EXHIBIT 4.1
EXECUTION
AMERICAN RESIDENTIAL EAGLE, INC., as Depositor,
FIRST UNION NATIONAL BANK, as Trustee
and
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Master Servicer
---------------------------
TRUST AGREEMENT
Dated as of June 1, 1998
---------------------------
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
Mortgage Backed Callable Certificates, Series 1998-1
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I.
DEFINITIONS
1.01. Definitions..........................................................2
1.02. Calculations Respecting Accrued Interest............................16
ARTICLE II.
DECLARATION OF TRUST; CONVEYANCE
OF THE UNDERLYING BOND; ISSUANCE OF CERTIFICATES
2.01. Conveyance of the Underlying Bond...................................17
2.02. Issuance of Certificates............................................17
ARTICLE III.
THE CERTIFICATES
3.01. The Certificates....................................................17
3.02. Registration........................................................18
3.03. Transfer and Exchange of Certificates...............................18
3.04. Cancellation of Certificates........................................21
3.05. Replacement of Certificates.........................................21
3.06. Persons Deemed Owners...............................................21
3.07. Temporary Certificates..............................................22
3.08. Appointment of Paying Agent.........................................22
3.09. Book-Entry Certificates.............................................22
ARTICLE IV.
ADMINISTRATION OF THE TRUST FUND
4.01. [Reserved]..........................................................24
4.02. [Reserved]..........................................................24
4.03. Reports to Certificateholders.......................................24
4.04. Certificate Account.................................................27
4.05. Determination of LIBOR..............................................27
4.06. [Reserved]..........................................................29
ARTICLE V.
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
5.01. Distributions Generally.............................................29
5.02. Distributions from the Certificate Account..........................29
5.03. Allocation of Losses................................................32
5.04. [Reserved]..........................................................33
5.05. [Reserved]..........................................................33
5.06. Reserve Fund........................................................33
ARTICLE VI.
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
6.01. Events of Default...................................................34
6.02. Acceleration of Maturity............................................35
6.03. Control by Certificateholders.......................................35
6.04. Waiver of Past Defaults.............................................35
6.05. Undertaking for Costs...............................................35
6.06. Sale of Trust Estate................................................36
6.07. Duties of Trustee...................................................36
6.08. Certain Matters Affecting the Trustee...............................37
6.09. Trustee Not Liable for Certificates.................................38
6.10. Trustee May Own Certificates........................................38
6.11. Eligibility Requirements for Trustee................................38
6.12. Resignation and Removal of Trustee..................................38
6.13. Successor Trustee...................................................39
6.14. Merger or Consolidation of Trustee..................................40
6.15. [Reserved] .........................................................40
6.16. Authenticating Agents...............................................40
6.17. Indemnification of Trustee..........................................40
6.18. Fees and Expenses of Trustee........................................41
6.19. Collection of Monies; Remedies......................................41
6.20. Limitation of Liability.............................................41
6.21. Trustee May Enforce Claims Without Possession of Certificates.......41
6.22. Waiver of Bond Requirement..........................................42
6.23. Waiver of Inventory, Accounting and Appraisal Requirement...........42
ARTICLE VII.
PURCHASE AND TERMINATION OF THE TRUST FUND; PURCHASE OF CERTIFICATES
7.01. Termination of Trust Fund Upon Maturity or
Redemption of the Underlying Bond...................................42
7.02. Special Purchase of Certificates....................................42
7.03. Procedure Upon Termination of Trust Fund............................43
ARTICLE VIII.
RIGHTS OF CERTIFICATEHOLDERS
8.01. Limitation on Rights of Holders.....................................44
8.02. Access to List of Holders...........................................45
8.03. Acts of Holders of Certificates.....................................45
ARTICLE IX.
[RESERVED]
ARTICLE X.
FASIT ADMINISTRATION
10.01. FASIT Administration................................................46
10.02. Compliance with FASIT Provisions; Further Assurances................49
ARTICLE XI.
MISCELLANEOUS PROVISIONS
11.01. Binding Nature of Agreement; Assignment.............................49
11.02. Entire Agreement....................................................49
11.03. Amendment...........................................................49
11.04. Voting Rights.......................................................50
11.05. Provision of Information............................................51
11.06. Governing Law.......................................................51
11.07. Notices.............................................................51
11.08. Severability of Provisions..........................................51
11.09. Indulgences; No Waivers.............................................51
11.10. Headings Not To Affect Interpretation...............................52
11.11. Benefits of Agreement...............................................52
11.12. Special Notices to the Rating Agencies..............................52
11.13. Counterparts........................................................53
ATTACHMENTS
Exhibit A Forms of Certificates
Exhibit B-1 [Reserved]
Exhibit B-2 [Reserved]
Exhibit B-3 [Reserved]
Exhibit B-4 [Reserved]
Exhibit C [Reserved]
Exhibit D-l Class O Certificate Transfer Affidavit (Transferee)
Exhibit D-2 Class O Certificate Transfer Affidavit (Transferor)
Exhibit E [Reserved]
Exhibit F Form of Rule 144A Transfer Certificate
Exhibit G Form of Purchaser's Letter for Institutional Accredited Investors
Exhibit H Form of ERISA Transfer Affidavit
Exhibit I Form of Certificateholder Distribution Summary
Exhibit J [Reserved]
Exhibit K Special Servicing Compensation Agreement
This TRUST AGREEMENT, dated as of June 1, 1998 (the "Agreement"), is by
and between AMERICAN RESIDENTIAL EAGLE, INC., a Delaware corporation, as
depositor (the "Depositor"), FIRST UNION NATIONAL BANK, a national banking
association with its main office in Charlotte, North Carolina, as trustee (the
"Trustee") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as Master Servicer
(solely for the purposes of Article IV and Article X hereof).
PRELIMINARY STATEMENT
(I) The Depositor has acquired the Underlying Bond from American
Residential Eagle Mortgage Bond Trust 0000-0 (xxx "Xxxx Xxxxxx"), and at the
Closing Date is the owner of the Underlying Bond and other property being
conveyed by it to the Trustee for inclusion in the Trust Fund. On the Closing
Date, the Depositor will acquire the Certificates from the Trust Fund, as
consideration for its transfer to the Trust Fund of the Underlying Bond and the
other property constituting the Trust Fund. The Depositor has duly authorized
the execution and delivery of this Agreement to provide for the conveyance to
the Trustee of the Underlying Bond and the other property constituting the Trust
Fund. All covenants and agreements made by the Depositor and the Trustee herein
with respect to the Underlying Bond and the other property constituting the
Trust Fund are for the benefit of the Holders from time to time of the
Certificates. The Trustee is accepting the Trust Fund created hereby for good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged.
(II) The Depositor and the Trustee intend that the Trust Fund be
treated as a FASIT for federal income tax purposes and an election of FASIT
status will be made with respect to the Trust Fund. The Class A-1, Class A-2,
Class M-1, Class M-2, Class B and Class X Certificates shall be "Regular
Interests" in the FASIT. The Class O Certificate shall be the sole class of
"Ownership Interest" in the FASIT.
(III) The following table sets forth (or describes) the Class
designation, Certificate Interest Rate, initial Class Certificate Principal
Amount and the minimum denomination for each Class of Certificates comprising
the interests in the Trust Fund created hereunder.
Class Designation Certificate Interest Rate Initial Certificate Minimum
Principal Amount Denominations
Class A-1 (1) $143,970,000.00 $100,000
Class A-2 (2) 232,093,000.00 100,000
Class M-1 (3) 46,029,000.00 100,000
Class M-2 (4) 17,365,000.00 250,000
Class B (5) 17,365,000.00 250,000
Class X (6) (6) (7)
Class O (6) (6) (7)
---------------------------
(1) The Certificate Interest Rate with respect to any Distribution Date for
the Class A-1 Certificates is a per annum rate equal to the least of
(i) the LIBOR plus 0.09% (the "Class A-1 Spread"), (ii) 9.50% per annum
and (iii) the Bond Interest Rate. On each Bond Distribution Date after
which the Bond Principal Balance is less than 35% of the initial Bond
Principal Balance, the Class A-1 Spread with respect to each succeeding
Distribution Date will be increased to 0.18%. The initial Certificate
Interest Rate of the Class A-1 Certificates will be 5.75%.
(2) The Certificate Interest Rate with respect to any Distribution Date for
the Class A-2 Certificates is a per annum rate equal to the least of
(i) LIBOR plus 0.21% (the "Class A-2 Spread"), (ii) 9.50% per annum and
(iii) the Bond Interest Rate. On each Bond Distribution Date after
which the Bond Principal Balance is less than 35% of the initial Bond
Principal Balance, the Class A-2 Spread with respect to each succeeding
Distribution Date will be increased to 0.42%. The initial Certificate
Interest Rate of the Class A-2 Certificates will be 5.87%.
(3) The Certificate Interest Rate with respect to any Distribution Date for
the Class M-1 Certificates is a per annum rate equal to the least of
(i) LIBOR plus 0.50% (the "Class M-1 Spread"), (ii) 9.50% per annum and
(iii) the Net Funds Cap. On each Bond Distribution Date after which the
Bond Principal Balance is less than 35% of the initial Bond Principal
Balance, the Class M-1 Spread with respect to each succeeding
Distribution Date will be increased to 1.00%. The initial Certificate
Interest Rate of the Class M-1 Certificates will be 6.16%.
(4) The Certificate Interest Rate with respect to any Distribution Date for
the Class M-2 Certificates is a per annum rate equal to the least of
(i) LIBOR plus 0.70% (the "Class M-2 Spread"), (ii) 9.50% and (iii) the
Net Funds Cap. On each Bond Distribution Date after which the Bond
Principal Balance is less than 35% of the initial Bond Principal
Balance, the Class M-2 Spread with respect to each succeeding
Distribution Date will be increased to 1.20%. The initial Certificate
Interest Rate of the Class M-2 Certificates is 6.36%.
(5) The Certificate Interest Rate with respect to any Distribution Date for
the Class B Certificates is a per annum rate equal to the least of (i)
LIBOR plus 1.40% (the "Class B Spread"), (ii) 9.50% and (iii) the Net
Funds Cap. On each Bond Distribution Date after which the Bond
Principal Balance is less than 35% of the initial Bond Principal
Balance, the Class B Spread with respect to each succeeding
Distribution Date will be increased to 1.90%. The initial Certificate
Interest Rate of the Class B Certificates is 7.06%
(6) The Class X and Class O Certificates will be issued without a
Certificate Principal Amount. The Class O Certificate will not bear
interest. The Class X Certificate is an interest-only certificate and
will have a notional principal balance equal at all times to the Bond
Principal Balance. For each Accrual Period, interest will accrue on
the Class X Certificate notional principal balance at a rate equal to
the excess, if any, of (i) the Bond Interest Rate over (ii) a rate
equal to LIBOR plus a spread that equals the weighted average of the
Class A-1 Spread, the Class A-2 Spread, the Class M-1 Spread, the
Class M-2 Spread and the Class B Spread; provided, however, that if
the Certificate Interest Rate of the Class A-1, Class A-2, Class M-1,
Class M-2 or Class B Certificates is calculated on the basis of clause
(ii) or (iii) of the applicable definition of Certificate Interest
Rate, the rate calculated pursuant to this clause (ii) shall be
calculated on the basis of the weighted average of such rate or rates.
(7) The Class X and Class O Certificates will each be issued as a single
Certificate evidencing the entire Percentage Interest in such Class.
As of the Cut-off Date, the Underlying Bond had a Principal Balance of
$456,822,000.
In consideration of the mutual agreements herein contained, the
Depositor and the Trustee hereby agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.01. Definitions. The following words and phrases, unless the
context otherwise requires, shall have the meanings set forth below. CAPITALIZED
TERMS THAT ARE USED BUT NOT DEFINED IN THIS TRUST AGREEMENT AND WHICH ARE
DEFINED IN THE INDENTURE OR THE MASTER SERVICING AGREEMENT SHALL HAVE THE
MEANING ASCRIBED TO THEM THEREIN:
Accountant: A person engaged in the practice of accounting whom (except
when this Agreement provides that an Accountant must be Independent) may be
employed by or affiliated with the Depositor or an Affiliate of the Depositor.
Accrual Period: With respect to any Distribution Date , the one-month
period beginning on the immediately preceding Distribution Date (or on the
Closing Date, in the case of the first Accrual Period) and ending on the day
immediately preceding the related Distribution Date.
Additional Collateral: None.
Adjusted Prepayment Interest Shortfalls: With respect to any
Distribution Date, Prepayment Interest Shortfalls for such Distribution Date
minus any Compensating Interest Payments for such Distribution Date.
Affiliate: With respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified Person.
For the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Aggregate Loan Balance: The aggregate of the Scheduled Principal
Balances for all Mortgage Loans at the date of determination.
Aggregate Notional Amount: With respect to any Class of Notional
Certificates, the applicable aggregate notional amount set forth or described in
the Preliminary Statement hereto.
Aggregate Voting Interests: The aggregate of the Voting Interests of
all the Certificates under this Agreement.
Agreement: This Trust Agreement and all amendments and supplements
hereto.
Applied Loss Amount: With respect to any Distribution Date, the amount,
if any, by which (x) the aggregate Certificate Principal Amount after giving
effect to distributions on such date, but before giving effect to any
application of the Applied Loss Amount on such date, exceeds (y) the Stepped-up
Bond Balance as of the close of the related Collection Period.
Authenticating Agent: Any authenticating agent appointed by the Trustee
pursuant to Section 6.10.
Authorized Officer: Any Person who may execute an Officer's Certificate
on behalf of the Depositor.
Bankruptcy: As to any Person, the making of an assignment for the
benefit of creditors, the filing of a voluntary petition in bankruptcy,
adjudication as a bankrupt or insolvent, the entry of an order for relief in a
bankruptcy or insolvency proceeding, the seeking of reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief, or
seeking, consenting to or acquiescing in the appointment of a trustee, receiver
or liquidator, dissolution, or termination, as the case may be, of such Person
pursuant to the provisions of either the United States Bankruptcy Code of 1986,
as amended, or any other similar state laws.
Basis Risk Shortfall: With respect to any Distribution Date and each
Class of Certificates, the amount by which (a) the amount that would be payable
if clause (i) or (ii) of the definition of Certificate Interest Rate applicable
to such Class of Certificates were used to calculate interest on such Class of
Certificates exceeds (b) the amount that is payable on such Class of
Certificates calculated on the basis of the Bond Interest Rate.
Benefit Plan Opinion: An Opinion of Counsel satisfactory to the Trustee
to the effect that any proposed transfer will not (i) cause the assets of the
Trust Fund to be regarded as plan assets for purposes of the Plan Asset
Regulations or (ii) give rise to any fiduciary duty on the part of the Depositor
or the Trustee.
Bond Issuer: American Residential Eagle Bond Trust 1998-1, a Delaware
business trust.
Bond Overcollateralization Deficiency: With respect to any Distribution
Date, the amount by which the Targeted Overcollateralization Amount exceeds the
Bond Overcollateralization Amount (after giving effect to the distributions to
be made on such Distribution Date).
Bond Overcollateralization Excess Amount: With respect to each
Distribution Date, the excess of (i) the Bond Overcollateralization Amount for
such date, over (ii) the Targeted Overcollateralization Amount for such date.
Bond Trustee: First Union National Bank in its capacity as trustee
under the Indenture.
Book-Entry Certificates: Beneficial interests in Certificates
designated as "Book-Entry Certificates" in this Agreement, ownership and
transfers of which shall be evidenced or made through book entries by a Clearing
Agency as described in Section 3.09; provided, that after the occurrence of a
condition whereupon book-entry registration and transfer are no longer permitted
and Definitive Certificates are to be issued to Certificate Owners, such
Book-Entry Certificates shall no longer be "Book-Entry Certificates." As of the
Closing Date, the following Classes of Certificates constitute Book-Entry
Certificates: the Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class B
Certificates.
Business Day: Any day other than (i) a Saturday or a Sunday and (ii) a
day on which banking institutions in New York, New York or, if other than New
York, the city in which the Corporate Trust Office of the Trustee is located, or
the State of Maryland, the State of Minnesota or the State of North Carolina.
Carryforward Interest: With respect to any Distribution Date and each
Class of Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class B Certificates,
the sum of (i) the amount, if any, by which (x) the sum of (A) Current Interest
for such Class for the immediately preceding Distribution Date and (B) any
unpaid Carryforward Interest for such Class from previous Distribution Dates
exceeds (y) the amount distributed in respect of interest on such Class on such
immediately preceding Distribution Date, and (ii) interest on such amount for
the related Accrual Period at the applicable Certificate Interest Rate.
Certificate: Any one of the certificates signed and countersigned by
the Trustee in substantially the forms attached hereto as Exhibit A.
