than as expressly provided for
herein or expressly agreed to in the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or misconduct
of the Depositor, the Indenture Trustee or the Servicer under any of the
Basic Documents or otherwise and the Owner Trustee shall have no obligation or
liability to perform the obligations of the Trust under the Trust Agreement or
the other Basic Documents that are required to be performed by the Indenture
Trustee under the Indenture or the Servicer or the Depositor under the Sale and
Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by the Trust Agreement, or to institute,
conduct or defend any litigation under the Trust Agreement or otherwise or in
relation to the Trust Agreement or any other 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 the Trust Agreement or in
any other Basic Document shall not be construed as a duty, and the Owner
Trustee shall not be answerable for other than its willful misconduct, bad faith
or gross negligence in the performance of any such act.
SECTION 7.02. Furnishing of Documents. The Owner Trustee shall furnish to
-----------------------
the Certificateholders and the Note Insurer promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments furnished
to the Owner Trustee under the Basic Documents.
SECTION 7.03. Representations and Warranties. Wilmington Trust Company
--------------------------------
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 the Trust Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of the Trust Agreement, and the Trust Agreement
will be executed and delivered by one of its officers who is duly authorized to
execute and deliver the Trust Agreement on its behalf.
(c) Neither the execution nor the delivery by it of the 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.
SECTION 7.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall
-----------------------------
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under the Trust Agreement or the
other Basic Documents, the Owner Trustee may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and 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.
SECTION 7.05. Not Acting in Individual Capacity. Except as provided in
-----------------------------------
this Article VII, 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 Trustee by reason
of the transactions contemplated by the Trust Agreement or any Basic Document
shall look only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.06. Owner Trustee Not Liable for Trust Certificates, Mortgage
-----------------------------------------------------------
Loans or Pooled Certificates. The recitals contained herein and in the
-------------------------------
Certificates (other than the signature and countersignature of the Owner Trustee
on the Trust 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 the
Trust Agreement, of any other Basic Document or of the Trust Certificates (other
than the signature and the certificate of authentication of the Owner Trustee on
the Trust Certificates) or the Notes, or of any Mortgage Loan, Swap Agreement or
Pooled Certificate or related documents. The Owner Trustee shall at no time
have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage Loan, Swap Agreement or Pooled
Certificate, or for or with respect to the sufficiency of the Owner Trust Estate
or its ability to generate the payments to be distributed to Certificateholders
under the Trust Agreement or the Noteholders under the Indenture, including,
without limitation: the existence, condition and ownership of any property
securing a Mortgage Loan; the existence and enforceability of any insurance
thereon; the validity of the assignment of any Mortgage Loan to the Trust or of
any intervening assignment; the performance or enforcement of any Mortgage Loan,
Swap Agreement or Pooled Certificate; the compliance by the Depositor or the
Servicer with any warranty or representation made under any Basic Document or in
any related document or the accuracy of any such warranty or representation, or
any action of the Depositor, the Indenture Trustee or the Servicer or any
subservicer taken in the name of the Owner Trustee.
SECTION 7.07. Owner Trustee May Own Trust Certificates and Notes. The
-----------------------------------------------------
Owner Trustee in its individual or any other capacity may become the owner or
pledgee of Trust Certificates or Notes and may deal with the Depositor, the
Indenture Trustee, the Paying Agent and the Servicer in banking transactions
with the same rights as it would have if it were not Owner Trustee.
ARTICLE VIII
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Compensation of Owner Trustee
-----------------------------
SECTION 8.01. Owner Trustee's Fees and Expenses. The Owner Trustee shall
---------------------------------
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof among the Sponsor, the Depositor
and the Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed
by the Depositor for its other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder.
SECTION 8.02. Indemnification. The Sponsor shall be liable as primary
---------------
obligor for, and shall indemnify the Owner Trustee, the Paying Agent and their
successors, assigns, agents and servants (collectively, the "Indemnified
Parties") from and against, any and all liabilities, obligations, losses,
damages, taxes, claims, actions and suits, and any and all reasonable costs,
expenses and disbursements (including reasonable legal fees and expenses) of any
kind and nature whatsoever (collectively, "Expenses") which may at any time be
imposed on, incurred by, or asserted against the Owner Trustee, the Paying Agent
or any Indemnified Party in any way relating to or arising out of the 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 or the
Paying Agent hereunder, except only that the Sponsor shall not be liable for or
required to indemnify an Indemnified Party from and against Expenses arising or
resulting from any of the matters described in the third sentence of Section
7.01. The indemnities contained in this Section shall survive the resignation
or termination of the Owner Trustee or the Paying Agent or the termination of
the Trust Agreement. In any event of any claim, action or proceeding for which
indemnity will be sought pursuant to this Section, the Owner Trustee's or the
Paying Agent's, as applicable, choice of legal counsel shall be subject to the
approval of the Sponsor, which approval shall not be unreasonably withheld.