Certificate Account: The account maintained by the Trustee in
accordance with the provisions of Section 4.04.
Certificate Interest Rate: With respect to each Class of Certificates,
the applicable per annum rate set forth or described in the Preliminary
Statement hereto.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the owner of such Book-Entry Certificate, as reflected on the books of
the Clearing Agency, or on the books of a Person maintaining an account with
such Clearing Agency (directly or as an indirect participant, in accordance with
the rules of such Clearing Agency).
Certificate Principal Amount: With respect to any Certificate other
than a Class X or Class O Certificate, at the time of determination, the maximum
specified dollar amount of principal to which the Holder thereof is then
entitled hereunder, such amount being equal to the initial principal amount set
forth on the face of such Certificate, less the amount of all principal
distributions previously made with respect to such Certificate and all Applied
Loss Amounts previously allocated to such Certificate.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 3.02.
Certificateholder: The meaning provided in the definition of "Holder."
Class: All Certificates bearing the same class designation.
Class B Principal Distribution Amount: With respect to any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event has not
occurred with respect to such Distribution Date, the amount, if any, by which
(x) the sum of (i) the Class Certificate Principal Amounts of the Class X-0,
Xxxxx X-0, Class M-1 and Class M-2 Certificates after giving effect to
distributions on such Distribution Date and (ii) the Class Certificate Principal
Amount of the Class B Certificates immediately prior to such Distribution Date
exceeds (y) the lesser of (A) the product of (i) 97.30% and (ii) the Stepped-up
Bond Balance and (B) the amount, if any, by which (i) the Stepped-up Bond
Balance exceeds (ii) $2,315,379.
Class Certificate Principal Amount: With respect to each Class of
Certificates other than the Class X and Class O Certificates, the aggregate of
the Certificate Principal Amounts of all Certificates of such Class at the date
of determination.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
has not occurred with respect to such Distribution Date, the amount, if any, by
which (x) the sum of (i) the Class Certificate Principal Amount of the Class A-1
and Class A-2 Certificates after giving effect to distributions on such
Distribution Date and (ii) the Class Certificate Principal Amount of the Class
M-1 Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 82.30% and (ii) the Stepped-up Bond Balance and
(B) the amount, if any, by which (i) the Stepped-up Bond Balance exceeds (ii)
$2,315,379.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date on or after the Stepdown Date and as long as a Trigger Event
has not occurred with respect to such Distribution Date, the amount, if any, by
which (x) the sum of (i) the Class Certificate Principal Amounts of the Class
A-1, Class A-2 and Class M-1 Certificates after giving effect to distributions
on such Distribution Date and (ii) the Class Certificate Principal Amount of the
Class M-2 Certificates immediately prior to such Distribution Date exceeds (y)
the lesser of (A) the product of (i) 89.80% and (ii) the Stepped-up Bond Balance
and (B) the amount, if any, by which (i) the Stepped-up Bond Balance exceeds
(ii) $2,315,379.
Class O Certificate: The Class O Certificate executed by the Trustee,
and authenticated by the Certificate Registrar, substantially in the form
annexed hereto as Exhibit A-3 and evidencing the sole class of Ownership
Interest in the FASIT.
Clearing Agency: An organization registered as a "clearing agency"
pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. As
of the Closing Date, the Clearing Agency shall be The Depository Trust Company.
Clearing Agency Participant: A broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
Closing Date: June 17, 1998.
Code: The Internal Revenue Code of 1986, as amended, and as it may be
further amended from time to time, any successor statutes thereto, and
applicable U.S. Department of Treasury regulations issued pursuant thereto in
temporary or final form.
Collection Period: With respect to any Distribution Date, the period
commencing on the second day of the month immediately preceding the month in
which such Distribution Date occurs and ending on the first day of the month in
which such Distribution Date occurs.
Corporate Trust Office: The principal corporate trust office of the
Trustee at which, at any particular time, its corporate trust business shall be
administered, which office at the date hereof is located at 000 Xxxxx Xxxxx
Xxxxxx XX0000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Structured Finance.
Current Interest: With respect to each Class of Certificates (other
than the Class O Certificates) and any Distribution Date, the aggregate amount
of interest accrued during the related Accrual Period at the applicable
Certificate Interest Rate on the Class Certificate Principal Amount (or notional
balance) of such Class immediately prior to such Distribution Date. Current
interest for each Class of Certificates with respect to any Distribution Date
shall be reduced by such Class's allocable share of Net Prepayment Interest
Shortfalls, which shall be allocated among the Classes of Certificates, pro
rata, on the basis of the amount of interest distributable in the absence of
such shortfalls.
Cut-off Date: May 1, 1998.
DCR: Duff & Xxxxxx Credit Rating Co., or any successor in interest.
Deferred Amount: With respect to any Distribution Date and each Class
of Certificates, the aggregate of Applied Loss Amounts previously applied in
reduction of the Class Certificate Principal Amount thereof, less any amounts
previously reimbursed in respect thereof.
Definitive Certificate: A Certificate of any Class issued in
definitive, fully registered, certificated form.
Deleted Mortgage Loan: A Mortgage Loan that is repurchased from the
Trust Fund pursuant to the terms of the Master Servicing Agreement or as to
which one or more Replacement Mortgage Loans are substituted therefor.
Depositor: American Residential Eagle, Inc., a Delaware corporation
having its principal place of business in New York, or its successors in
interest.
Determination Date: With respect to each Distribution Date, the 18th
day of the month in which such Distribution Date occurs, or, if such 18th day is
not a Business Day, the next succeeding Business Day.
Distribution Date: The 25th day of each month or, if such 25th day is
not a Business Day, the next succeeding Business Day, commencing in June 1998.
Eligible Account: Either (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company acceptable to
the Rating Agencies or (ii) an account or accounts the deposits in which are
insured by the FDIC to the limits established by such corporation, provided that
any such deposits not so insured shall be maintained in an account at a
depository institution or trust company whose commercial paper or other short
term debt obligations (or, in the case of a depository institution or trust
company which is the principal subsidiary of a holding company, the commercial
paper or other short term debt or deposit obligations of such holding company or
depository institution, as the case may be) have been rated by each Rating
Agency in its highest short-term rating category, or (iii) a segregated trust
account or accounts (which shall be a "special deposit account") maintained with
the Trustee or any other federal or state chartered depository institution or
trust company, acting in its fiduciary capacity, in a manner acceptable to the
Trustee and the Rating Agencies. Eligible Accounts may bear interest.
Eligible Corporation: Shall mean an eligible corporation within the
definition set out in Section 860L(a)(2) of the Code.
Eligible Investments: Any one or more of the following obligations or
securities:
(i) direct obligations of, and obligations fully guaranteed as to
timely payment of principal and interest by, the United States of America or any
agency or instrumentality of the United States of America the obligations of
which are backed by the full faith and credit of the United States of America
("Direct Obligations");
(ii) federal funds, or demand and time deposits in, certificates of
deposits of, or bankers' acceptances issued by, any depository institution or
trust company (including U.S. subsidiaries of foreign depositories and the
Trustee or any agent of the Trustee, acting in its respective commercial
capacity) incorporated or organized under the laws of the United States of
America or any state thereof and subject to supervision and examination by
federal or state banking authorities, so long as at the time of investment or
the contractual commitment providing for such investment the commercial paper or
other short-term debt obligations of such depository institution or trust
company (or, in the case of a depository institution or trust company which is
the principal subsidiary of a holding company, the commercial paper or other
short-term debt or deposit obligations of such holding company or deposit
institution, as the case may be) have been rated by each Rating Agency in its
highest short-term rating category or one of its two highest long-term rating
categories;
(iii) repurchase agreements collateralized by Direct Obligations or
securities guaranteed by GNMA, FNMA or FHLMC with any registered broker/dealer
subject to Securities Investors' Protection Corporation jurisdiction or any
commercial bank insured by the FDIC, if such broker/dealer or bank has an
uninsured, unsecured and unguaranteed obligation rated by each Rating Agency in
its highest short-term rating category;
(iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
state thereof which have a credit rating from each Rating Agency, at the time of
investment or the contractual commitment providing for such investment, at least
equal to one of the two highest long-term credit rating categories of each
Rating Agency; provided, however, that securities issued by any particular
corporation will not be Eligible Investments to the extent that investment
therein will cause the then outstanding principal amount of securities issued by
such corporation and held as part of the Trust Fund to exceed 20% of the sum of
the Bond Principal Balance and the aggregate principal amount of all Eligible
Investments in the Certificate Account; provided, further, that such securities
will not be Eligible Investments if they are published as being under review
with negative implications from either Rating Agency;
(v) commercial paper (including both non-interest-bearing discount
obligations and interest-bearing obligations payable on demand or on a specified
date not more than 180 days after the date of issuance thereof) rated by each
Rating Agency in its highest short-term rating category;
(vi) a Qualified GIC;
(vii) certificates or receipts representing direct ownership interests
in future interest or principal payments on obligations of the United States of
America or its agencies or instrumentalities (which obligations are backed by
the full faith and credit of the United States of America) held by a custodian
in safekeeping on behalf of the holders of such receipts; and
(viii) any other demand, money market, common trust fund or time
deposit or obligation, or interest-bearing or other security or investment, (A)
rated in the highest rating category by each Rating Agency or (B) that would not
adversely affect the then current rating by either Rating Agency of any of the
Certificates; provided, however, that no such instrument shall be an Eligible
Investment if such instrument evidences either (i) a right to receive only
interest payments with respect to the obligations underlying such instrument, or
(ii) both principal and interest payments derived from obligations underlying
such instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity of greater than 120% of the yield to
maturity at par of such underlying obligations, provided that any such
investment will be a "permitted asset" within the meaning of Section 860L(c) of
the Code.
ERISA-Restricted Certificate: Any Subordinate Certificate.
Events of Default: The Events of Default with respect to the Underlying
Bond set forth in Section 5.01 of the Indenture.
Extra Principal Distribution Amount: With respect to any Distribution
Date, the lesser of (i) the Excess Mortgage Amount for such Distribution Date as
reduced by (x) amounts in respect thereof applied on such date to distributions
on the Underlying Bond pursuant to Section 2.03(b)(iii)(A) and (B) of the
Indenture and (ii) the Bond Overcollateralization Deficiency for such date.
FASIT: A "financial asset securitization investment trust" within the
meaning of section 860L of the Code.
FASIT Provisions: The provisions of the federal income tax law relating
to FASITs which appear at sections 860H through 86OL of Subchapter M of Chapter
1 of the Code, and related provisions, and regulations, including proposed
regulations and rulings, and administrative pronouncements promulgated
thereunder, as the foregoing may be in effect from time to time.
FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.
FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Final Distribution Date: May 25, 2028.
Financial Intermediary: A broker, dealer, bank or other financial
institution or other Person that clears through or maintains a custodial
relationship with a Clearing Agency Participant.
FNMA: The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
GNMA: The Government National Mortgage Association, a wholly owned
corporate instrumentality of the United States within HUD.
Holder or Certificateholder: The registered owner of any Certificate as
recorded on the books of the Certificate Registrar except that, solely for the
purposes of taking any action or giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Depositor, the Trustee, the Master
Servicer, any Servicer or any Affiliate thereof shall be deemed not to be
outstanding in determining whether the requisite percentage necessary to effect
any such consent has been obtained, except that, in determining whether the
Trustee shall be protected in relying upon any such consent, only Certificates
which a Responsible Officer of the Trustee knows to be so owned shall be
disregarded. The Trustee may request and conclusively rely on certifications by
the Depositor, the Master Servicer and any Servicer in determining whether any
Certificates are registered to an Affiliate of the Depositor, the Master
Servicer or such Servicer.
HUD: The United States Department of Housing and Urban Development, or
any successor thereto.
Independent: When used with respect to any Accountants, a Person who is
"independent" within the meaning of Rule 2-01(b) of the Securities and Exchange
Commission's Regulation S-X. When used with respect to any other Person, a
Person who (a) is in fact independent of another specified Person and any
Affiliate of such other Person, (b) does not have any material direct financial
interest in such other Person or any Affiliate of such other Person, and (c) is
not connected with such other Person or any Affiliate of such other Person as an
officer, employee, promoter, underwriter, trustee, partner, director or Person
performing similar functions.
Indenture: The Indenture, dated as of June 1, 1998, between the Bond
Issuer and the Bond Trustee.
Interest Distribution Amount: With respect to any Distribution Date,
the amount of interest received by the Trustee from the Underlying Bond, which
will be equal to one month's interest (calculated on the basis of the actual
number of day elapsed and a year of 360 days) on the Bond Principal Balance at
the then applicable Bond Interest Rate plus any amounts received in respect of
Carryforward Interest, Basis Risk Shortfalls and any Unpaid Basis Risk
Shortfalls.
Interest Remittance Amount: With respect to any Distribution Date, the
sum of (i) all interest collected (other than Payaheads) or advanced in respect
of Scheduled Payments on the Mortgage Loans, including any prepayment premiums
or penalties, during the related Collection Period (less (x) expenses calculated
at the Expense Fee Rate and (y) unreimbursed Advances and other amounts due to
the Master Servicer, the Servicers or the Trustee, to the extent allocable to
interest), (ii) any amounts paid by the Servicers with respect to Prepayment
Interest Shortfalls and any Compensating Interest Payment with respect to the
related Prepayment Period, (iii) the portion of any Substitution Amount paid
during the related Prepayment Period allocable to interest and (iv) all Net
Liquidation Proceeds, Insurance Proceeds and other recoveries collected during
the related Prepayment Period, to the extent allocable to interest, as reduced
in each case by unreimbursed interest Advances and other amounts due the Master
Servicer, the Servicers or the Bond Trustee, to the extent allocable to
interest.
Xxxxxx Capital: Xxxxxx Capital, A Division of Xxxxxx Brothers Holdings
Inc., or any successor in interest.
LIBOR: The per annum rate determined pursuant to Section 4.05 on the
basis of London interbank offered rate quotations for one-month Eurodollar
deposits, as such quotations may appear on the display designated as page
"LIUS01M" on the Bloomberg Financial Markets Commodities News (or such other
page as may replace such page on that service for the purpose of displaying
London interbank offered quotations of major banks).
LIBOR Certificate: Any Class X-0, Xxxxx X-0, Class M-1, Class M-2 or
Class B Certificate.
LIBOR Determination Date: The second London Business Day immediately
preceding the commencement of each Accrual Period for any LIBOR Certificates.
Liquidated Mortgage Loan: Any defaulted Mortgage Loan as to which the
Master Servicer or the applicable Servicer has determined that all amounts that
it expects to recover on behalf of the Trust Fund from or on account of such
Mortgage Loan have been recovered.
Liquidation Expenses: Expenses that are incurred by the Master Servicer
or a Servicer in connection with the liquidation of any defaulted Mortgage Loan
and are not recoverable under the applicable Primary Mortgage Insurance Policy,
including, without limitation, foreclosure and rehabilitation expenses, legal
expenses and unreimbursed amounts expended pursuant to Sections 9.06, 9.16 or
9.22.
Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through the sale or assignment of such
Mortgage Loan, trustee's sale, foreclosure sale or otherwise, or the sale of the
related Mortgaged Property if the Mortgaged Property is acquired in satisfaction
of the Mortgage Loan, including any amounts remaining in the related Escrow
Account.
London Business Day: Any day on which banks are open for dealing in
foreign currency and exchange in London, England and New York City.
Master Servicer: Norwest Bank Minnesota, National Association, or any
successor in interest, or if any successor master servicer shall be appointed as
herein provided, then such successor master servicer.
Master Servicing Agreement: The Master Servicing Agreement, dated as of
June 1, 1998 among the Bond Issuer, the Master Servicer and the Bond Trustee.
Mortgage: A mortgage, deed of trust or other instrument encumbering a
fee simple interest in real property securing a Mortgage Note, together with
improvements thereto.
Mortgage Loan: A Mortgage and the related notes or other evidences of
indebtedness secured by each such Mortgage conveyed, transferred, sold, assigned
to or deposited with the Bond Issuer pursuant to the Deposit Trust Agreement and
pledged to the Bond Trustee under the Indenture.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
the related Liquidation Proceeds net of unreimbursed expenses incurred in
connection with liquidation or foreclosure and unreimbursed Advances, if any,
received and retained in connection with the liquidation of such Mortgage Loan.
Net Prepayment Interest Shortfalls: With respect to any Distribution
Date, the excess of (i) Prepayment Interest Shortfalls for such Distribution
Date over (ii) the sum of Compensating Interest Payments and amounts distributed
pursuant to Section 5.02(b)(xiii) on such Distribution Date.
Non-Book-Entry Certificate: Any Certificate other than a Book-Entry
Certificate.
Notional Amount: With respect to any Notional Certificate and any
Distribution Date, such Certificate's Percentage Interest of the Aggregate
Notional Amount of such Class of Certificates for such Distribution Date.
Notional Certificate: The Class X Certificate.
Offering Document: The Prospectus.
Officer's Certificate: A certificate signed by the Chairman of the
Board, any Vice Chairman, the President, any Vice President or any Assistant
Vice President of a Person, and in each case delivered to the Trustee.
Opinion of Counsel: A written opinion of counsel, reasonably acceptable
in form and substance to the Trustee, and who may be in-house or outside counsel
to the Depositor but which must be Independent outside counsel with respect to
any such opinion of counsel concerning the transfer of the Class O Certificate
or concerning certain matters with respect to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or the taxation, or the federal
income tax status, of the Trust Fund as a FASIT.
Ownership Certificate: Any Class O Certificate.
Paying Agent: Any paying agent appointed pursuant to Section 3.08 of
this Agreement.
Percentage Interest: With respect to any Certificate, its percentage
interest in the undivided beneficial ownership interest in the Trust Fund
evidenced by all Certificates of the same Class as such Certificate. With
respect to any Certificate other than the Class X and Class O Certificates, the
Percentage Interest evidenced thereby shall equal the initial Certificate
Principal Amount thereof divided by the initial Class Certificate Principal
Amount of all Certificates of the same Class. With respect to the Class X and
Class O Certificates, the Percentage Interest evidenced thereby shall be 100%.
Person: Any individual, corporation, partnership, joint venture,
association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Placement Agent: Xxxxxx Brothers Inc.
Plan Asset Regulations: The Department of Labor regulations set forth
in 29 C.F.R. 2510.3-101.
Pool Delinquency Rate: With respect to any Collection Period, the
fraction, expressed as a percentage, the numerator of which is the aggregate
outstanding principal balance of all Mortgage Loans 60 or more days delinquent
(including all foreclosures and REO Properties) as of the close of business on
the last day of such Collection Period, and the denominator of which is the
Aggregate Loan Balance as of the close of business on the last day of such
Collection Period.
Principal Distribution Amount: With respect to any Distribution Date,
the sum of (i) the excess of the Principal Remittance Amount for such date over
the Bond Overcollateralization Excess Amount, if any, for such date, plus (ii)
the Extra Principal Distribution Amount, if any, for such date.
Principal Remittance Amount: With respect to any Distribution Date, the
sum of (i) all principal collected (other than Payaheads) or advanced in respect
of Scheduled Payments on the Mortgage Loans during the related Collection Period
(less unreimbursed Advances and other amounts due to the Master Servicer, the
Servicers or the Owner Trustee, the Bond Trustee or the Trustee, to the extent
allocable to principal), (ii) the outstanding principal balance of each Mortgage
Loan that was purchased from the Bond Trust during the related Prepayment
Period, (iii) the portion of any Substitution Amount paid during the related
Prepayment Period allocable to principal, and (iv) all Net Liquidation Proceeds,
Insurance Proceeds and other recoveries collected during the related Prepayment
Period, to the extent allocable to principal, as reduced in each case by
unreimbursed Advances and other amounts due to the Master Servicer, the
Servicers, the Owner Trustee, the Bond Trustee or the Trustee, to the extent
allocable to principal.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Prospectus: The prospectus supplement dated June 15, 1998, together
with the accompanying prospectus dated June 5, 1998, relating to the Class A-1,
Class A-2 and Class M-1.
Qualified GIC: A guaranteed investment contract or surety bond
providing for the investment of funds in the Certificate Account and insuring a
minimum, fixed or floating rate of return on investments of such funds, which
contract or surety bond shall:
(a) be an obligation of an insurance company or other
corporation whose long-term debt is rated by each Rating Agency in one of its
two highest rating categories or, if such insurance company has no long-term
debt, whose claims paying ability is rated by each Rating Agency in one of its
two highest rating categories, and whose short-term debt is rated by each Rating
Agency in its highest rating category;
(b) provide that the Trustee may exercise all of the rights
under such contract or surety bond without the necessity of taking any action by
any other Person;
(c) provide that if at any time the then current credit
standing of the obligor under such guaranteed investment contract is such that
continued investment pursuant to such contract of funds would result in a
downgrading of any rating of the Certificates, the Trustee shall terminate such
contract without penalty and be entitled to the return of all funds previously
invested thereunder, together with accrued interest thereon at the interest rate
provided under such contract to the date of delivery of such funds to the
Trustee;
(d) provide that the Trustee's interest therein shall be
transferable to any successor trustee hereunder: and
(e) provide that the funds reinvested thereunder and accrued
interest thereon be returnable to the Certificate Account, as the case may be,
not later than the Business Day prior to any Distribution Date.
Rating Agency: S&P and DCR.
Realized Loss: With respect to each Liquidated Mortgage Loan, an amount
equal to (i) the unpaid principal balance of such Mortgage Loan as of the date
of liquidation, minus (ii) Liquidation Proceeds received, to the extent
allocable to principal, net of amounts that are reimbursable therefrom to the
Master Servicer or any Servicer with respect to such Mortgage Loan (other than
Advances of principal) including expenses of liquidation. In determining whether
a Realized Loss is a Realized Loss of principal, Liquidation Proceeds shall be
allocated, first, to payment of expenses related to such Liquidated Mortgage
Loan, then to accrued unpaid interest and finally to reduce the principal
balance of the Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date.
Reference Banks: As defined in Section 4.05 hereof.
REO Property: As defined in the Master Servicing Agreement.
Replacement Mortgage Loan: As defined in the Master Servicing
Agreement.
Required Reserve Fund Amount: With respect to any Distribution Date,
the amount, if any, by which the Targeted Overcollateralization Amount exceeds
the Bond Overcollateralization Amount (after giving effect to any payments to be
made on such Distribution Date).
Reserve Fund: The account established and maintained by the Trustee
pursuant to Section 5.06 hereof.
Reserve Fund Deferred Amount Deposit: As defined in Section 5.02(d)(v)
hereof.
Reserve Interest Rate: As defined in Section 4.05 hereof.
Responsible Officer: When used with respect to the Trustee, any Vice
President, Assistant Vice President, the Secretary, any assistant secretary, the
Treasurer, or any assistant treasurer, working in its corporate trust
department, or any other officer of the Trustee to whom a matter is referred
because of such officer's knowledge of and familiarity with the particular
subject.
Restricted Certificate: The Class M-2, Class B, Class X and Class O
Certificates.
Rolling Three Month Delinquency Rate: With respect to any Distribution
Date, the fraction, expressed as a percentage, equal to the average of the Pool
Delinquency Rates for each of the three (or one and two, in the case of the
first and second Distribution Dates) immediately preceding Collection Periods.
S&P: Standard & Poor's Rating Services, a division of The XxXxxx-Xxxx
Companies, Inc., or any successor in interest.
Senior Enhancement Percentage: With respect to any Distribution Date,
the fraction, expressed as a percentage, the numerator of which is the sum of
the aggregate Certificate Principal Amount of the Subordinate Certificates and
the Bond Overcollateralization Amount, in each case after giving effect to
distributions on such Distribution Date, and the denominator of which is the
Stepped-up Bond Balance as of the last day of the related Collection Period.
Senior Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or with respect to which a Trigger Event has
occurred with respect to such Distribution Date, the Principal Distribution
Amount and (b) on or after the Stepdown Date and as long as a Trigger Event has
not occurred with respect to such Distribution Date, the amount, if any, by
which (x) the aggregate Certificate Principal Amount of the Senior Certificates
immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) 62.42% and (ii) the Stepped-up Bond Balance and (B) the amount,
if any, by which (i) the Stepped-up Bond Balance exceeds (ii) $2,315,379.
Startup Day: The day designated as such pursuant to Section 10.01(c)
hereof.
Stepdown Date: The later to occur of (x) the Distribution Date in June
2001 and (y) the first Distribution Date on which the Senior Enhancement
Percentage (calculated for this purpose after giving effect to payments or other
recoveries in respect of the Mortgage Loans during the related Collection Period
but before giving effect to distributions on the Certificates on such
Distribution Date) is greater than to equal to 37.58%.
Subordinate Certificate: Any Class M-1, Class M-2, Class B or Class X
Certificate.
Substitution Amount: As defined in the Master Servicing Agreement.
Targeted Overcollateralization Amount: With respect to any Distribution
Date, (x) prior to the Stepdown Date, the product of 1.35% and the Aggregate
Loan Balance as of the Cut-Off Date and (y) on and after the Stepdown Date, the
greater of (i) the product of 2.70% and the Aggregate Loan Balance as of the
last day of the related Collection Period and (ii) $2,315,379.
Termination Price: As defined in Section 7.01 hereof.
Total Distribution Amount: With respect to any Distribution Date, the
sum of the Interest Distribution Amount for such date and the Principal
Distribution Amount for such date.
Trigger Event: With respect to any Distribution Date, if the Rolling
Three Month Delinquency Rate as of the last day of the immediately preceding
Collection Period equals or exceeds 50% of the Senior Enhancement Percentage for
such Distribution Date.
Trust Fund Assets: The corpus of the trust created pursuant to this
Agreement, consisting of the Underlying Bond, including all distribution thereon
after the Cut-off Date, the Certificate Account, the Reserve Fund and the other
items referred to in, and conveyed to the Trustee under, Section 2.01.
Trustee: First Union National Bank, or any successor in interest, or if
any successor trustee or any co-trustee shall be appointed as herein provided,
then such successor trustee and such co-trustee, as the case may be.
Trustee Fee: As to any Distribution Date, an amount equal to the
product of the Trustee Fee Rate and the Aggregate Loan Balance as of the first
day of the related Collection Period.
Trustee Fee Rate: 0.001% per annum.
Underlying Bond: The Collateralized Callable Mortgage Bond issued by
the Bond Issuer pursuant to the Indenture.
Unpaid Basis Risk Shortfall: With respect to any Distribution Date and
each Class of Certificates, the aggregate of all Basis Risk Shortfalls with
respect to such Class for all previous Distribution Dates, together with
interest thereon at the applicable Certificate Interest Rate, less all payments
made to the holders of the Certificates, of such Class in respect of Basis Risk
Shortfalls on or prior to such Distribution Date.
Voting Interests: The portion of the voting rights of all the
Certificates that is allocated to any Certificate for purposes of the voting
provisions of this Agreement. At all times during the term of this Agreement,
95% of all Voting Interests shall be allocated to the Certificates other than
the Class X Certificate, and 5% of all Voting Interests shall be allocated to
the Class X Certificate. Voting Interests shall be allocated among the other
Classes of Certificates (and among the Certificates within each such Class) in
proportion to their Class Certificate Principal Amounts (or Certificate
Principal Amounts).
Section 1Calculations Respecting Accrued Interest. Accrued interest, if any, on
any Certificate shall be calculated based upon a 360-day year and the actual
number of days in each Accrual Period.
ARTICLE II.
DECLARATION OF TRUST;
CONVEYANCE OF THE UNDERLYING BOND; ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of the Underlying Bond. The Depositor,
concurrently with the execution and delivery of this Agreement, does hereby
transfer, convey, sell and assign to the Trustee, on behalf of the Holders of
the Certificates, without recourse, all the right, title and interest of the
Depositor in and to the Underlying Bond, including all distributions thereon
payable on and after the Cut-off Date. In connection with such assignment, the
Depositor shall have caused the Underlying Bond to be registered in the name of,
or endorsed to the order of, First Union National Bank, as trustee, or in a
nominee name of the Trustee, and to be delivered or transferred to the Trustee.
The assignment of the Underlying Bond accomplished hereby is absolute and is
intended as a sale. The Depositor represents and covenants that the Underlying
Bond as of the Closing Date is free and clear of any right, charge, security
interest or lien or claim in favor of the Depositor or any person claiming
through the Depositor and that the Depositor has, as of the Closing Date, the
right to assign the Underlying Bond to the Trustee.
It is the intention of the Depositor that the transfer and assignment
of the Underlying Bond shall constitute a sale from the Depositor to the Trust
and that such Underlying Bond not be a part of the Depositor's estate in the
event of the insolvency of the Depositor. In the event the transfer and
assignment of the Underlying Bond contemplated by the Agreement is deemed to be
other than a sale notwithstanding the intent of the parties hereto, the
Agreement shall be deemed to be and in such event hereby is the grant of a
security interest from the Depositor to the Trustee, and the Trustee shall have
all the rights, powers and privileges of a secured party under the Uniform
Commercial Code in effect in the applicable jurisdiction. In such event, the
Depositor agrees to take such action and execute such documents as shall be
necessary in order to fully realize the benefits of such secured party status,
including, without limitations, powers of attorney, financing statements,
notices of lien or other instruments or documents.
Section 2.02. Issuance of Certificates. The Trustee acknowledges the
transfer and delivery to it of the Underlying Bond in the manner described in
Section 2.01 hereof and declares that the Trustee holds and will hold such
Underlying Bond in trust for the benefit of all present and future
Certificateholders and, concurrently with such transfer and delivery, has caused
to be duly executed, authenticated and delivered to or upon the order of the
Depositor the Certificates in authorized denominations, registered in such names
as the Depositor has requested.
ARTICLE III.
THE CERTIFICATES
Section 3.01. The Certificates. (a) The Certificates shall be issuable
in registered form only and shall be securities governed by Article 8 of the New
York Uniform Commercial Code. The Book-Entry Certificates will be evidenced by
one or more certificates, beneficial ownership of which will be held in the
dollar denominations in Certificate Principal Amount or Notional Amount, as
applicable, or in the Percentage Interests, specified herein. Each Class of
Certificates (other than the Class X and Class O Certificates) will be issued in
the minimum denominations in Certificate Principal Amount specified in the
Preliminary Statement hereto and in integral multiples of $1 in excess thereof.
The Class X and Class O Certificates will each be issued as a single Certificate
and maintained in definitive, fully registered form in a denomination equal to
100% of the Percentage Interest of such Class. The Certificates may be issued in
the form of typewritten certificates.
(b) The Certificates shall be executed by manual or facsimile signature
on behalf of the Trustee by an authorized officer. Each Certificate shall, on
original issue, be authenticated by the Trustee upon the order of the Depositor
upon receipt by the Trustee of the Underlying Bond described in Section 2.01. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein, executed by an
authorized officer of the Trustee or the Authenticating Agent, if any, by manual
signature, and such certification upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates shall be dated the date
of their authentication. At any time and from time to time after the execution
and delivery of this Agreement, the Depositor may deliver Certificates executed
by the Depositor to the Trustee or the Authenticating Agent for authentication
and the Trustee or the Authenticating Agent shall authenticate and deliver such
Certificates as in this Agreement provided and not otherwise.
Section 3.02. Registration. The Trustee is hereby appointed, and hereby
accepts its appointment as, Certificate Registrar in respect of the Certificates
and shall maintain books for the registration and for the transfer of
Certificates (the "Certificate Register"). The Trustee may appoint a bank or
trust company to act as Certificate Registrar. A registration book shall be
maintained for the Certificates collectively. The Certificate Registrar may
resign or be discharged or removed and a new successor may be appointed in
accordance with the procedures and requirements set forth in Sections 6.06 and
6.07 hereof with respect to the resignation, discharge or removal of the Trustee
and the appointment of a successor Trustee. The Certificate Registrar may
appoint, by a written instrument delivered to the Holders and the Master
Servicer, any bank or trust company to act as co-registrar under such conditions
as the Certificate Registrar may prescribe; provided, however, that the
Certificate Registrar shall not be relieved of any of its duties or
responsibilities hereunder by reason of such appointment.
Section 3.03. Transfer and Exchange of Certificates. (a) A Certificate
(other than Book-Entry Certificates which shall be subject to Section 3.09
hereof) may be transferred by the Holder thereof only upon presentation and
surrender of such Certificate at the office of the Certificate Registrar duly
endorsed or accompanied by an assignment duly executed by such Holder or his
duly authorized attorney in such form as shall be satisfactory to the
Certificate Registrar. Upon the transfer of any Certificate in accordance with
the preceding sentence, the Trustee shall execute, and the Trustee or any
Authenticating Agent shall authenticate and deliver to the transferee, one or
more new Certificates of the same Class and evidencing, in the aggregate, the
same aggregate Certificate Principal Amount as the Certificate being
transferred. No service charge shall be made to a Certificateholder for any
registration of transfer of Certificates, but 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 registration of transfer of Certificates.
(b) A Certificate may be exchanged by the Holder thereof for any number of new
Certificates of the same Class, in authorized denominations, representing in the
aggregate the same Certificate Principal Amount as the Certificate surrendered,
upon surrender of the Certificate to be exchanged at the office of the
Certificate Registrar duly endorsed or accompanied by a written instrument of
transfer duly executed by such Holder or his duly authorized attorney in such
form as is satisfactory to the Certificate Registrar. Certificates delivered
upon any such exchange will evidence the same obligations, and will be entitled
to the same rights and privileges, as the Certificates surrendered. No service
charge shall be made to a Certificateholder for any exchange of Certificates,
but 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
exchange of Certificates. Whenever any Certificates are so surrendered for
exchange, the Trustee shall execute, and the Trustee or the Authenticating Agent
shall authenticate, date and deliver the Certificates which the
Certificateholder making the exchange is entitled to receive.