SECTION 8.03. Payments to the Owner Trustee. Any amounts paid to the
---------------------------------
Owner Trustee pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
ARTICLE IX
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Termination of Trust Agreement
------------------------------
SECTION 9.01. Termination of Trust Agreement. (a) The Trust Agreement
---------------------------------
(other than Article VIII) shall terminate and the Trust shall dissolve and be of
no further force or effect upon the final distribution by the Paying Agent of
all moneys or other property or proceeds of the Owner Trust Estate whether
following the exercise of a Collateral Purchase Option or otherwise and in any
case in accordance with the terms of the Indenture, the Sale and Servicing
Agreement and Article V. The bankruptcy, liquidation, dissolution, death or
incapacity of any Certificateholder shall not (x) operate to terminate the 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 Owner Trust Estate or (z) otherwise affect the rights, obligations and
liabilities of the parties hereto.
(b) Except as provided in Section 9.01(a), neither the Depositor nor
any Certificateholder shall be entitled to revoke or terminate the Trust or the
Trust Agreement.
(c) Notice of any dissolution of the Trust, specifying the Payment Date
upon which the Certificateholders shall surrender their Trust Certificates to
the Paying Agent for payment of the final distribution thereon and cancellation
thereof, shall be given by the Owner Trustee by letter to Certificateholders
mailed within five Business Days of receipt of notice of such dissolution from
the Paying Agent stating (i) the Payment Date upon or with respect to which
final payment of the Trust Certificates shall be made upon presentation and
surrender of the Trust Certificates at the office of the Paying Agent therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Payment Date is not applicable, payments being
made only upon presentation and surrender of the Trust Certificates at the
office of the Paying Agent therein specified. The Owner Trustee shall give such
notice to the Certificate Registrar (if other than the Owner Trustee) and the
Paying Agent at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Trust Certificates, the Paying Agent shall
cause to be distributed to Certificateholders amounts distributable on such
Payment Date pursuant to Section 5.02.
In the event that all of the Certificateholders shall not surrender their
Trust Certificates for cancellation within six months after the date specified
in the above mentioned written notice, the Owner Trustee shall give a second
written notice to the remaining Certificateholders to surrender their Trust
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Trust Certificates
shall not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Trust
Certificates, and the cost thereof shall be paid out of the funds and other
assets that shall remain subject to the Trust Agreement. Any funds remaining in
the Trust after exhaustion of such remedies shall be distributed by the Owner
Trustee to the Depositor. Certificateholders shall thereafter look solely to
the Depositor as general unsecured creditors.
(d) Upon the winding up of the Trust and payment of its obligations in
accordance with applicable law, 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 of the Business Trust
Statute and the Trust shall terminate.
ARTICLE X
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Successor Owner Trustees and Additional Owner Trustees
------------------------------------------------------
SECTION 10.01. Eligibility Requirements for Owner Trustee. The Owner
----------------------------------------------
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized to exercise 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 BBB from S&P and Baa2
from Xxxxx'x (or such lower rating as may be acceptable to S&P, Xxxxx'x and the
Note Insurer). If such corporation shall publish reports of condition at least
annually pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purpose of this Section, 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, the Owner Trustee shall resign immediately in
the manner and with the effect specified in Section 10.02.
SECTION 10.02. Resignation or Removal of Owner Trustee. The Owner Trustee
---------------------------------------
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Depositor. 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 one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 10.01 and shall fail to resign after written
request therefor by the 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. If the Depositor shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the Depositor
shall promptly appoint a successor Owner Trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the outgoing Owner
Trustee so removed and one copy to the successor Owner Trustee, and shall pay
all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to Section 10.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Depositor shall provide notice of such
resignation or removal of the Owner Trustee to the Note Insurer and each of the
Rating Agencies.
SECTION 10.03. Successor Owner Trustee. Any successor Owner Trustee
-------------------------
appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to
the Depositor and to its predecessor Owner Trustee an instrument accepting such
appointment under the Trust Agreement, and thereupon the resignation or removal
of the predecessor Owner Trustee shall become effective, and such successor
Owner Trustee, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
under the 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
moneys held by it under the Trust Agreement; and the Depositor and the
predecessor Owner Trustee shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties and
obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Depositor shall mail notice thereof to all Certificateholders,
the Indenture Trustee, the Noteholders, the Paying Agent, the Note Insurer, the
Swap Counterparty and the Rating Agencies. If the Depositor shall fail to mail
such notice within 10 days after acceptance of such appointment by the successor
Owner Trustee, the successor Owner Trustee shall cause such notice to be mailed
at the expense of the Depositor.
SECTION 10.04. 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 corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, 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 10.01 and,
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Note Insurer, the Paying Agent, the Swap Counterparty and
the Rating Agencies.
SECTION 10.05. Appointment of Co-Trustee or Separate Trustee.
--------------------------------------------------
Notwithstanding any other provisions of the 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 Depositor and the
Owner Trustee acting jointly shall have the power and shall execute and deliver
all instruments to appoint one or more Persons approved by the Depositor and
Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or separate trustees, of all or any part of the Owner Trust
Estate, and to vest in such Person, in such capacity, such title to the Trust or
any part thereof and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Depositor and the Owner
Trustee may consider necessary or desirable. If the Depositor shall not have
joined in such appointment within 15 days after the receipt by it of a request
so to do, the Owner Trustee alone shall have the power to make such appointment.