(c) By acceptance of a Restricted Certificate, whether upon original
issuance or subsequent transfer, each Holder of such a Certificate acknowledges
the restrictions on the transfer of such Certificate set forth thereon and
agrees that it will transfer such a Certificate only as provided herein.
The following restrictions shall apply with respect to the transfer and
registration of transfer of a Restricted Certificate to a transferee that takes
delivery in the form of a Definitive Certificate:
(i) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is (x) to the
Depositor or the Placement Agent, an affiliate (as defined in
Rule 144(a)(1) under the 0000 Xxx) of the Depositor or the
Placement Agent or (y) being made to a "qualified
institutional buyer" as defined in Rule 144A under the
Securities Act of 1933, as amended (the "Act") by a transferor
who has provided the Trustee with a certificate in the form of
Exhibit F hereto; and
(ii) The Certificate Registrar shall register the transfer of a
Restricted Certificate if the requested transfer is being made
to an "accredited investor" under Rule 501(a)(1), (2), (3) or
(7) under the Act by a transferor who furnishes to the Trustee
a letter of the transferee substantially in the form of
Exhibit G hereto. (d) No transfer of an ERISA-Restricted
Certificate in the form of a Definitive Certificate shall be
made to any Person unless the Trustee has received (A) a
certificate substantially in the form of Exhibit H hereto from
such transferee or (B) an Opinion of Counsel satisfactory to
the Trustee and the Depositor to the effect that the purchase
and holding of such a Certificate will not constitute or
result in the assets of the Trust Fund being deemed to be
"plan assets" subject to the prohibited transactions
provisions of ERISA or Section 4975 of the Code and will not
subject the Trustee or the Depositor to any obligation in
addition to those undertaken in the Agreement; provided,
however, that the Trustee will not require such certificate or
opinion in the event that, as a result of a change of law or
otherwise, counsel satisfactory to the Trustee has rendered an
opinion to the effect that the purchase and holding of an
ERISA-Restricted Certificate by a Plan or a Person that is
purchasing or holding such a Certificate with the assets of a
Plan will not constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code. The preparation and
delivery of the certificate and opinions referred to above
shall not be an expense of the Trust Fund, the Trustee or the
Depositor. Notwithstanding the foregoing, no opinion or
certificate shall be required for the initial issuance of the
ERISA-Restricted Certificates.
(e) As a condition of the registration of transfer or exchange of any
Certificate, the Certificate Registrar may require the certified taxpayer
identification number of the owner of the Certificate and the payment of a sum
sufficient to cover any tax or other governmental charge imposed in connection
therewith; provided, however, that the Certificate Registrar shall have no
obligation to require such payment or to determine whether or not any such tax
or charge may be applicable. No service charge shall be made to the
Certificateholder for any registration, transfer or exchange of a Certificate.
(f) Notwithstanding anything to the contrary contained herein, no Class X or
Class O Certificate may be owned, pledged or transferred, directly or
indirectly, by or to any person that is not an Eligible Corporation.
Prior to and as a condition of the registration of any transfer, sale
or other disposition of a Class O Certificate, the proposed transferee shall
deliver to the Trustee an affidavit in substantially the form attached hereto as
Exhibit D-1 representing and warranting, among other things, that such
transferee is an Eligible Corporation or an agent or nominee acting on behalf of
an Eligible Corporation (any such transferee, a "Permitted Transferee"), and the
proposed transferor shall deliver to the Trustee an affidavit in substantially
the form attached hereto as Exhibit D-2. In addition, the Trustee may (but shall
have no obligation to) require, prior to and as a condition of any such
transfer, the delivery by the proposed transferee of an Opinion of Counsel,
addressed to the Depositor and the Trustee satisfactory in form and substance to
the Depositor, that such proposed transferee or, if the proposed transferee is
an agent or nominee, the proposed beneficial owner, is an Eligible Corporation .
Notwithstanding the registration in the Certificate Register of any transfer,
sale, or other disposition of a Class O Certificate to a transferee other than
an Eligible Corporation or an agent or nominee acting on behalf of a transferee,
such registration shall be deemed to be of no legal force or effect whatsoever
and such transferee (or such agent or nominee) shall not be deemed to be a
Certificateholder for any purpose hereunder, including, but not limited to, the
receipt of distributions on such Class O Certificate. The Trustee shall not be
under any liability to any person for any registration or transfer of a Class O
Certificate to a transferee that is not a Permitted Transferee or for the
maturity of any payments due on such Class O Certificate to the Holder thereof
or for taking any other action with respect to such Holder under the provisions
of the Agreement, so long as the transfer was effected in accordance with this
Section 3.03(f), unless the Trustee shall have actual knowledge at the time of
such transfer or the time of such payment or other action that the transferee is
not a Permitted Transferee (or an agent or nominee thereof). The Trustee shall
be entitled to recover from any Holder of a Class O Certificate that was not a
Permitted Transferee (or an agent or nominee thereof) at the time it became a
Holder or any subsequent time it ceased to be an Eligible Corporation all
payments made on such Class O Certificate at and after either such times (and
all costs and expenses, including but not limited to attorneys' fees, incurred
in connection therewith). Any payment (not including any such costs and
expenses) so recovered by the Trustee shall be paid and delivered to the last
preceding Holder of such Class O Certificate.
If any purported transferee shall become a registered Holder of a Class
O Certificate in violation of the provisions of this Section 3.03(f), then upon
receipt of written notice to the Trustee that the registration of transfer of
such Class O Certificate was not in fact permitted by this Section 3.03(f), the
last preceding Permitted Transferee shall be restored to all rights as Holder
thereof retroactive to the date of such registration of transfer of such Class O
Certificate. The Trustee shall be under no liability to any Person for any
registration of transfer of a Class O Certificate that is in fact not permitted
by this Section 3.03(f), for making any payment due on such Certificate to the
registered Holder thereof or for taking any other action with respect to such
Holder under the provisions of this Agreement so long as the transfer was
registered upon receipt of the affidavit described in the preceding paragraph of
this Section 3.03(f).
(g) Each Holder of a Class X Certificate or Class O Certificate, by
such Holder's acceptance thereof, shall be deemed for all purposes to have
consented to the provisions of this section.
Section 3.04. Cancellation of Certificates. Any Certificate
surrendered for registration of transfer or exchange shall be cancelled and
retained in accordance with normal retention policies with respect to cancelled
certificates maintained by the Trustee or the Certificate Registrar.
Section 3.05. Replacement of Certificates. If (i) any Certificate is
mutilated and is surrendered to the Trustee or any Authenticating Agent or (ii)
the Trustee or any Authenticating Agent receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate, and there is delivered to the
Trustee or the Authenticating Agent such security or indemnity as may be
required by them to save each of them harmless, then, in the absence of notice
to the Depositor and any Authenticating Agent that such destroyed, lost or
stolen Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Trustee or any Authenticating Agent shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like tenor and Certificate Principal
Amount. Upon the issuance of any new Certificate under this Section 3.05, the
Trustee and Authenticating Agent may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the Trustee
or the Authenticating Agent) connected therewith. Any replacement Certificate
issued pursuant to this Section 3.05 shall constitute complete and indefeasible
evidence of ownership in the applicable Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 3.06. Persons Deemed Owners. Subject to the provisions of
Section 3.09 with respect to Book-Entry Certificates, the Depositor, the Master
Servicer, the Trustee, the Certificate Registrar and any agent of any of them
may treat the Person in whose name any Certificate is registered upon the books
of the Certificate Registrar as the owner of such Certificate for the purpose of
receiving distributions pursuant to Sections 5.01 and 5.02 and for all other
purposes whatsoever, and neither the Depositor, the Master Servicer, the
Trustee, the Certificate Registrar nor any agent of any of them shall be
affected by notice to the contrary.
Section 3.07. Temporary Certificates. (a) Pending the preparation of
definitive Certificates, upon the order of the Depositor, the Trustee shall
execute and shall authenticate and deliver temporary Certificates that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive
Certificates in lieu of which they are issued and with such variations as the
authorized officers executing such Certificates may determine, as evidenced by
their execution of such Certificates.
(b) If temporary Certificates are issued, the Depositor will cause
Definitive Certificates to be prepared without unreasonable delay. After the
preparation of Definitive Certificates, the temporary Certificates shall be
exchangeable for definitive Certificates upon surrender of the temporary
Certificates at the office or agency of the Trustee without charge to the
Holder. Upon surrender for cancellation of any one or more temporary
Certificates, the Trustee shall execute and authenticate and deliver in exchange
therefor a like aggregate Certificate Principal Amount of Definitive
Certificates of the same Class in the authorized denominations. Until so
exchanged, the temporary Certificates shall in all respects be entitled to the
same benefits under this Agreement as Definitive Certificates of the same Class.
Section 3.08. Appointment of Paying Agent. The Trustee may appoint a
Paying Agent (which may be the Trustee) for the purpose of making distributions
to Certificateholders hereunder. The Trustee shall cause such Paying Agent to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent will hold all sums held by
it for the payment to Certificateholders in an Eligible Account in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to the Certificateholders. All funds remitted by the Trustee to any such Paying
Agent for the purpose of making distributions shall be paid to
Certificateholders on each Distribution Date and any amounts not so paid shall
be returned on such Distribution Date to the Trustee. If the Paying Agent is not
the Trustee, the Trustee shall cause to be remitted to the Paying Agent on or
before the Business Day prior to each Distribution Date, by wire transfer in
immediately available funds, the funds to be distributed on such Distribution
Date. Any Paying Agent shall be either a bank or trust company or otherwise
authorized under law to exercise corporate trust powers.
Section 3.09. Book-Entry Certificates. (a) Each Class of Book-Entry
Certificates, upon original issuance, shall be issued in the form of one or more
typewritten Certificates representing the Book-Entry Certificates, to be
delivered to The Depository Trust Company, the initial Clearing Agency, by, or
on behalf of, the Depositor. The Book-Entry Certificates shall initially be
registered on the Certificate Register in the name of the nominee of the
Clearing Agency, and no Certificate Owner will receive a Definitive Certificate
representing such Certificate Owner's interest in the Book-Entry Certificates,
except as provided in Section 3.09(c). Unless Definitive Certificates have been
issued to Certificate Owners of Book-Entry Certificates pursuant to Section
3.09(c):
(i) the provisions of this Section 3.09 shall be in full force and
effect;
(ii) the Depositor, the Paying Agent, the Registrar and the Trustee
may deal with the Clearing Agency for all purposes (including the making of
distributions on the Book-Entry Certificates) as the authorized representatives
of the Certificate Owners and the Clearing Agency shall be responsible for
crediting the amount of such distributions to the accounts of such Persons
entitled thereto, in accordance with the Clearing Agency's normal procedures;
(iii) to the extent that the provisions of this Section 3.09 conflict
with any other provisions of this Agreement, the provisions of this Section 3.09
shall control; and
(iv) the rights of Certificate Owners shall be exercised only through
the Clearing Agency and the Clearing Agency Participants and shall be limited to
those established by law and agreements between such Certificate Owners and the
Clearing Agency and/or the Clearing Agency Participants. Unless and until
Definitive Certificates are issued pursuant to Section 3.09(c), the initial
Clearing Agency will make book-entry transfers among the Clearing Agency
Participants and receive and transmit distributions of principal of and interest
on the Book-Entry Certificates to such Clearing Agency Participants.
(b) Whenever notice or other communication to the Certificateholders
is required under this Agreement, unless and until Definitive Certificates shall
have been issued to Certificate Owners pursuant to Section 3.09(c), the Trustee
shall give all such notices and communications specified herein to be given to
Holders of the Book-Entry Certificates to the Clearing Agency.
(c) If (i) (A) the Depositor advises the Trustee in writing that the
Clearing Agency is no longer willing or able to discharge properly its
responsibilities with respect to the Book-Entry Certificates, and (B) the
Trustee or the Depositor is unable to locate a qualified successor, (ii) the
Depositor, at its option, advises the Trustee in writing that it elects to
terminate the book-entry system through the Clearing Agency or (iii) after the
occurrence of an Event of Default, Certificate Owners representing beneficial
interests aggregating not less than 50% of the Class Certificate Principal
Amount of a Class of Book-Entry Certificates identified as such to the Trustee
by an Officer's Certificate from the Clearing Agency advise the Trustee and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no longer in
the best interests of the Certificate Owners of a Class of Book-Entry
Certificates, the Trustee shall notify or cause the Certificate Registrar to
notify the Clearing Agency to effect notification to all Certificate Owners,
through the Clearing Agency, of the occurrence of any such event and of the
availability of Definitive Certificates to Certificate Owners requesting the
same. Upon surrender to the Trustee of the Book-Entry Certificates by the
Clearing Agency, accompanied by registration instructions from the Clearing
Agency for registration, the Trustee shall issue the Definitive Certificates.
Neither the Depositor nor the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the Clearing
Agency shall be deemed to be imposed upon and performed by the Trustee, to the
extent applicable, with respect to such Definitive Certificates and the Trustee
shall recognize the holders of the Definitive Certificates as Certificateholders
hereunder. In addition, any Class M-2 or Class B Certificate transferred to an
entity other than a "Qualified Institutional Buyer" under the Securities Act of
1933, as amended, shall be made solely through delivery to the transferee of a
Definitive Certificate. ARTICLE IV.
ADMINISTRATION OF THE TRUST FUND
Section 4.01. [Reserved]
Section 4.02. [Reserved]
Section 4.03. Reports to Certificateholders. (a) On each Distribution
Date, the Trustee shall deliver or cause to be delivered by first class mail to
each Certificateholder a written report setting forth the following information,
which information the Master Servicer will determine (on the basis of
information obtained from the Servicers) and deliver to the Bond Trustee who in
turn, will deliver to the Trustee no later than one Business Day prior to such
Distribution Date:
(i) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates, to the extent
applicable, allocable to principal on the Underlying Bond;
(ii) the aggregate amount of the distribution to be made on such
Distribution Date to the Holders of each Class of Certificates (other than the
Class O Certificate) allocable to interest;
(iii) the amount, if any, of any distribution to the Holders of the
Class X Certificate and the Class O Certificate;
(iv) (A) the aggregate amount of any Advances required to be made by
or on behalf of the Master Servicer or any Servicer (or the Bond Trustee) with
respect to such Distribution Date, (B) the aggregate amount of such Advances
actually made, and (C) the amount, if any, by which (A) above exceeds (B) above;
(v) the Aggregate Loan Balance as of the close of business on the last
day of the related Collection Period, after giving effect to payments allocated
to principal reported under clause (i) above;
(vi) the Class Certificate Principal Amount (or Aggregate Notional
Amount) of each Class of Certificates, to the extent applicable, as of such
Distribution Date after giving effect to payments allocated to principal
reported under clause (i) above, separately identifying any reduction of any of
the foregoing Certificate Principal Amounts due to Applied Loss Amounts:
(vii) any Realized Losses realized with respect to the Mortgage Loans
(x) in the applicable Prepayment Period and (y) in the aggregate since the
Cut-off Date; (viii) the amount of the Master Servicing Fees, Servicing Fees and
Trustee Fees and expenses paid during the Collection Period to which such
distribution relates;
(ix) the number and aggregate Scheduled Principal Balance of Mortgage
Loans, as reported to the Bond Trustee by the Master Servicer, (a) remaining
outstanding (b) delinquent 30 to 59 days on a contractual basis, (c) delinquent
60 to 89 days on a contractual basis, (d) delinquent 90 or more days on a
contractual basis, and (e) as to which foreclosure proceedings have been
commenced as of the close of business on the last Business Day of the calendar
month immediately preceding the month in which such Distribution Date occurs;
(x) the deemed principal balance of each REO Property as of the close
of business on the last Business Day of the calendar month immediately preceding
the month in which such Distribution Date occurs;
(xi) with respect to any Mortgage Loan that became an REO Property
during the preceding calendar month, the principal balance of such Mortgage Loan
and the number of such Mortgage Loans as of the close of business on the
Distribution Date in such preceding month;
(xii) with respect to substitution of Mortgage Loans in the preceding
calendar month, the Scheduled Principal Balance of each Deleted Mortgage Loan,
and of each Replacement Mortgage Loan;
(xiii) the aggregate outstanding Carryforward Interest, Net Prepayment
Interest Shortfalls, Basis Risk Shortfalls and Unpaid Basis Risk Shortfalls, if
any, if any, for each Class of Certificates, after giving effect to the
distribution made on such Distribution Date;
(xiv) the Certificate Interest Rate applicable to such Distribution
Date with respect to each Class of Certificates;
(xv) if applicable, the amount of any shortfall (i.e., the difference
between the aggregate amounts of principal and interest which Certificateholders
would have received if there were sufficient available amounts in the
Certificate Account and the amounts actually distributed); and
(xvi) any other "loan-level" information for any Mortgage Loans that
are delinquent 90 or more days on a contractual basis and any REO Property held
by the Trust that is reported by the Master Servicer to the Trustee;
(xvii) the Bond Principal Balance (after giving effect to payments to
be made on such Distribution Date in respect of the Underlying Bond);
(xviii) whether or not the Underlying Bond is to be redeemed on such
Distribution Date;
(xix) the Bond Overcollateralization Amount as of such Distribution
Date (after giving effect to distributions to be made in respect of the
Underlying Bond on such Distribution Date);
(xx) the Excess Mortgage Amount, if any, to be paid on such
Distribution Date;
(xxi) the Required Reserve Fund Amount for such Distribution Date
(after giving effect to any distributions to be made on such Distribution Date
but before giving effect to any deposit to be made to the Reserve Fund on such
Distribution Date);
(xxii) the amount, if any, to be deposited to the Reserve Fund on such
Distribution Date; and
(xxiii) the amount on deposit in the Reserve Fund (after giving effect
to any deposit to be made thereto on such Distribution Date).
In the case of information furnished pursuant to subclauses (i), (ii)
and (viii) above, the amounts shall be expressed as a dollar amount per $1,000
of original principal amount of Certificates.
In preparing or furnishing the foregoing information to the Trustee,
the Master Servicer shall be entitled to rely conclusively on the accuracy of
the information or data regarding the Mortgage Loans and the related REO
Property that has been provided to the Master Servicer by each Servicer, and the
Master Servicer shall not be obligated to verify, recompute, reconcile or
recalculate any such information or data.
On each Distribution Date, the Trustee shall also deliver or cause to
be delivered by first class mail a copy of the above-described written report,
to the following addresses: (i) American Residential Eagle, Inc., 000 Xxxxxx
Xxxx Xxxxxx, Xxxxx 000, Xxx Xxx, Xxxxxxxxxx 00000, Attention: Xxxx Xxxxxx, or to
such other address as the Depositor may designate, (ii) Xxxxxx Brothers Inc.,
Mortgage-Backed Securities Group, 0 Xxxxx Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 and (iii) Bloomberg L.P., 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
(b) Upon the reasonable advance written request of any Certificateholder that is
a savings and loan, bank or insurance company, which request, if received by the
Trustee, will be promptly forwarded to the Master Servicer, the Trustee will
cause the Master Servicer to provide, or cause to be provided, (or, to the
extent that such information or documentation is not required to be provided by
a Servicer under the applicable Servicing Agreement, shall use reasonable
efforts to obtain such information and documentation from such Servicer, and
provide) to such Certificateholder such reports and access to information and
documentation regarding the Mortgage Loans as such Certificateholder may
reasonably deem necessary to comply with applicable regulations of the Office of
Thrift Supervision or its successor or other regulatory authorities with respect
to an investment in the Certificates; provided, however, that the Master
Servicer shall be entitled to be reimbursed by such Certificateholder for such
Master Servicer's actual expenses incurred in providing such reports and access.
(c) Within 90 days, or such shorter period as may be required by statute or
regulation, after the end of each calendar year, the Trustee shall send to each
Person who at any time during the calendar year was a Certificateholder of
record, and make available to Certificate Owners (identified as such by the
Clearing Agency) in accordance with applicable regulations, a report summarizing
the items provided to Certificateholders pursuant to Section 4.03(a) on an
annual basis as may be required to enable such Holders to prepare their federal
income tax returns. Such information shall include the amount of original issue
discount accrued on each Class of Certificates and information regarding the
expenses of the Trust Fund. The Master Servicer shall provide the Trustee with
such information as is necessary for the Trustee to prepare such reports.
Section 4Certificate Account. (a) The Trustee shall establish and maintain in
its name, as trustee, a special deposit trust account (the "Certificate
Account"), to be held in trust for the benefit of the Certificateholders until
disbursed pursuant to the terms of this Agreement. The Certificate Account shall
be an Eligible Account. If the existing Certificate Account ceases to be an
Eligible Account, the Trustee shall establish a new Certificate Account that is
an Eligible Account within 20 Business Days and transfer all funds on deposit in
such existing Certificate Account into such new Certificate Account. The
Certificate Account shall relate solely to the Certificates issued hereunder and
funds in the Certificate Account shall be held separate and apart from and shall
not be commingled with any other monies including, without limitation, other
monies of the Trustee held under this Agreement.
(b) The Trustee shall cause to be deposited into the Certificate
Account on the day on which, or, if such day is not a Business Day, the Business
Day immediately following the day on which, any monies are remitted by the Bond
Trustee to the Trustee, all such amounts. The Trustee shall make withdrawals
from the Certificate Account only for the following purposes:
(i) to withdraw amounts deposited in the Certificate Account in error;
(ii) to pay itself any investment income earned with respect to funds
in the Certificate Account invested in Eligible Investments as set forth in
subsection (c) below, and to make payment to itself and others pursuant to any
provision of this Agreement;
(iii) to make distributions to the Certificateholders pursuant to
Article V; and
(iv) to clear and terminate the Certificate Account pursuant to
Section 7.02. (c) The Trustee shall invest, or cause to be invested, funds held
in the Certificate Account in Eligible Investments (which may be obligations of
the Trustee). All such investments must mature no later than the next
Distribution Date, and shall not be sold or disposed of prior to their maturity.
All such Eligible Investments will be made in the name of the Trustee (in its
capacity as such) or its nominee. All income and gain realized from any such
investment shall be compensation for the Trustee and shall be subject to its
withdrawal on order from time to time. The amount of any losses incurred in
respect of any such investments shall be paid by the Trustee for deposit in the
Certificate Account out of its own funds, without any right of reimbursement
therefor, immediately as realized.
Section 4.05. Determination of LIBOR. (a) If the outstanding
Certificates include any LIBOR Certificates, then on each LIBOR Determination
Date the Master Servicer shall determine LIBOR on the basis of the offered LIBOR
quotations of the Reference Banks as of 11:00 a.m. London time on such LIBOR
Determination Date as follows:
(i) If on any LIBOR Determination Date two or more of the Reference
Banks provide such offered quotations, LIBOR for the next Accrual Period will be
the arithmetic mean of such offered quotations (rounding such arithmetic mean if
necessary to the nearest five decimal places);
(ii) If on any LIBOR Determination Date only one or none of the
Reference Banks provides such offered quotations, LIBOR for the next Accrual
Period will be whichever is the higher of (x) LIBOR as determined on the
previous LIBOR Determination Date or (y) the Reserve Interest Rate. The "Reserve
Interest Rate" will be either (A) the rate per annum which the Master Servicer
determines to be the arithmetic mean (rounding such arithmetic mean if necessary
to the nearest five decimal places) of the one-month Eurodollar lending rates
that New York City banks selected by the Master Servicer are quoting, on the
relevant LIBOR Determination Date, to the principal London offices of at least
two leading banks in the London interbank market or (B) in the event that the
Master Servicer can determine no such arithmetic mean, the lowest one-month
Eurodollar lending rate that the New York City banks selected by the Master
Servicer are quoting on such LIBOR Determination Date to leading European banks;
and
(iii) If on any LIBOR Determination Date the Master Servicer is
required but is unable to determine the Reserve Interest Rate in the manner
provided in paragraph (ii) above, LIBOR for the next Accrual Period will be
LIBOR as determined on the previous LIBOR Determination Date or, in the case of
the first LIBOR Determination Date, the Initial LIBOR Rate.
(b) The establishment of LIBOR by the Master Servicer and the Master
Servicer's subsequent calculation of the Certificate Interest Rate or Rates
applicable to the LIBOR Certificates for the relevant Accrual Period, in the
absence of manifest error, will be final and binding. In all cases, the Master
Servicer may conclusively rely on quotations of LIBOR for the Reference Banks as
such quotations appear on the display designated "LIUS01M" on the Bloomberg
Financial Markets Commodities News.
(c) As used herein, "Reference Banks" shall mean four leading banks
engaged in transactions in Eurodollar deposits in the international Eurocurrency
market (i) with an established place of business in London, England, (ii) whose
quotations appear on the "Bloomberg Screen LIUS01M Index Page" (as described in
the definition of LIBOR) on the applicable LIBOR Determination Date and (iii)
which have been designated as such by the Trustee and are able and willing to
provide such quotations to the Trustee on each LIBOR Determination Date. The
Reference Banks initially shall be: Barclay's plc, Bank of Tokyo, National
Westminster Bank and Trust Company and Bankers Trust Company. If any of the
initial Reference Banks should be removed from the Bloomberg Screen LIUS01M
Index Page or in any other way fail to meet the qualifications of a Reference
Bank, the Trustee shall use its best efforts to designate alternate Reference
Banks.
(d) If (i) with respect to any LIBOR Determination Date LIBOR is
determined pursuant to clause (a)(iii) of this Section and (ii) on the next
succeeding LIBOR Determination Date LIBOR would, without giving effect to this
paragraph (d), be determined pursuant to such clause (a)(iii), then the Trustee
shall select an alternative interest rate index over which the Trustee has no
control that is used for determining Eurodollar lending rates and is calculated
and published (or otherwise made available) by an independent third party, and
the Trustee shall direct the Master Servicer to use such alternative interest
rate index for calculating LIBOR for all purposes hereof.
Section 4.06. [Reserved]
ARTICLE V.
DISTRIBUTIONS TO HOLDERS OF CERTIFICATES
Section 5.01. Distributions Generally. (a) Subject to Section 7.01
respecting the final distribution on the Certificates, on each Distribution Date
the Trustee or the Paying Agent shall make distributions in accordance with this
Article V. Such distributions shall be made by check mailed to each
Certificateholder's address as it appears on the Certificate Register of the
Certificate Registrar (which shall initially be the Trustee) or, upon written
request made to the Trustee at least three Business Days prior to the related
Distribution Date by any Certificateholder owning an aggregate initial
Certificate Principal Amount of at least $2,500,000, or, in the case of a Class
X Certificate, a Percentage Interest of 100%, by wire transfer in immediately
available funds to an account specified in the request and at the expense of
such Certificateholder; provided, however, that the final distribution in
respect of any Certificate shall be made only upon presentation and surrender of
such Certificate at the Corporate Trust Office. Wire transfers will be made at
the expense of the Holder requesting such wire transfer by deducting a wire
transfer fee from the related distribution. Notwithstanding such final payment
of principal of any of the Certificates, the Ownership Certificates will remain
outstanding until the termination of the FASIT and the payment in full of all
other amounts due with respect to the Ownership Certificates and at such time
such final payment in retirement of any Ownership Certificates will be made only
upon presentation and surrender of such Certificate at the Corporate Trust
Office of the Trustee or at the office of the New York Presenting Agent. If any
payment required to be made on the Certificates is to be made on a day that is
not a Business Day, then such payment will be made on the next succeeding
Business Day.
(b) All distributions or allocations made with respect to
Certificateholders within each Class on each Distribution Date shall be
allocated among the outstanding Certificates in such Class equally in proportion
to their respective initial Class Certificate Principal Amounts (or initial
Notional Amounts).
Section 5.02. Distributions from the Certificate Account. (a) On each
Distribution Date the Trustee (or the Paying Agent on behalf of the Trustee)
shall withdraw from the Certificate Account the Total Distribution Amount for
such date and shall distribute such amount as specified in this Section.
(b) On each Distribution Date, the Interest Distribution Amount for
such date will be distributed in the following order of priority:
(i) pro rata, to the Class A-1 and Class A-2 Certificates, Current
Interest for each such Class and such Distribution Date and any Carryforward
Interest for each such Class and such Distribution Date;
(ii) to the Class M-1 Certificates, Current Interest for such Class
and such Distribution Date;
(iii) to the Class M-2 Certificates, Current Interest for such Class
and such Distribution Date;
(iv) to the Class B Certificates, Current Interest for such Class and
such Distribution Date;
(v) pro rata, to the Class A-1 and Class A-2 Certificates, any Basis
Risk Shortfall and Unpaid Basis Risk Shortfall for each such Class and such
Distribution Date;
(vi) to the Class M-1 Certificates, any Basis Risk Shortfall and
Unpaid Basis Risk Shortfall for such Class and such Distribution Date; (vii) to
the Class M-2 Certificates, any Basis Risk Shortfall and Unpaid Basis Risk
Shortfall for such Class and such Distribution Date;
(viii) to the Class B Certificates, any Basis Risk Shortfall and
Unpaid Basis Risk Shortfall for such Class and such Distribution Date;
(ix) to the Class M-1 Certificates, any Carryforward Interest for such
Class and such Distribution Date;
(x) to the Class M-2 Certificates, any Carryforward Interest for such
Class and such Distribution Date;
(xi) to the Class B Certificates, any Carryforward Interest for such
Class and such Distribution Date;
(xii) pro rata, to each Class of Certificates, any Adjusted Prepayment
Interest Shortfalls previously allocated thereto and remaining unpaid; and
(xiii) subject to the last paragraph of this Section 5.02(b), to the
Class X Certificate, Current Interest for such Class on such date.
To the extent a Bond Overcollateralization Deficiency exists after
distributions on the Underlying Bond required for such Distribution Date,
amounts otherwise distributable to the holder of the Class X Certificate
pursuant to clause (xiii) of this Section 5.02(b) shall be held on deposit in
the Reserve Fund until the amount in the Reserve Fund equals the Required
Reserve Fund Amount.
(c) On each Distribution Date, the Trustee shall distribute the
Principal Distribution Amount for such date as follows:
(i) On each Distribution Date (a) prior to the Stepdown Date or (b)
with respect to which a Trigger Event has occurred, the Principal Distribution
Amount for such date will be distributed in the following order of priority:
(1) to the Class A-1 Certificates, until the Class
Certificate Principal Amount of such Class has been reduced to zero;
(2) to the Class A-2 Certificates, until the Class
Certificate Principal Amount of such Class has been reduced to zero;
(3) to the Class M-1 Certificates, until the Class
Certificate Principal Amount of such Class has been reduced to zero;
(4) to the Class M-2 Certificates, until the Class
Certificate Principal Amount of such Class has been reduced to zero;
and
(5) to the Class B Certificates, until the Class Certificate
Principal Amount of such Class has been reduced to zero;
(ii) On each Distribution Date (a) on or after the Stepdown Date and
(b) with respect to which a Trigger Event has not occurred, the Principal
Distribution Amount for such date will be distributed in the following order of
priority:
(1) to the Class A-1 and Class A-2 Certificates, an amount
equal to the lesser of (x) the Principal Distribution Amount for such
Distribution Date and (y) the Senior Principal Distribution Amount for
such date, in the following order of priority:
first, to the Class A-1 Certificates, until the Class
Certificate Principal Amount of such Class has been
reduced to zero, and
second, to the Class A-2 Certificates, until the
Class Certificate Principal Amount of such Class has
been reduced to zero;
(2) to the Class M-1 Certificates, an amount equal to the
lesser of (x) the excess of (A) the Principal Distribution Amount for
such Distribution Date over (B) the amount distributed to the Class
A-1 and Class A-2 Certificates on such date pursuant to clause (1)
above and (y) the Class M-1 Principal Distribution Amount for such
date, until the Class Certificate Principal Amount of such Class has
been reduced to zero;
(3) to the Class M-2 Certificates, an amount equal to the
lesser of (x) the excess of (A) the Principal Distribution Amount for
such Distribution Date over (B) the amount distributed to the Class
A-1, Class A-2 and Class M-1 Certificates on such date pursuant to
clauses (1) and (2) above and (y) the Class M-2 Principal Distribution
Amount for such date, until the Class Certificate Principal Amount of
such Class has been reduced to zero; and
(4) to the Class B Certificates, an amount equal to the
lesser of (x) the excess of (A) the Principal Distribution Amount for
such Distribution Date over (B) the amount distributed to the Class
X-0, Xxxxx X-0, Class M-1 and Class M-2 Certificates on such date
pursuant to clauses (1), (2) and (3) above and (y) the Class B
Principal Distribution Amount for such date, until the Class
Certificate Principal Amount of such Class has been reduced to zero.
Notwithstanding the foregoing, on any Distribution Date on which the Class
Certificate Principal Amount of each Class of Certificates having a higher
priority of distribution has been reduced to zero, any remaining Principal
Distribution Amount will be distributed to the remaining Classes of
Certificates, in the order of priority set forth above, until the Class
Certificate Principal Amount of each such Class has been reduced to zero.