No co-trustee or separate trustee under the Trust Agreement shall be required to
meet the terms of eligibility as a successor Owner Trustee pursuant to Section
10.01 and no notice of the appointment of any co-trustee or separate trustee
shall be required pursuant to Section 10.03.
Each separate trustee and co-trustee shall, to the extent permitted by law,
be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Owner Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Owner Trustee;
(b) no trustee under the Trust Agreement shall be personally liable by
reason of any act or omission of any other trustee under the Trust Agreement;
and
(c) the Depositor and the Owner Trustee acting jointly 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 the 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 the Trust Agreement, specifically including every provision of the Trust
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to each of the Depositor and the
Servicer.
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 the
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.
ARTICLE XI
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Miscellaneous
-------------
SECTION 11.01. Supplements and Amendments. The Trust Agreement may be
----------------------------
amended by the Depositor and the Owner Trustee, with the written consent of the
Note Insurer, without the consent of any of the Sponsor, the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in the Trust Agreement or for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions in the Trust
Agreement or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that such action shall not, as evidenced
by an opinion of counsel, adversely affect in any material respect the interests
of any Noteholder or Certificateholder; provided, further, that no opinion of
counsel shall be required if the Person requesting such amendment shall deliver
to the Owner Trustee and the Note Insurer a letter from each Rating Agency to
the effect that such amendment, in and of itself, will not cause such Rating
Agency to reduce its "shadow rating" on the Notes rated by it.
The Trust Agreement may also be amended from time to time by the Depositor
and the Owner Trustee, with the written consent of the Note Insurer, with the
consent of the Holders of Notes evidencing not less than a majority of the Class
Principal Balance of the Notes and, to the extent affected thereby, the consent
of the Holders of Certificates evidencing not less than a majority of the
Certificate Balance, for the purpose of adding any provisions to, or changing in
any manner, or eliminating any of the provisions of, the Trust Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that no such amendment shall (a) increase or reduce in any
manner the amount of, or accelerate or delay the timing of, collections of
payments on Mortgage Loans or Pooled Certificates or pursuant to the Swap
Agreements or distributions that shall be required to be made for the benefit of
the Noteholders or the Certificateholders or (b) reduce the aforesaid percentage
of the Class Principal Balance of the Notes and the Certificate Balance required
to consent to any such amendment, without the consent of the holders of all the
outstanding Notes and Certificates.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder, the Indenture Trustee and each of the Rating
Agencies.
It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Certificateholders provided for in the 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.
Promptly after the execution of any amendment to the Certificate of Trust,
the Owner Trustee shall cause the filing of such amendment with the Secretary of
State.
Prior to the execution of any amendment to the Trust Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an opinion of counsel stating that the execution of such amendment is
authorized or permitted by the Trust Agreement. The Owner Trustee may, but
shall not be obligated to, enter into any such amendment that affects the Owner
Trustee's own rights, duties or immunities under the Trust Agreement or
otherwise.
Notwithstanding anything herein to the contrary, no provision of this
Agreement affecting the rights, duties and responsibilities of the Paying Agent
may be amended without the consent of the Paying Agent, such consent not to be
unreasonably withheld.
SECTION 11.02. No Legal Title to Owner Trust Estate in Certificateholders.
----------------------------------------------------------
The Certificateholders shall not have legal title to any part of the Owner
Trust Estate. The Certificateholders shall be entitled to receive distributions
with respect to their undivided ownership interest therein only in accordance
with Articles V and IX. No transfer, by operation of law or otherwise, of any
right, title or interest of the Certificateholders to and in their ownership
interest in the Owner Trust Estate shall operate to terminate the Trust
Agreement or the trusts under the Trust Agreement or entitle any transferee to
an accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.03. Limitations on Rights of Others. The provisions of the
----------------------------------
Trust Agreement are solely for the benefit of the Owner Trustee, the Depositor,
the Note Insurer, the Certificateholders, and, to the extent expressly provided
herein, the Indenture Trustee and the Noteholders, and nothing in the Trust
Agreement, whether express or implied, shall be construed to give to any other
Person any legal or equitable right, remedy or claim in the Owner Trust Estate
or under or in respect of the Trust Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.04. Notices. (a) Unless otherwise expressly specified or
-------
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three Business Days after
mailing if mailed by certified mail, postage prepaid (except that notice to the
Owner Trustee shall be deemed given only upon actual receipt by the Owner
Trustee), if to the Owner Trustee, addressed to its Corporate Trust Office; if
to the Depositor, addressed to Xxxxxxxxx Mortgage Funding Corporation, 00000 Xxx
Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxx, Chief Financial
Officer; if to the Sponsor, addressed to Xxxxxxxxx Mortgage Asset Corporation,
000 Xxxx Xxxxx Xxxxxx, Xxxxx 000, Xxxxx Xx, Xxx Xxxxxx, 00000, Attention: Xxxxx
Xxxxxxxxx, President, 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
Certificateholder as shown in the Certificate Register. Any notice so mailed
within the time prescribed in the Trust Agreement shall be conclusively presumed
to have been duly given, whether or not the Certificateholder receives such
notice.
SECTION 11.05. Severability. Any provision of the 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 11.06. Separate Counterparts. The 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 11.07. Successors and Assigns. All covenants and agreements
------------------------
contained herein shall be binding upon, and inure to the benefit of, each of the
Sponsor, 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 11.08. No Petition. (a) Neither the Sponsor nor the Depositor
------------
will, prior to the date which is one year and one day after the termination of
the Indenture, institute against the Trust any bankruptcy proceedings under any
United States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Trust Certificates, the Notes, the Trust Agreement
or any of the other Basic Documents.
(b) The Owner Trustee, by entering into the Trust Agreement, each
Certificateholder, by accepting a Trust Certificate, and the Indenture Trustee
and each Noteholder, by accepting the benefits of the Trust Agreement, hereby
covenant and agree that they will not, prior to the date which is one year and
one day after the termination of the Indenture, institute against the Depositor
or the Trust, or join in any institution against the Depositor or the Trust of,
any bankruptcy proceedings under any United States federal or state bankruptcy
or similar law in connection with any obligations relating to the Trust
Certificates, the Notes, the Trust Agreement or any of the other Basic
Documents.
SECTION 11.09. No Recourse. Each Certificateholder by accepting a Trust
------------
Certificate acknowledges that such Certificateholder's Trust Certificates
represent beneficial interests in the Trust only and do not represent interests
in or obligations of the Depositor, the Servicer, 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 the Trust Agreement, the Trust Certificates or the Basic
Documents. Except as expressly provided in the Basic Documents, neither the
Depositor, the Servicer, the Indenture Trustee nor the Owner Trustee in their
respective individual capacities, nor any of their respective Affiliates,
partners, beneficiaries, agents, officers, directors, employees or successors or
assigns, shall be personally liable for, nor shall recourse be had to any of
them for, the distribution of any amount with respect to the Trust Certificates,
or the Trust's performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Trust Certificates or the Trust
Agreement, it being expressly understood that said covenants and obligations
have been made solely by the Trust. Each Certificateholder by the acceptance of
a Trust Certificate (or a beneficial interest therein) agrees that, except as
expressly provided in the Basic Documents, in the case of nonpayment of any
amounts with respect to such Trust Certificate, it shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom.
SECTION 11.10. Headings. The headings of the various Articles and
--------
Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
SECTION 11.11. GOVERNING LAW. THE 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 UNDER THE TRUST AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 11.12. Grant of Certificateholder Rights to Note Insurer. The
-----------------------------------------------------
rights of the Note Insurer to direct certain actions and consent to certain
actions of the Certificateholders hereunder will terminate at such time as the
Class Principal Balance of the Notes has been reduced to zero and the Note
Insurer has been reimbursed for any amounts owed under the Insurance Policy and
the Insurance Agreement and the Note Insurer has no further obligation under the
Insurance Policy.
SECTION 11.13. Third-Party Beneficiary. The Note Insurer is an intended
------------------------
third-party beneficiary of the Trust Agreement, and the Trust Agreement shall be
binding upon and inure to the benefit of the Note Insurer. Without limiting the
generality of the foregoing, all covenants and agreements in the Trust Agreement
that expressly confer rights upon the Note Insurer shall be for the benefit of
and run directly to the Note Insurer, and the Note Insurer shall be entitled to
rely on and enforce such covenants to the same extent as if it were a party to
the Trust Agreement. Provided, however, nothing in this Section 11.13 shall be
construed to impose a fiduciary obligation of the Owner Trustee to the Note
Insurer.
SECTION 11.14. The Note Insurer. Any right conferred to the Note Insurer
----------------
hereunder shall be suspended during any period in which the Note Insurer is in
default in its payment obligations under either of the Insurance Policies. At
such time as the Notes are no longer outstanding, and no amounts owed to the
Note Insurer remain unpaid, the Note Insurer's rights hereunder shall terminate.
* * * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
XXXXXXXXX MORTGAGE FUNDING CORPORATION,
as Depositor
By: ______________________________________
Name:
Title:
XXXXXXXXX MORTGAGE ASSET CORPORATION, as Sponsor
By: ______________________________________
Name:
Title:
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as
Owner Trustee and as Certificate Registrar
By: ______________________________________
Name:
Title:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A. hereby accepts the appointment as
Paying Agent pursuant to Section 3.09 hereof and accepts
the obligations and duties provided under
Sections 5.05 and 6.07 hereof.
By: ______________________________________
Name:
Title:
We hereby agree to purchase the Trust Certificates in the amount and for
the price set forth in Section 3.02(b) hereof
TMA ACCEPTANCE CORP.
By: ______________________________________
Name:
Title:
Appendix A
Definitions
See Exhibit A of the Sale and Servicing Agreement.