(d) On each Distribution Date, before the distribution of amounts
pursuant to subsection (c) above, any Bond Deferred Amounts received in respect
of the Underlying Bond shall be distributed in the following order of priority:
(i) pro rata, to the Class A-1 Certificates and Class A-2
Certificates, in respect of any Deferred Amounts previously allocated to such
Certificates and not previously reimbursed, until such Deferred Amounts so
allocated have been reduced to zero;
(ii) to the Class M-1 Certificates, in respect of any Deferred Amounts
previously allocated to the Class M-1 Certificates and not previously
reimbursed, until such Deferred Amounts so allocated have been reduced to zero;
(iii) to the Class M-2 Certificates and not previously reimbursed, in
respect of any Deferred Amounts previously allocated to the Class M-2
Certificates, until such Deferred Amounts so allocated have been reduced to
zero;
(iv) to the Class B Certificates and not previously reimbursed, in
respect of any Deferred Amounts previously allocated to the Class B
Certificates, until such Deferred Amounts so allocated have been reduced to
zero;
(v) to the Reserve Fund, up to an amount equal to the amount, if any,
by which the Required Reserve Fund Amount exceeds amounts on deposit in the
Reserve Fund, in respect of any amounts previously distributed from the Reserve
Fund in order to pay Deferred Amounts (any such amount so deposited in the
Reserve Fund, the "Reserve Fund Deferred Amount Deposit"); and (vi) subject to
maintenance of the Reserve Fund in an amount equal to the Required Reserve Fund
Amount, to the Class X Certificates, any remaining amount.
Section 5.03. Allocation of Losses. On each Distribution Date, the
Class Certificate Principal Amount of each Class of Certificates will be reduced
by the amount of any Applied Loss Amount for such date, in the following order
of priority:
(i) to the Class B Certificates, until the Class Certificate Principal
Amount thereof has been reduced to zero;
(ii) to the Class M-2 Certificates, until the Class Certificate
Principal Amount thereof has been reduced to zero;
(iii) to the Class M-1 Certificates, until the Class Certificate
Principal Amount thereof has been reduced to zero; and
(iv) pro rata to the Class A-1 and Class A-2 Certificates, until the
Class Certificate Principal Balance of each such Class has been reduced to zero.
Section 5[Reserved]
Section 5.05. [Reserved]
Section 5.06. Reserve Fund (a) On the Closing Date, the Trustee shall
establish and maintain a trust account entitled "Reserve Fund for the benefit of
the holders of the Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class B
Certificates" (the "Reserve Fund"). The Reserve Fund shall be an Eligible
Account included as part of the Trust Fund Assets, and funds on deposit therein
shall be held separate and apart from, and shall not be commingled with, any
other moneys, including, without limitation, other moneys of the Trustee held
pursuant to this Agreement. The Reserve Fund shall not for any reason be an
asset of the FASIT created hereby. The Class X Certificateholder shall be
considered the owner of the Reserve Fund for federal income tax purposes.
(b) On each Distribution Date, to the extent of funds available
therefore pursuant to the last paragraph of Section 5.02(b) and Section
5.02(d)(v), the Trustee shall transfer from the Certificate Account to the
Reserve Fund, an amount equal to the sum of (i) the amount, if any, necessary to
cause the amounts on deposit in the Reserve Fund to equal the Required Reserve
Fund Amount and (ii) the Reserve Fund Deferred Amount Deposit. The Trustee shall
make withdrawals from the Reserve Fund to make distributions pursuant to
paragraph (d) of this Section 5.06.
(c) Funds on deposit in the Reserve Fund may be invested by the
Trustee in Permitted Investments at the written direction of the Class X
Certificateholder. Net investment earnings on such investments shall be
distributed to the Class X Certificateholder pursuant to Section 5.06(d)(xv).
(d) On each Distribution Date, amounts on deposit in the Reserve Fund
will be applied, to the extent that any of the amounts listed below remains
unpaid after distributions on such Distribution Date of the Interest
Distribution Amount and Principal Distribution Amount pursuant to Section
5.02(b) and Section 5.02(c) hereof, in the following order of priority:
(i) pro rata, to the Class A-1 and Class A-2 Certificates, any Current
Interest for each such Class and such Distribution Date and any Carryforward
Interest for each such Class and such Distribution Date;
(ii) to the Class M-1 Certificates, Current Interest for such Class
and such Distribution Date;
(iii) to the Class M-2 Certificates, Current Interest for such Class
and such Distribution Date;
(iv) to the Class B Certificates, Current Interest for such Class and
such Distribution Date;
(v) pro rata, to the Class A-1 and Class A-2 Certificates, any Basis
Risk Shortfall and Unpaid Basis Risk Shortfall for each such Class and such
Distribution Date;
(vi) to the Class M-1 Certificates, any Basis Risk Shortfall and
Unpaid Basis Risk Shortfall for such Class and such Distribution Date;
(vii) to the Class M-2 Certificates, any Basis Risk Shortfall and
Unpaid Basis Risk Shortfall for such Class and such Distribution Date;
(viii) to the Class B Certificates, any Basis Risk Shortfall and
Unpaid Basis Risk Shortfall for such Class and such Distribution Date;
(ix) to the Class M-1 Certificates, any Carryforward Interest for such
Class and such Distribution Date;
(x) to the Class M-1 Certificates, any Deferred Amounts previously
allocated to such Class;
(xi) to the Class M-2 Certificates, any Carryforward Interest for such
Class and such Distribution Date;
(xii) to the Class M-2 Certificates, any Deferred Amounts previously
allocated to such Class;
(xiii) to the Class B Certificates, any Carryforward Interest for such
Class and such Distribution Date;
(xiv) to the Class B Certificates, any Deferred Amounts previously
allocated to such Class; and
(xv) to the Class X Certificates, any remaining amount in excess of
the Required Reserve Fund Amount.
ARTICLE VI.
CONCERNING THE TRUSTEE; EVENTS OF DEFAULT
Section 6.01. Events of Default. Upon the occurrence of any Event of
Default, the Trustee, as the holder of the Underlying Bond, will follow the
procedures set forth in this Article.
Section 6.02. Acceleration of Maturity. The Trustee will promptly
furnish to the Depositor and the Certificateholders notice of any Event of
Default known to the Trustee. Upon the Trustee's receipt of a direction to take
such action from the Holders of Senior Certificates evidencing more than 66 2/3%
of all Voting Interests, the Trustee shall, as the holder of the Underlying
Bond, deliver a notice in writing to the Bond Issuer and the Bond Trustee
declaring the Underlying Bond to be immediately due and payable.
At any time after an acceleration of the Underlying Bond has been made,
the Trustee further agrees to deliver a notice in writing to the Bond Issuer and
the Bond Trustee rescinding and annulling such acceleration and its
consequences, upon the Trustee's receipt of a direction to take such action from
the Holders of Senior Certificates evidencing more than 66 2/3% of all Voting
Interests.
Section 6.03. Control by Certificateholders. The Trustee agrees, as
the holder of the Underlying Bond, to instruct the Bond Trustee as to the time,
method and place of conducting any proceeding for any remedy available to the
Bond Trustee or exercising any power or trust conferred on the Bond Trustee,
subject to the limitations and qualifications of Section 5.14 of the Indenture,
upon receipt by the Trustee of a direction to take such action from the Holders
of Senior Certificates evidencing more than 66 2/3% of all Voting Interests.
Section 6.04. Waiver of Past Defaults. The Holders of Senior
Certificates evidencing more than 66 2/3% of all Voting Interests may on behalf
of the Holders of all Certificates waive any past Event of Default and its
consequences, except an Event of Default:
(1) in payment of any installment of principal, or interest on, the
Underlying Bond; or
(2) in respect of a covenant or provision hereof which under Section
9.02 of the Indenture cannot be modified or amended without the consent of each
holder of the Underlying Bond affected.
Upon any such waiver, such Event of Default shall cease to exist, and
any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of the Indenture; but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent therefrom.
Section 6.05. Undertaking for Costs. All parties to this Agreement
agree, and each Holder of any Certificate by his or her acceptance thereof shall
be deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under the Indenture, or in any
suit against the Bond Trustee for any action taken, suffered or omitted by it as
Bond Trustee, the filing by any party litigant in such suit of an undertaking to
pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the provisions of this
Section shall not apply to any suit instituted by the Bond Trustee, to any suit
instituted by any Certificateholder, or group of Certificateholders, acting
through the Trustee as herein provided, holding in the aggregate Certificates
evidencing more than 10% of all Voting Interests.
Section 6.06. Sale of Trust Estate. The Trustee, as holder of the
Underlying Bond, agrees to deliver a notice in writing to the Bond Trustee of
the consent to, or a direction to the Bond Trustee to make, a private sale of
all or a portion of the collateral for the Underlying Bond, pursuant to Section
5.18(b) of the Indenture, upon receipt by the Trustee of a direction to take
such action by the Holders of Certificates evidencing 100% of all Voting
Interests.
The Trustee, as holder of the Underlying Bond, further agrees to
deliver a notice in writing to the Bond Trustee of the consent to, or a
direction to the Bond Trustee to make, a public sale of all or a portion of the
collateral for the Underlying Bond, pursuant to Section 5.18(c) of the
Indenture, upon receipt by the Trustee of a direction to take such action by the
Holders of Certificates evidencing 100% of all Voting Interests.
Section 6.07. Duties of Trustee. (a) The Trustee, except during the
occurrence of one or more of the Events of Default referred to in Section 6.01
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. In the case of the occurrence of one or more of the
Events of Default referred to in Section 6.01 above, the Trustee shall exercise
such of the rights and powers vested in it by this Agreement and use the same
degree of care and skill in their exercise as a prudent investor would exercise
or use under the circumstances in the conduct of such investor's own affairs.
Any permissive right of the Trustee provided for in this Agreement shall not be
construed as a duty of the Trustee.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they are in
the form required by this Agreement; provided, however, that the Trustee shall
not be responsible for the accuracy or content of any such resolution,
certificate, statement, opinion, report, document, order or other instrument
furnished by the Master Servicer, to the Trustee pursuant to this Agreement or
the Master Servicing Agreement.
(c) The Trustee shall not have any liability arising out of or in
connection with this Agreement, except for its negligence or willful misconduct.
No provision of this Agreement shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act or its
own willful misconduct; provided, however, that:
(i) This paragraph (i) shall not be construed to limit the effect of
paragraph (a) of this Section 6.01.
(ii) For all purposes under this Agreement, the Trustee shall not be
deemed to have notice of any event described in Section 6.01 other than a
payment default unless a Responsible Officer assigned to and working in the
Trustee's corporate trust division has actual knowledge thereof or unless
written notice of any event is required at the Corporate Trust Office, and such
notice references the Certificates and this Agreement.
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Holders of Certificates as provided in Section 6.02 and
6.03 hereof;
(iv) No provision of this Agreement shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it; and
(v) The Trustee shall not be responsible for any act or omission of
the Bond Trustee or the Master Servicer.
(d) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in accordance
with the direction of Certificateholders of any Class holding Certificates which
evidence, as to such Class, Percentage Interests aggregating not less than 25%
as to the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred upon the
Trustee, under this Agreement.
(e) The Trustee shall pay, out of its own funds, any fees assessed by
the Rating Agencies after the Closing Date in connection with maintaining the
ratings of the Certificates.
Section 6.08. Certain Matters Affecting the Trustee. Except as
otherwise provided in Section 6.07 hereof:
(i) The Trustee may request, and may rely and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties;
(ii) The Trustee may consult with counsel and any advice of its
counsel or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered or omitted by it hereunder
in good faith and in accordance with such advice or Opinion of Counsel;
(iii) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(iv) Unless a payment default in respect of the Underlying Bond or
other event specified in Section 6.01 shall have occurred and be continuing and
in each case is known to a Responsible Officer of the Trustee, the Trustee shall
not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval, bond or other paper or document (provided the
same appears regular on its face), unless requested in writing to do so by
Holders of at least a majority in Class Certificate Principal Amount (or
Percentage Interest) of each Class of Certificates; provided, however, that, if
the payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such investigation is,
in the opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Agreement, the Trustee may require
reasonable indemnity against such expense or liability or payment of such
estimated expenses as a condition to proceeding. The reasonable expense thereof
shall be paid by the Holders requesting such investigation; and
(v) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys, which agents or attorneys shall have any or all of the rights,
powers, duties and obligations of the Trustee conferred on them by such
appointment provided that the Trustee shall continue to be responsible for its
duties and obligations hereunder.
Section 6.09. Trustee Not Liable for Certificates. The Trustee makes
no representations as to the validity or sufficiency of this Agreement or of the
Certificates (other than the certificate of authentication on the Certificates)
or related document save that the Trustee represents that, assuming due
execution and delivery by the other parties hereto, this Agreement has been duly
authorized, executed and delivered by it and constitutes its valid and binding
obligation, enforceable against it in accordance with its terms except that such
enforceability may be subject to (A) applicable bankruptcy and insolvency laws
and other similar laws affecting the enforcement of the rights of creditors
generally, and (B) general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at law.
Section 6.10. Trustee May Own Certificates. The Trustee and any
Affiliate or agent of the Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates and may transact banking and trust
with the other parties hereto with the same rights it would have if it were not
Trustee or such agent.
Section 6.11. Eligibility Requirements for Trustee. The Trustee
hereunder shall at all times be (i) an institution insured by the FDIC and (ii)
a corporation or national banking association, organized and doing business
under the laws of any State or the United States of America, authorized under
such laws to exercise corporate trust powers, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by federal or state authority. If such corporation or national banking
association publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
corporation or national banking association 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 Trustee shall cease to be eligible in
accordance with provisions of this Section, the Trustee shall resign immediately
in the manner and with the effect specified in Section 6.12.
Section 6.12. Resignation and Removal of Trustee. (a) The Trustee may
at any time resign and be discharged from the trust hereby created by giving
written notice thereof to the Depositor, the Master Servicer and mailing a copy
of such notice to all Holders of record. Upon receiving such notice of
resignation, the Depositor will promptly appoint a successor trustee by written
instrument, one copy of which instrument shall be delivered to the resigning
Trustee and one copy to the successor trustee and one copy to the Master
Servicer. If no successor trustee shall have been so appointed and shall have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time (i) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.11 and shall fail to resign after
written request therefor by the Depositor, (ii) the Trustee shall become
incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, (iii) a tax is
imposed or threatened with respect to the Trust Fund by any state in which the
Trustee or the Trust Fund held by the Trustee is located, or (iv) the continued
use of the Trustee would result in a downgrading of the rating by the Rating
Agencies of any Class of Certificates with a rating, then the Depositor shall
remove the Trustee and appoint a successor trustee by written instrument, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor trustee.
(c) The Holders of more than 50% of the Class Certificate Principal
Amount (or Percentage Interest) of each Class of Certificates may at any time
upon 30 days' written notice to the Trustee and to the Depositor remove the
Trustee by such written instrument, signed by such Holders or their
attorney-in-fact duly authorized, one copy of which instrument shall be
delivered to the Depositor and one copy to the Trustee so removed; the Depositor
shall thereupon use its best efforts to appoint a mutually acceptable successor
trustee in accordance with this Section.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 6.13.
Section 6.13. Successor Trustee. (a) Any successor trustee appointed
as provided in Section 6.06 shall execute, acknowledge and deliver to the
Depositor and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with like
effect as if originally named as trustee herein. The predecessor trustee shall
deliver to the successor trustee and shall duly assign, transfer, deliver and
pay over to the successor trustee the entire Trust Fund Assets, together with
all necessary instruments of transfer and assignment or other documents properly
executed necessary to effect such transfer and such of the record or copies
thereof maintained by the predecessor trustee in the administration hereof as
may be requested by the successor trustee and shall thereupon be discharged from
all duties and responsibilities under this Agreement.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such appointment such successor trustee shall be
eligible under the provisions of Section 6.11.
(c) Upon acceptance of appointment by a successor trustee as provided
in this Section, the Depositor shall mail (or cause the Master Service to mail)
notice of the succession of such trustee hereunder to all Holders of
Certificates at their addresses as shown in the Certificate Register and to the
Rating Agencies. The expenses of such mailing shall be borne by the Depositor.
Section 6.14. Merger or Consolidation of Trustee. Any Person into
which the Trustee may be merged or with which it may be consolidated, or any
Person resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any Persons succeeding to the business of the
Trustee, shall be the successor to the Trustee hereunder, without the execution
or filing of any paper 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 under the provisions of Section 6.05.
Section 6.15. [Reserved] .
Section 6.16. Authenticating Agents. (a) The Trustee may appoint one
or more Authenticating Agents which shall be authorized to act on behalf of the
Trustee in authenticating Certificates. Wherever reference is made in this
Agreement to the authentication of Certificates by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication on behalf of the Trustee by an Authenticating Agent and a
certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent must be a corporation organized
and doing business under the laws of the United States of America or of any
state, having a combined capital and surplus of at least $15,000,000, authorized
under such laws to do a trust business and subject to supervision or examination
by federal or state authorities.