EXHIBIT A
FORM OF TRUST CERTIFICATE
-------------------------
THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "ACT"). THE HOLDER HEREOF, BY PURCHASING THIS TRUST
CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE STATE SECURITIES
LAWS AND TO A PERSON WHO HAS FURNISHED TO THE OWNER TRUSTEE (A) AN INVESTMENT
LETTER SATISFACTORY TO THE OWNER TRUSTEE TO THE EFFECT THAT SUCH PURCHASER IS AN
INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE 501(A)(1)-(3) UNDER
THE ACT AND (B) IF REQUIRED, AN OPINION OF COUNSEL SATISFACTORY TO THE OWNER
TRUSTEE.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR XXXXX PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF ANY SUCH
PLAN'S ARRANGEMENTS OR ACCOUNT'S INVESTMENT IN SUCH ENTITIES. FURTHER, THIS
TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN THE
MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
IF THE CERTIFICATEHOLDER COLLATERAL PURCHASE OPTION OR THE NOTE PURCHASE OPTION
ARE OUTSTANDING, THIS TRUST CERTIFICATE MUST REPRESENT ALL OUTSTANDING TRUST
CERTIFICATES AND SHALL BE HELD BY ONLY ONE HOLDER.
THE HOLDER OF THIS TRUST CERTIFICATE FURTHER UNDERSTANDS AND AGREES THAT THE
NUMBER OF BENEFICIAL OWNERS OF ALL TRUST CERTIFICATES MAY NOT EXCEED 3 IN
NUMBER; THAT TRANSFERS OF THE TRUST CERTIFICATES WILL BE RESTRICTED ACCORDINGLY;
AND THAT THE HOLDER HEREOF WILL NOTIFY THE OWNER TRUSTEE IF THE NUMBER OF
BENEFICIAL OWNERS OF THIS TRUST CERTIFICATE WILL CHANGE AS PROVIDED IN THE TRUST
AGREEMENT.
THIS TRUST CERTIFICATE IS NOT GUARANTEED OR INSURED BY AMBAC OR ANY GOVERNMENTAL
AGENCY.
NUMBER: _________ DENOMINATION:___________
INITIAL CERTIFICATE BALANCE: $32,362,457
TMA MORTGAGE FUNDING TRUST I
ASSET-BACKED TRUST CERTIFICATE
evidencing a beneficial ownership interest in the Trust, as defined below, the
property of which includes (i) a pool of adjustable rate mortgage loans and
adjustable rate mortgage loans with an original fixed rate period (collectively,
the "Mortgage Loans"), (ii) ten interest rate swap agreements between the Trust
and Xxxxxxx Xxxxx Capital Services, Inc. (the "Swap Agreements"), and (iii)100%
if the Class A-1 and Class A-2 Pass-through Certificates from CS First Boston
Mortgage Securities Corporation, Pass-through Certificates, Series 1993-B
(collectively, the "Pooled Certificates") caused to be sold to the Trust by
Xxxxxxxxx Mortgage Funding Corporation.
(THIS TRUST CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF
XXXXXXXXX MORTGAGE FUNDING CORPORATION, THE SERVICER (AS DEFINED BELOW) OR THE
OWNER TRUSTEE (AS DEFINED BELOW) OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT
TO THE EXTENT DESCRIBED BELOW.)
THIS CERTIFIES THAT ___________________________________________________ is
the registered owner of the Percentage Interest evidenced hereby in the
nonassessable, fully paid, beneficial ownership interest in TMA MORTGAGE FUNDING
TRUST I (the "Trust") formed by Xxxxxxxxx Mortgage Funding Corporation, a
Delaware corporation.
The Trust was created pursuant to a Trust Agreement, dated as of December
1, 1998 (the "Trust Agreement"), among Xxxxxxxxx Mortgage Funding Corporation,
as depositor (the "Depositor"), Xxxxxxxxx Mortgage Asset Corporation, as Sponsor
(the "Sponsor") and Wilmington Trust Company, as owner trustee (the "Owner
Trustee"), a summary of certain of the pertinent provisions of which is set
forth below. To the extent not otherwise defined herein, the capitalized terms
used herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of a duly authorized issue of Asset-Backed Trust
Certificates (herein called the "Trust Certificates"). Also issued under the
Indenture dated as of December 1, 1998 between the Trust and Bankers Trust
Company of California, N.A., as indenture trustee, are a Series of Notes
designated as Collateralized Asset-Backed Notes, Series 1998-1 (the "Notes").
This Trust 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 Trust Certificate by virtue of its acceptance hereof assents and by which
such holder is bound. The property of the Trust consists of the Mortgage Loans
and the Pooled Certificates; the collections in respect of the Mortgage Loans
and the Pooled Certificates received after the applicable Cut-off Date; property
that secured a Mortgage Loan which has been acquired by foreclosure or deed in
lieu of foreclosure and any REO Proceeds; the Note Insurance Policy and
collections thereunder; the Swap Agreements and collections thereunder net of
payments required to be made by the Trust; rights under certain Insurance
Policies relating to the Mortgage Loans; the Reserve Account; and certain other
assets and rights as provided under the Trust Agreement and the Sale and
Servicing Agreement.
Under the Trust Agreement, 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 December 1998, to the Person in whose
name this Trust Certificate is registered at the close of business on the last
day of the calendar month immediately preceding the Payment Date (the "Record
Date"), interest on the Certificate Balance of this Trust Certificate at a per
annum rate equal to the lesser of (i) 7.00% per annum and (ii) the result of
dividing the Certificate Interest Distribution Amount by the then Certificate
Balance of all of the Certificates, expressed as a per annum rate, and principal
in each case to the extent of such Certificateholder's Percentage Interest in
the amount to be distributed to Certificateholders on such Payment Date pursuant
to the terms of the Sale and Servicing Agreement. The holder of this
Certificate may also receive Additional Certificate Interest to the extent
provided in the Sale and Servicing Agreement.
The holder of this Trust Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Trust Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement and the Indenture.
It is the intent of the Depositor and the Certificateholders that, for
purposes of federal income taxes, the Trust will be treated as a grantor trust.
The Certificateholders, by acceptance of a Trust Certificate, agree to treat,
and to take no action inconsistent with the treatment of, the Trust and the
Trust Certificates for such tax purposes as just described.
Each Certificateholder, by its acceptance of a Trust Certificate, covenants
and agrees that such Certificateholder, will not prior to the date which is one
year and one day after the termination of the Indenture, institute against the
Trust or the Depositor, or join in any institution against the Trust or the
Depositor 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 Trust Certificates, the Notes, the Trust Agreement or any of the other Basic
Documents.
Distributions on this Trust 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 Trust 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 Trust Certificate will
be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Trust Certificate
at the office or agency maintained for that purpose by the Owner Trustee in the
Borough of Manhattan, The City of New York.
The holder of this Certificate may have the right to the extent provided in
the Trust Agreement, the Indenture and the Sale and Servicing Agreement to
exercise options to purchase (i) among other items the Mortgage Loans and the
Pooled Certificates or (ii) the Notes.
Reference is hereby made to the further provisions of this Trust
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, by manual signature, this Trust
Certificate shall not entitle the holder hereof to any benefit under the Trust
Agreement or the Sale and Servicing Agreement or be valid for any purpose.
THIS TRUST 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.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Trust Certificate to be duly executed.
Date:
TMA MORTGAGE FUNDING TRUST I
By: WILMINGTON TRUST COMPANY,
solely as Owner Trustee and not in its individual
capacity
By:_________________________________________________
Authorized Signatory
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates of TMA Mortgage Funding Trust I
referred to in the within-mentioned Trust Agreement.
Date:
WILMINGTON TRUST COMPANY,
solely as Owner Trustee and not in its individual
capacity
By:_________________________________________________
Authorized Signatory
[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an interest
in, the Sponsor, the Depositor, the Servicer, 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, the Indenture or the other Basic Documents. In addition, this
Trust 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 Mortgage Loans, the Pooled Certificates, the Swap
Agreements (and certain other amounts), all as more specifically set forth in
the Trust Agreement and in the Sale and Servicing Agreement. A copy of each of
the Sale and Servicing Agreement and 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, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the rights of the Certificateholders under the Trust Agreement at
any time by the Depositor and the Owner Trustee with the consent of the Note
Insurer and the holders of the Trust Certificates evidencing not less than a
majority of the outstanding Certificate Balances and of the holders of the Notes
evidencing not less than a majority of the outstanding Class Principal Balance
of the Notes, each voting as a class. Any such consent by the holder of this
Trust Certificate shall be conclusive and binding on such holder and on all
future holders of this Trust Certificate and of any Trust Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof, whether or
not notation of such consent is made upon this Trust Certificate. The Trust
Agreement also permits the amendment thereof, in certain limited circumstances,
without the consent of the holders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Trust Certificate is registerable in the
Certificate Register upon surrender of this Trust Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Owner Trustee in the Borough of Manhattan, The City of New York,
accompanied by a written instrument of transfer in form satisfactory to the
Owner Trustee and the Certificate Registrar duly executed by the holder hereof
or such holder's attorney duly authorized in writing, and thereupon one or more
new Trust Certificates of authorized denominations evidencing the same aggregate
interest in the Trust will be issued to the designated transferee. The initial
Certificate Registrar appointed under the Trust Agreement is the Owner Trustee.
The Trust Certificates are issuable only as registered Trust Certificates
without coupons in denominations of $100,000 and integral multiples of $1,000 in
excess thereof; PROVIDED, HOWEVER, that one Trust Certificate may be issued in a
denomination that represents any residual amount of the Initial Certificate
Balance. As provided in the Trust Agreement and subject to certain limitations
therein set forth, Trust Certificates are exchangeable for new Trust
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 Registrar and any agent of the Owner
Trustee 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 Registrar or any such agent shall be affected by
any notice to the contrary.
This Trust Certificate may not be transferred directly or indirectly to (1)
employee benefit plans, retirement arrangements, individual retirement accounts
or Xxxxx plans subject to either Title I of the Employee Retirement Income
Security Act of 1974, as amended, or Section 4975 of the Internal Revenue Code
of 1986, as amended, or (2) entities (including insurance company general
accounts) whose underlying assets include plan assets by reason of the
investment by such plans, arrangements or accounts in such entities. By
accepting and holding this Trust Certificate, the Holder hereof shall be deemed
to have represented and warranted that it is not any of the foregoing entities.