(b) Any Person into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any Person resulting from any
merger, conversion or consolidation to which any Authenticating Agent shall be a
party, or any Person succeeding to the corporate agency business of any
Authenticating Agent, shall continue to be the Authenticating Agent without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
(c) Any Authenticating Agent may at any time resign by giving at least
30 days' advance written notice of resignation to the Trustee and the Depositor.
The Trustee may at any time terminate the agency of any Authenticating Agent by
giving written notice of termination to such Authenticating Agent and the
Depositor. Upon receiving a notice of resignation or upon such a termination, or
in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.16, the Trustee may appoint a
successor Authenticating Agent, shall give written notice of such appointment to
the Depositor and shall mail notice of such appointment to all Holders of
Certificates. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all the rights, powers, duties
and responsibilities of its predecessor hereunder, with like effect as if
originally named as Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section 6.16. No
Authenticating Agent shall have responsibility or liability for any action taken
by it as such at the direction of the Trustee. Any Authenticating Agent shall be
entitled to reasonable compensation for its services and, if paid by the
Trustee, it shall be a reimbursable expense.
Section 6.17. Indemnification of Trustee. The Trustee and its
directors, officers, employees and agents shall be entitled to indemnification
from the Trust Fund for any loss, liability or expense incurred in connection
with any legal proceeding and incurred without negligence or willful misconduct
on their part, arising out of, or in connection with, the acceptance or
administration of the trusts created hereunder, including the costs and expenses
of defending themselves against any claim in connection with the exercise or
performance of any of their powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee shall have given the
Depositor and the Holders written notice thereof promptly after the Trustee
shall have knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee shall
cooperate and consult fully with the Depositor in preparing such defense; and
(iii) notwithstanding anything to the contrary in this Section 6.16,
the Trust Fund shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Depositor, which consent
shall not be unreasonably withheld.
The provisions of this Section 6.17 shall survive any termination of
this Agreement and the resignation or removal of the Trustee and shall be
construed to include, but not be limited to any loss, liability or expense under
any environmental law.
Section 6.18. Fees and Expenses of Trustee. The Trustee shall be
entitled to receive, and is authorized to pay to itself the Trustee Fee and as
additional compensation any amount of income or gain earned from the investment
of funds in the Certificate Account.
Section 6.19. Collection of Monies; Remedies. Except as otherwise
expressly provided in this Agreement, the Trustee may demand payment or delivery
of, and shall receive and collect, all money and other property payable to or
receivable by the Trustee pursuant to this Agreement. The Trustee shall hold all
such money and property received by it as part of the Trust Fund Assets and
shall distribute it as provided in this Agreement. If the Trustee shall not have
timely received amounts to be remitted with respect to the Underlying Bond, the
Trustee shall request that such distribution be made as promptly as practicable
or legally permitted. If the Trustee shall subsequently receive any such amount,
it may withdraw such request.
Section 6.20. Limitation of Liability. The Certificates are executed
by the Trustee, not in its individual capacity but solely as Trustee of the
Trust, in the exercise of the powers and authority conferred and vested in it by
this Agreement. Each of the undertakings and agreements made on the part of the
Trustee in the Certificates is made and intended not as a personal undertaking
or agreement by the Trustee but is made and intended for the purpose of binding
only the Trust.
Section 6.21. Trustee May Enforce Claims Without Possession of
Certificates. All rights of action and claims under this Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and such preceding instituted by the Trustee shall
be brought in its own name or in its capacity as Trustee. Any recovery of
judgment shall, after provision for the payment of the reasonable compensation,
expenses, disbursement and advances of the Trustee, its agents and counsel, be
for the ratable benefit or the Certificateholders in respect of which such
judgment has been recovered.
Section 6.22. Waiver of Bond Requirement. The Trustee shall be
relieved of, and each Certificateholder hereby waives, any requirement of any
jurisdiction in which the Trust, or any part thereof, may be located that the
Trustee post a bond or other surety with any court, agency or body whatsoever.
Section 6.23. Waiver of Inventory, Accounting and Appraisal
Requirement. The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
ARTICLE VII.
PURCHASE AND TERMINATION OF THE
TRUST FUND; PURCHASE OF CERTIFICATES
Section 7.01. Termination of Trust Fund Upon Maturity or Redemption of
the Underlying Bond. The obligations and responsibilities of the Trustee (other
than the obligation of the Trustee to make payments to Certificateholders as set
forth in Section 7.02) shall terminate in accordance with Section 7.02 or on the
final payment or earlier redemption of the Underlying Bond; provided, however,
that in no event shall the Trust Fund created hereby continue beyond the
expiration of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late Ambassador of the United States to the Court of St.
James's, living on the date hereof and provided further, that in no event shall
the Trust Fund created hereby continue beyond May 25, 2028.
Section 7.02. Special Purchase of Certificates. (a) On any
Distribution Date occurring on or after the Distribution Date on which the
aggregate Certificate Principal Amount of the Certificates (other than the Class
X Certificate) is less than 35% of their initial aggregate Certificate Principal
Amount, the Class O Certificateholder, so long as it holds such Certificate,
shall have the option to purchase all, but not less than all (other than the
Class X Certificate), of the Certificates remaining outstanding on such
Distribution Date for a purchase price equal to the sum of the outstanding
Certificate Principal Amounts of each such Certificate plus accrued but unpaid
interest thereon at the applicable Certificate Interest Rate (the "Acquisition
Price").
(i) In order to exercise such option, the Class O Certificateholder
must deliver to the Trustee written notice of its intent to purchase all of the
Certificates and of the Distribution Date on which it intends to do so not less
than 20 days prior to such Distribution Date.
(ii) On the Business Day preceding the final Distribution Date, the
Class O Certificateholder shall deposit with the Trustee cash, certificates of
deposit or a letter of credit in an amount sufficient to provide for payment of
the Acquisition Price. Such amount shall be paid by the Trustee to Holders of
Certificates upon surrender for purchase as provided below.
(iii) Notice of any purchase of the Certificates pursuant to the
provisions of this subsection, specifying the Distribution Date upon which such
purchase shall be made, shall be given promptly by the Trustee by first class
mail to Holders of the Certificates mailed no later than five Business Days
after the Trustee has received notice from the Class O Certificateholder of its
intent to exercise its right to purchase the Certificates. Such notice shall
specify (A) the Distribution Date upon which the Acquisition Price will be paid
upon transfer of the Certificates (the "Acquisition Date"), and the time and
place at which any Definitive Certificates must be surrendered for cancellation
and (B) that the Acquisition Price applicable to each Certificate constitutes
payment in full therefor, and that no further amounts in respect of interest or
principal will be distributable to the Holders from whom such Certificates are
purchased by the Class O Certificateholder. The Trustee shall give such notice
to the Master Servicer and the Certificate Registrar at the time such notice is
given to Holders of the Certificates.
(iv) On the Acquisition Date, the Trustee shall (A) make payment to
each Holder of a Certificate of the Acquisition Price therefor in the manner in
which distributions are effected under this Agreement and (B) effect the
transfer of each such Certificate (or interest therein) to the Class O
Certificateholder, which shall thereafter (unless it transfers such Certificate
in accordance with this Agreement) be the Holder (or Certificate Owner) of such
Certificate for all purposes. Notwithstanding the foregoing, in the event that
all of the Holders of Definitive Certificates do not surrender their
Certificates for purchase at the time specified in the above-mentioned written
notice, the Trustee shall give a second written notice to such remaining
Certificateholders to surrender their Certificates for purchase. If within ten
days after the second notice any Definitive Certificates shall not have been
surrendered for cancellation, the Trustee may take appropriate steps to contact
the remaining Certificateholders concerning surrender of such Certificates, and
the cost thereof shall be paid out of the amounts distributable to such Holders.
Subject to applicable law, the Trustee shall hold all amounts payable to such
Holders for the benefit of such Holders. No interest shall accrue on any amount
held by the Trustee and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
Acquisition Price thereon in accordance with this Section. Notwithstanding that
any Definitive Certificate has not been surrendered after notice and deposit of
the Acquisition Price as provided above, on the Acquisition Date such
Certificate shall be deemed to be canceled and a transfer of such Certificate
(or interest therein) shall be deemed to be effected to the Class O
Certificateholder, which shall thereafter (unless it transfers such Certificate
in accordance with this Agreement) be the Holder (or Certificate Owner) of such
Certificate for all purposes.
Section 7.03. Procedure Upon Termination of Trust Fund. (a) Notice of
any termination pursuant to the provisions of Section 7.01, specifying the
Distribution Date upon which the final distribution shall be made, shall be
given promptly by the Trustee by first class mail to Certificateholders mailed
upon the final payment or earlier redemption of the Underlying Bond. Such notice
shall specify (A) the Distribution Date upon which final distribution on the
Certificates of all amounts required to be distributed to Certificateholders
pursuant to Section 5.02 will be made upon presentation and surrender of the
Certificates at the Corporate Trust Office, and (B) that the Record Date
otherwise applicable to such Distribution Date is not applicable, distribution
being made only upon presentation and surrender of the Certificates at the
office or agency of the Trustee therein specified. The Trustee shall give such
notice to the Master Servicer and the Certificate Registrar at the time such
notice is given to Holders of the Certificates. Upon any such termination, the
duties of the Certificate Registrar with respect to the Certificates shall
terminate and the Trustee shall terminate the Certificate Account and any other
account or fund maintained with respect to the Certificates, subject to the
Trustee's obligation hereunder to hold all amounts payable to Certificateholders
in trust without interest pending such payment.
(b) In the event that all of the Holders do not surrender their
Certificates for cancellation within three months after the time specified in
the above-mentioned written notice, the Trustee shall give further written
notice to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after such notice any Certificates shall not have been surrendered for
cancellation, the Trustee may take appropriate steps to contact the remaining
Certificateholders concerning surrender of such Certificates, and the cost
thereof shall be paid out of the amounts distributable to such Holders. If
within two years after such notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall, subject to applicable state law
relating to escheatment, hold all amounts distributable to such Holders for the
benefit of such Holders. No interest shall accrue on any amount held by the
Trustee and not distributed to a Certificateholder due to such
Certificateholder's failure to surrender its Certificate(s) for payment of the
final distribution thereon in accordance with this Section.
ARTICLE VIII.
RIGHTS OF CERTIFICATEHOLDERS
Section 8.01. Limitation on Rights of Holders. (a) The death or
incapacity of any Certificateholder shall not operate to terminate this
Agreement or this Trust Fund, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or take any action or proceeding
in any court for a partition or winding up of this Trust Fund, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them. Except as otherwise expressly provided herein, no Certificateholder,
solely by virtue of its status as a Certificateholder, shall have any right to
vote or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth, or contained in the terms of the Certificates, be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association, nor shall any Certificateholder be under any liability to any third
person by reason of any action taken by the parties to this Agreement pursuant
to any provision hereof.
(b) No Certificateholder, solely by virtue of its status as
Certificateholder, shall have any right by virtue or by availing of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of an Event
of Default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing not less than 25% of the Class
Certificate Principal Amount (or Percentage Interest) of Certificates of each
Class affected thereby shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee hereunder
and shall have offered to the Trustee such reasonable indemnity as it may
require against the cost, expenses and liabilities to be incurred therein or
thereby, and the Trustee, for sixty days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding and no direction inconsistent with such written
request has been given such Trustee during such sixty-day period by such
Certificateholders; it being understood and intended, and being expressly
covenanted by each Certificateholder with every other Certificateholder and the
Trustee, that no one or more Holders of Certificates shall have any right in any
manner whatever by virtue or by availing of any provision of this Agreement to
affect, disturb or prejudice the rights of the Holders of any other of such
Certificates, or to obtain or seek to obtain priority over or preference to any
other such Holder, or to enforce any right under this Agreement, except in the
manner herein provided and for the benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section, each and every
Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 8.02. Access to List of Holders. (a) If the Trustee is not
acting as Certificate Registrar, the Certificate Registrar will furnish or cause
to be furnished to the Trustee, within fifteen days after receipt by the
Certificate Registrar of a request by the Trustee in writing, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Certificateholders of each Class as of the most recent Record Date.
(b) If three or more Holders or Certificate Owners (hereinafter
referred to as "Applicants") apply in writing to the Trustee, and such
application states that the Applicants desire to communicate with other Holders
with respect to their rights under this Agreement or under the Certificates and
is accompanied by a copy of the communication which such Applicants propose to
transmit, then the Trustee shall, within five Business Days after the receipt of
such application, afford such Applicants reasonable access during the normal
business hours of the Trustee to the most recent list of Certificateholders held
by the Trustee or shall, as an alternative, send, at the Applicants' expense,
the written communication proffered by the Applicants to all Certificateholders
at their addresses as they appear in the Certificate Register.
(c) Every Holder or Certificate Owner, if the Holder is a Clearing
Agency, by receiving and holding a Certificate, agrees with the Depositor, the
Certificate Registrar and the Trustee that neither the Depositor, the
Certificate Registrar nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders hereunder, regardless of the source from which such
information was derived.
Section 8.03. Acts of Holders of Certificates. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Agreement to be given or taken by Holders or Certificate Owner,
if the Holder is a Clearing Agency, may be embodied in and evidenced by one or
more instruments of substantially similar tenor signed by such Holders in person
or by agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Trustee. Such instrument or instruments (as the action
embodies therein and evidenced thereby) are herein sometimes referred to as an
"Act" of the Holders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agents shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Trustee if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments or deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of the individual
executing the same, may also be proved in any other manner which the Trustee
deems sufficient.
(c) The ownership of Certificates (whether or not such Certificates
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by anyone other than the Trustee) shall be proved by the
Certificate Register, and neither the Trustee nor the Depositor shall be
affected by any notice to the contrary.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Certificate shall bind every future
Holder of the same Certificate and the Holder of every Certificate issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Trustee in
reliance thereon, whether or not notation of such action is made upon such
Certificate.
ARTICLE IX.
[RESERVED]
ARTICLE X.
FASIT ADMINISTRATION
Section 10.01. FASIT Administration. (a) The Holder of the Class O
Certificate or, to the extent required by applicable Treasury Regulations, the
Trustee, shall timely elect to treat the Trust as a FASIT under the Code and,
if necessary, under applicable state law. Unless otherwise required by
applicable Treasury Regulations, such election will be made on the appropriate
federal or state tax returns for the taxable year of the Holder of the Class O
Certificate in which the Certificates are issued or in any other taxable year
as required by applicable Treasury Regulations.
(b) Each Certificate (except the Class O Certificate) is hereby
designated as a separate "regular interest" (within the meaning of Section
860L(b)(1) of the Code) in the FASIT. The Class O Certificate is hereby
designated as the single class of "ownership interest" (within the meaning of
Section 860L(b)(2) of the Code) in the FASIT. The Trustee shall not permit the
creation of any other "interests" in the FASIT (within the meaning of the FASIT
Provisions) except those contemplated herein.
(c) The date of this Agreement is hereby designated as the "startup
day" of the FASIT within the meaning of Section 860L(d)(1) of the Code. Solely
for purposes of the FASIT Provisions, May 25, 2028 has been designated the
"latest possible maturity date" of each Class of regular interests in the
FASIT. (d) Except as otherwise provided in Section 11.01 below, the Holder of
the Class O Certificate shall pay out of its own funds any tax-related expenses
of the FASIT (including, but not limited to, expenses related to audits or any
administrative or judicial proceedings with respect to the FASIT that involve
the Internal Revenue Service or state tax authorities). (e) Within 30 days
after the date of this Agreement the Trustee shall cause the Master Servicer to
prepare or cause to be prepared and submit to the Holder of the Class O
Certificate for filing with the Internal Revenue Service Form 8811,
"Information Return for Real Estate Mortgage Investment Conduits (REMIC) and
Issuers of Collateralized Debt Obligations" for the FASIT. The Holder of the
Class O Certificate and the Master Servicer shall prepare, execute and file, or
cause to be prepared, executed and filed, the tax returns which the Holder of
the Class O Certificate and the FASIT are respectively obligated to prepare and
file in accordance with the FASIT Provisions. The expenses of preparing and
filing such returns shall not be an expense of the Trust or to the holders of
the regular interests in the FASIT, but rather be borne by the Holder of the
Class O Certificate, without any right of reimbursement therefor. The Trustee
shall cause the Master Servicer to provide on a timely basis to the Holder of
the Class O Certificate or its designee, and the Master Servicer shall provide
on a timely basis to the Trustee or its designee, such information with respect
to the FASIT as is in its possession and reasonably required by the Holder of
the Class O Certificate or the Trustee, respectively, to enable it to perform
its obligations under this Article.