This Trust Certificate may not be transferred to any person who is not
a U.S. Person, as such term is defined in Section 7701(a)(30) of the Internal
Revenue Code, as amended.
No transfer of a Trust Certificate shall be permitted, and no such
transfer shall be registered by the Certificate Registrar or be effective
hereunder, if the number of beneficial owners of Trust Certificates exceeds 99.
For purposes of determining the number of beneficial owners, the Certificate
Registrar may treat the number of beneficial owners as equal to the number of
registered holders, provided that each holder represents that it is the
beneficial owner and (i) is an individual or a United States corporation (other
than an S corporation) or (ii) no principal purpose of the use of the entity to
hold the Trust Certificate is to permit the Trust to satisfy the 100 partners
limitation of Treasury regulation 1.7704-1(h)(3).
Each purchaser of the Trust Certificates shall be required, prior to
purchasing a Trust Certificate, to execute the Purchaser's Representation and
Warranty Letter in the form attached to the Trust Agreement as Exhibit C.
The obligations and responsibilities created by the Trust Agreement shall
terminate and the Trust created thereby shall dissolve upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement and the Sale and Servicing Agreement and the disposition of all
property held as part of the Trust. In addition, Bear, Xxxxxxx & Co. Inc.
("Bear Xxxxxxx") has the option to purchase, among other items, the Mortgage
Loans and the Pooled Certificates, at a price specified in the Indenture. The
exercise of such option will effect repayment of the Notes in full and early
retirement of the Trust Certificates. It is unlikely that in such event, the
Trust Certificates will receive any proceeds. However, the Holder of 100% of
the Trust Certificates may choose to exercise its Certificateholder Collateral
Purchase Option and purchase the Mortgage Loans and Pooled Certificates, in lieu
of Bear Xxxxxxx, for the purchase price specified in the Indenture.
This Trust 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.
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 Trust Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
--------------------------------------------------------------------------------
to transfer said Trust 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 Trust 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.
EXHIBIT B
CERTIFICATE OF TRUST OF
TMA MORTGAGE FUNDING TRUST I
----------------------------
This Certificate of Trust of TMA MORTGAGE FUNDING TRUST I (the "Trust"), is
being duly executed and filed by Wilmington Trust Company, a Delaware bank and
trust company, as trustee, to form a business trust under the Delaware Business
Trust Act (12 Del. Code, 3801 et seq.).
----------
1. Name. The name of the business trust formed hereby is TMA MORTGAGE
----
FUNDING TRUST I.
2. Delaware Trustee. The name and business address of the trustee of
-----------------
the Trust in the State of Delaware is Wilmington Trust Company, Xxxxxx Square
North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention: TMA
MORTGAGE FUNDING TRUST I.
3. Effective Time. This Certificate of Trust shall be effective upon
---------------
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust.
Wilmington Trust Company,
not in its individual capacity but solely as
owner trustee of the Trust.
By: _____________________________
Name:
Title:
EXHIBIT C
[Form of Purchaser's Representation and Warranty Letter]
Xxxxxxxxx Mortgage Funding Corporation
18881 on Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
TMA Mortgage Funding Trust I
c/o Wilmington Trust Company, as
Owner Trustee
Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: TMA Mortgage Funding Trust I - Trust Certificates
--------------------------------------------------------
Ladies and Gentlemen:
In connection with our proposed purchase of Trust Certificates (the
"Certificates") issued under the Trust Agreement dated as of December 1, 1998
(the "Agreement"), among Xxxxxxxxx Mortgage Funding Corporation, as Depositor
(the "Depositor"), Xxxxxxxxx Mortgage Assets Corporation, as Sponsor, and
Wilmington Trust Company, as Owner Trustee, the undersigned (the "Purchaser")
represents, warrants and agrees that:
1. It is an institutional "accredited investor" as defined in Rule
501(a)(1)-(3) or (7) under the Securities Act and is acquiring the Certificates
for its own institutional account or for the account of an institutional
accredited investor.
2. It is not (i) an employee benefit plan, retirement arrangement,
individual retirement account or Xxxxx plan subject to either Title I of the
Employee Retirement Income Security Act of 1974, as amended, or Section 4975 of
the Internal Revenue Code of 1986, as amended, or (2) an entity (including an
insurance company general account) whose underlying assets include plan assets
by reason of the investment by such plans, arrangements or accounts in any such
entity.
3. It is a U.S. Person as defined in Section 7701(a)(30) of the Code.
4. It has such knowledge and experience in evaluating business and
financial matters so that it is capable of evaluating the merits and risks of an
investment in the Certificates. It understands the full nature and risks of an
investment in the Certificates and based upon its present and projected net
income and net worth, it believes that it can bear the economic risk of an
immediate or future loss of its entire investment in the Certificates.
5. It understands that the Certificates will be offered in a
transaction not involving any public offering within the meaning of the
Securities Act, and that, if in the future it decides to resell, pledge or
otherwise transfer any Certificates, such Certificates may be resold, pledged or
transferred only (a) to a person who the seller reasonably believes is an
institutional "accredited investor" as defined in Rule 501(a)(1)-(3) or (7)
under the Securities Act that purchases for its own account or for the account
of another institutional accredited investor or (b) pursuant to an effective
registration statement under the Securities Act.
6. It understands that each Certificate will bear legends substantially
to the following effect:
"THIS TRUST CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT") OR STATE SECURITIES LAWS. THE HOLDER HEREOF, BY
PURCHASING THIS TRUST CERTIFICATE, AGREES THAT THIS TRUST CERTIFICATE MAY BE
RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY IN ACCORDANCE WITH ANY APPLICABLE
STATE SECURITIES LAWS AND TO A PERSON WHO HAS FURNISHED TO THE OWNER TRUSTEE (A)
AN INVESTMENT LETTER SATISFACTORY TO THE TRUSTEE TO THE EFFECT THAT SUCH
PURCHASER IS AN INSTITUTIONAL ACCREDITED INVESTOR WITHIN THE MEANING OF RULE
501(A)(1)-(3) OR (7) UNDER THE ACT AND (B) IF REQUIRED, AN OPINION OF COUNSEL
SATISFACTORY TO THE OWNER TRUSTEE.
THIS TRUST CERTIFICATE MAY NOT BE TRANSFERRED DIRECTLY OR INDIRECTLY TO (1)
EMPLOYEE BENEFIT PLANS, RETIREMENT ARRANGEMENTS, INDIVIDUAL RETIREMENT ACCOUNTS
OR XXXXX PLANS SUBJECT TO EITHER TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR SECTION 4975 OF THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED, OR (2) ENTITIES (INCLUDING INSURANCE COMPANY GENERAL
ACCOUNTS) WHOSE UNDERLYING ASSETS INCLUDE PLAN ASSETS BY REASON OF THE
INVESTMENT BY SUCH PLANS, ARRANGEMENTS OR ACCOUNTS IN SUCH ENTITIES. FURTHER,
THIS TRUST CERTIFICATE MAY BE TRANSFERRED ONLY TO A UNITED STATES PERSON WITHIN
THE MEANING OF SECTION 7701(A)(30) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
IF THE CERTIFICATEHOLDER COLLATERAL PURCHASE OPTION OR THE NOTE PURCHASE OPTION
ARE OUTSTANDING, THIS TRUST CERTIFICATE MUST REPRESENT ALL OUTSTANDING TRUST
CERTIFICATES AND SHALL BE HELD BY ONLY ONE HOLDER.
THE HOLDER OF THIS TRUST CERTIFICATE FURTHER UNDERSTANDS AND AGREES THAT THE
NUMBER OF BENEFICIAL OWNERS OF ALL TRUST CERTIFICATES MAY NOT EXCEED 3 IN
NUMBER; THAT TRANSFERS OF THE TRUST CERTIFICATES WILL BE RESTRICTED ACCORDINGLY;
AND THAT THE HOLDER HEREOF WILL NOTIFY THE OWNER TRUSTEE IF THE NUMBER OF
BENEFICIAL OWNERS OF THIS TRUST CERTIFICATE WILL CHANGE AS PROVIDED IN THE TRUST
AGREEMENT."
7. It is acquiring the Certificates for its own account and not with a
view to the public offering thereof in violation of the Securities Act (subject,
nevertheless, to the understanding that disposition of its property shall at all
times be and remain within its control).
8. It has been furnished with all information regarding the Trust and
Certificates which it has requested from the Trust and the Depositor.
9. Neither it nor anyone acting on its behalf has offered, transferred,
pledged, sold or otherwise disposed of any Certificate, any interest in any
Certificate or any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of any Certificate, any interest
in any Certificate or any other similar security from, or otherwise approached
or negotiated with respect to any Certificate, any interest in any Certificate
or any other similar security with, any person in any manner or made any general
solicitation by means of general advertising or in any other manner, which would
constitute a distribution of the Certificates under the Securities Act or which
would require registration pursuant to the Securities Act nor will it act, nor
has it authorized or will authorize any person to act, in such manner with
respect to any Certificate.
10. If the purchase to which this letter relates applies to less than
all of the Certificates, the Purchaser acknowledges that the Certificateholder
Collateral Purchase Option and the Note Purchase Option are no longer
outstanding.
11. For purposes of the Investment Company Act of 1940, as amended, the
total number of beneficial owners of the Trust Certificates it is purchasing is
________________.
12. The Purchaser is a beneficial owner of the Trust Certificates and
either (i) is an individual or a United States corporation (other than an S
corporation) or (ii) no principal purpose of the use of the entity to hold the
Trust Certificate is to permit the Trust to satisfy the 100 partners limitation
of Treasury regulation 1.7704-1(h)(3).
Dated:____________
Very truly yours,
_____________________________
NAME OF PURCHASER
By: __________________________
Name:________________________
Title:_________________________
NOTE: To be executed by an
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executive officer