The Master Servicer shall provide on a timely basis to the Trustee or
its designee such information with respect to the Trust and the FASIT, in each
case, as is in its possession, which the Master Servicer has received or
prepared by virtue of its role as master Master Servicer under the Servicing
Agreement and reasonably required by the Trustee to enable it to perform its
obligations under this Section 11.01 and the Trustee shall provide such
information on a timely basis to the Holder of the Class O Certificate or its
designee, and each of the Trustee and the Holder of the Class O Certificate
shall be entitled to rely on such information in the performance of its
obligations under this Section 11.01. The Master Servicer shall indemnify the
Holder of the Class O Certificate and the Trustee for any liability or
assessment against the Holder of the Class O Certificate, the Trustee or the
FASIT and any expenses incurred in connection with such liability or assessment
(including reasonable attorney's fees) resulting from any error in any tax or
information returns resulting from errors in the information provided by the
Master Servicer as the case may be. Such indemnification shall survive the
termination of this Agreement and any resignation or termination of the Trustee
under this Agreement.
(f) The Trustee shall report all information to Certificateholders
that is the responsibility of the FASIT under the Code, the FASIT Provisions or
other compliance guidance issued by the Internal Revenue Service or any state
or local taxing authority including, without limitation, reports relating to
interest, original issue discount and market discount or premium. The Trustee
shall provide to the Internal Revenue Service, the name, title, address and
telephone number of the Person who will serve as the representative of the
FASIT.
(g) None of the Holder of the Class O Certificate, the Master
Servicer or the Trustee shall knowingly take (or cause the FASIT to take) any
action or fail to take (or failed to cause to be taken) any action within their
respective control and within the scope of their respective duties under this
Agreement, that, under the FASIT Provisions, if taken or not taken, as the case
may be, would (i) endanger the status of the Trust as a FASIT, or (ii) result
in the imposition of a tax upon the FASIT (including but not limited to the tax
on prohibited transactions as defined in Section 860L(e) of the Code) (any such
endangerment or imposition, an "Adverse FASIT Event"), unless the Trustee and
the Master Servicer shall have obtained or received an Opinion of Counsel (at
the expense of the party requesting such action or at the expense of the Trust
if the Trustee seeks to take such action or to refrain from acting for the
benefit of the Certificateholders) to the effect that the contemplated action
will not result in an Adverse FASIT Event. The Trustee shall not take any
actions (or fail to take any action, whether or not authorized hereunder) as to
which the Holder of the Class O Certificate or the Master Servicer has advised
it in writing that either the Holder of the Class O Certificate or the Master
Servicer has received or obtain an Opinion of Counsel to the effect that an
Adverse FASIT Event would occur with respect to such action or inaction. In
addition, prior to taking any action with respect to the FASIT, or causing the
FASIT to take any action, that is not expressly permitted under the terms of
this Agreement, the Holder of the Class O Certificate and the Master Servicer
shall consult with the Trustee or its designee, in writing, with respect to
whether such action would cause an Adverse FASIT Event to occur. The Holder of
the Class O Certificate shall not take any such action or cause the FASIT to
take any such action as to which the Trustee has advised it in writing that an
Adverse FASIT Event would occur, and the Holder of the Class O Certificate
shall not have any liability hereunder for any action taken by it in accordance
with the written instructions of the Trustee. The Trustee may consult with
counsel to obtain such written advice, and the Trustee may conclusively rely on
such advice of counsel, and the cost of same shall be borne by the party
seeking to take the action not permitted by this Agreement, but in no event at
the cost or expense of the Trust or the Trustee.
(h) If any "prohibited transactions" taxes, as defined in Section
860L(e) of the Code, or any other tax imposed by the Code or any applicable
provisions of state or local tax laws is imposed on the FASIT, such tax,
together with all incidental costs and expenses (including, without limitation,
penalties and reasonable attorneys' fees), shall be charged to and paid by (i)
the Master Servicer, if such tax arises out of or results from a breach by the
Master Servicer of any of its obligations or this Article X; or (ii) the Holder
of the Class O Certificate, if such tax arises out of a breach of any of its
obligations under this Article X.
(i) The Holder of the Class O Certificate and, to the extent that
records are maintained by the Master Servicer in the normal course of its
business, and the Master Servicer shall, for federal income tax purposes,
maintain books and records with respect to the FASIT on an accrual basis and a
taxable year corresponding to the taxable year of the Holder of the Class O
Certificate.
(j) Neither the Trustee nor the Master Servicer shall not enter into
any arrangement by which the FASIT will receive a fee or other compensation for
services (other than a fee received as a compensation for a waiver, amendment
or consent under permitted assets (other than foreclosure property) held by the
FASIT) nor permit the FASIT to receive any income from assets other than
"permitted assets" as defined in Section 860L(c) of the Code.
Section 10.02 Compliance with FASIT Provisions; Further Assurances.
(a) In order to facilitate compliance by the Trust with the FASIT
Provisions, the parties hereto agree that, insofar as the rights or
responsibilities of any party under, or actions required to be taken by any
party to, this Agreement are required to be modified as a result of the
promulgation of proposed, temporary or final Treasury Regulations or other
applicable authority, as evidenced by a notice from the Master Servicer to the
other parties hereto, based upon the advice of counsel, the parties hereto
agree (i) to enter into any amendments to this Agreement that are required to
bring this Agreement into compliance with such regulation or other authority
and/or to allow the Trust to continue to be classified as a FASIT for U.S.
federal income tax purposes or (ii) to take such actions or refrain from taking
such actions pursuant to the terms of this Agreement in a manner consistent
with such regulations or other authority necessary to maintain the status of
the Trust as a FASIT or to prevent the imposition of tax on the Trust or the
FASIT.
(b) The parties to this Agreement hereby agree to take such further
actions as may be required to effectuate this Section 10.02 and the intent that
this Trust be treated as a FASIT under the FASIT Provisions.
ARTICLE XI.
MISCELLANEOUS PROVISIONS
Section 11.01 Binding Nature of Agreement; Assignment. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.
Section 11.02. Entire Agreement. This Agreement contains the entire
agreement and understanding among the parties hereto with respect to the
subject matter hereof, and supersedes all prior and contemporaneous agreements,
understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof.
The express terms hereof control and supersede any course of performance and/or
usage of the trade inconsistent with any of the terms hereof.
Section 11.03. Amendment. (a) This Agreement may be amended from time
to time by the Depositor and the Trustee, without notice to or the consent of
any of the Holders, (i) to cure any ambiguity, (ii) to cause the provisions
herein to conform to or be consistent with or in furtherance of the statements
made with respect to the Certificates, the Trust Fund or this Agreement in any
Offering Document, or to correct or supplement any provision herein which may
be inconsistent with any other provisions herein, (iii) to make any other
provisions with respect to matters or questions arising under this Agreement or
(iv) to add, delete, or amend any provisions to the extent necessary or
desirable to comply with any requirements imposed by the Code and the FASIT
Provisions. No such amendment effected pursuant to the preceding sentence
shall, as evidenced by an Opinion of Counsel, result in an Adverse FASIT Event,
nor shall such amendment effected pursuant to clause (iii) of such sentence
adversely affect in any material respect the interests of any Holder. Prior to
entering into any amendment without the consent of Holders pursuant to this
paragraph, the Trustee may require an Opinion of Counsel (at the expense of the
party requesting such amendment) to the effect that such amendment is permitted
under this paragraph. Any such amendment shall be deemed not to adversely
affect in any material respect any Holder, if the Trustee receives written
confirmation from each Rating Agency that such amendment will not cause such
Rating Agency to reduce the then current rating assigned to the Certificates
(and any Opinion of Counsel requested by the Trustee in connection with any
such amendment may rely expressly on such confirmation as the basis therefor).
(b) This Agreement may also be amended from time to time by the
Depositor and the Trustee with the consent of the Holders of not less than
66-2/3% of the Class Certificate Principal Amount (or Percentage Interest) of
each Class of Certificates affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders;
provided, however, that no such amendment shall be made unless the Trustee
receives an Opinion of Counsel, at the expense of the party requesting the
change, that such change will not result in an Adverse FASIT Event, and
provided further, that no such amendment may (i) reduce in any manner the
amount of, or delay the timing of, payments received on the Underlying Bond
which are required to be distributed on any Certificate, without the consent of
the Holder of such Certificate or (ii) reduce the aforesaid percentages of
Class Certificate Principal Amount (or Percentage Interest) of Certificates of
each Class, the Holders of which are required to consent to any such amendment
without the consent of the Holders of 100% of the Class Certificate Principal
Amount (or Percentage Interest) of each Class of Certificates affected thereby.
For purposes of this paragraph, references to "Holder" or "Holders" shall be
deemed to include, in the case of any Class of Book-Entry Certificates, the
related Certificate Owners.
(c) Promptly after the execution of any such amendment, the Trustee
shall furnish written notification of the substance of such amendment to each
Holder, the Depositor and to the Rating Agencies.
(d) It shall not be necessary for the consent of Holders under this
Section 11.03 to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Holders shall be subject to such reasonable regulations as
the Trustee may prescribe.
(e) Notwithstanding anything to the contrary in any Servicing
Agreement, the Trustee shall not consent to any amendment of any Servicing
Agreement except pursuant to the standards provided in this Section with
respect to amendment of this Agreement. Section 1Voting Rights. Except to the
extent that the consent of all affected Certificateholders is required pursuant
to this Agreement, with respect to any provision of this Agreement requiring
the consent of Certificateholders representing specified percentages of
aggregate outstanding Certificate Principal Amount (or Percentage Interest),
Certificates owned by the Depositor, the Master Servicer, the Trustee or any
Servicer or Affiliates thereof are not to be counted so long as such
Certificates are owned by the Depositor, the Master Servicer, the Trustee or
any Servicer or any Affiliate thereof.
Section 11.05. Provision of Information. (a) For so long as any of
the Certificates of any Series or Class are "restricted securities" within the
meaning of Rule 144(a)(3) under the Act, each of the Depositor and the Trustee
agree to cooperate with each other to provide to any Certificateholders and to
any prospective purchaser of Certificates designated by such Certificateholder,
upon the request of such Certificateholder or prospective purchaser, any
information required to be provided to such holder or prospective purchaser to
satisfy the condition set forth in Rule 144A(d)(4) under the Act. Any
reasonable, out-of-pocket expenses incurred by the Trustee in providing such
information shall be reimbursed by the Depositor.
(b) The Trustee will provide to any person to whom a Prospectus was
delivered, upon the request of such person specifying the document or documents
requested, (i) a copy (excluding exhibits) of any report on Form 8-K or Form
10-K filed with the Securities and Exchange Commission pursuant to Section 3(i)
of the Master Servicing Agreement and (ii) a copy of any other document
incorporated by reference in the Prospectus. Any reasonable out-of-pocket
expenses incurred by the Trustee in providing copies of such documents shall be
reimbursed by the Depositor.
(c) On each Distribution Date, the Trustee shall deliver or cause to
be delivered by first class mail to the Depositor, Attention: Contract Finance,
a copy of the report delivered to Certificateholders pursuant to Section 4.03.
Section 1Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF
THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES APPLIED IN NEW YORK.
Section 11.07. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given when
received by (a) in the case of the Depositor, American Residential Eagle, Inc.,
000 Xxxxxx Xxxx Xxxxxx, Xxxxx 000, Xxx Xxx, Xxxxxxxxxx 00000, Attention: Xxxx
Xxxxxx, and (b) in the case of the Trustee, First Union National Bank, 000
Xxxxx Xxxxx Xxxxxx XX0000, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention:
Structured Finance, or as to each party such other address as may hereafter be
furnished by such party to the other parties in writing. Any notice required or
permitted to be mailed to a Holder shall be given by first class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register.
Any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice.
Section 11.08. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Certificates or the rights of the Holders thereof.
Section 11.09. Indulgences; No Waivers. Neither the failure nor any
delay on the part of a party to exercise any right, remedy, power or privilege
under this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted
such waiver.
Section 11.10. Headings Not To Affect Interpretation. The headings
contained in this Agreement are for convenience of reference only, and they
shall not be used in the interpretation hereof.
Section 11.11. Benefits of Agreement. Nothing in this Agreement or in
the Certificates, express or implied, shall give to any Person, other than the
parties to this Agreement and their successors hereunder and the Holders of the
Certificates, any benefit or any legal or equitable right, power, remedy or
claim under this Agreement.
Section 11.12. Special Notices to the Rating Agencies. (a) The
Depositor shall give prompt notice to the Rating Agencies of the occurrence of
any of the following events of which it has notice:
(i) any amendment to this Agreement pursuant to Section 11.03;
(ii) the making of a final payment pursuant to Section 7.02; and
(iii) any termination of the rights and obligations of any
Servicer under the applicable Servicing Agreement.
(b) All notices to the Rating Agencies provided for this Section
shall be in writing and sent by first class mail, telecopy or overnight
courier, as follows:
Standard & Poor's Rating Services
00 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgages
And
Duff & Xxxxxx Credit Rating Company
00 Xxxx Xxxxxx
00xx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Residential Mortgage-Backed Securities
(c) The Trustee shall deliver to the Rating Agencies reports prepared
pursuant to Section 4.03.
Section 11.13 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Depositor and the Trustee have caused their
names to be signed hereto by their respective officers hereunto duly authorized
as of the day and year first above written.
AMERICAN RESIDENTIAL EAGLE, INC.,
as Depositor
By: ___________________________
Name: _____________________
Title: ____________________
FIRST UNION NATIONAL BANK,
as Trustee.
By: ___________________________
Name: _____________________
Title: ____________________
ACKNOWLEDGED BY:
NORWEST BANK MINNESOTA,
NATIONAL ASSOCIATION
(solely for purposes of Article IV
and Article X hereof).
By: ___________________________
Name: _____________________
Title: ____________________
EXHIBIT A
FORMS OF CERTIFICATES
EXHIBIT A-1
FORM OF CLASS A-1 CERTIFICATE
THIS CERTIFICATE IS A FASIT REGULAR INTEREST CERTIFICATE. THIS CERTIFICATE DOES
NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY, THE
DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND IS NOT INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATES, SERIES 1998-1
CLASS A-1
Evidencing a beneficial interest in a single Collateralized
Callable Mortgage Bond issued by American Residential Eagle
Bond Trust 1998-1 and other assets in a trust fund
established by
AMERICAN RESIDENTIAL EAGLE, INC.
Initial Aggregate Certificate Initial Certificate
Principal Amount of the Class A-1 Principal Amount of this
Certificates: $143,970,000.00 Certificate: $143,970,000.00
Certificate Cut-off Date: May 1, 1998
Interest Rate: Variable
NUMBER 1 CUSIP: 00000XXX0
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the initial Certificate
Principal Amount of this Certificate by the initial aggregate Certificate
Principal Amount of all Class A-1 Certificates, both as specified above) in (i)
certain distributions of principal and interest on a Collateralized Callable
Mortgage Bond issued by American Residential Eagle Bond Trust 1998-1 acquired
from American Residential Eagle, Inc. (the "Depositor"), a Delaware
corporation, (ii) such amounts and investments as from time to time may be held
in the Trust Fund established pursuant to the Trust Agreement (as defined on
the reverse hereof) and (iii) certain other assets, if any, as described in the
Trust Agreement (the foregoing assets hereinafter collectively referred to as
the "Trust Fund").
Distributions on this Certificate will be made monthly on the 25th day of
each month or, if such a day is not a Business Day, then the next succeeding
Business Day, commencing on June 25, 1998 (each, a "Distribution Date"), to the
Person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding the related Distribution Date (the
"Record Date"), in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount, if any, required to be
distributed to all the Certificates of the Class represented by this
Certificate. All sums distributable on this Certificate are payable in the coin
or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Trust Agreement or
be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
TRUSTEE'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
(REVERSE)
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATE, SERIES 1998-1
This Certificate is one of a duly authorized issue of certificates designated
as American Residential Eagle Certificate Trust 1998-1 Mortgage-Backed Callable
Certificates, Series 1998-1 (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Trust
Agreement dated as of June 1, 1998 (the "Trust Agreement"), between American
Residential Eagle, Inc., as Depositor, and First Union National Bank, as
Trustee, to which terms, provisions and conditions thereof the Holder of this
Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: the Class
A-1 and Class A-2 Certificates (the "Senior Certificates"), the Class M-1,
Class M-2, Class B, and Class X Certificates (the "Subordinate Certificates"),
and the Class O Certificate (the "Ownership Certificate").
On each Distribution Date, the Total Distribution Amount will be distributed
from the Certificate Account to Holders of each Class of Certificates according
to the terms of the Trust Agreement. All distributions or allocations made with
respect to each Class of Certificates on each Distribution Date shall be
allocated among the outstanding Certificates of such Class based on the
Certificate Principal Amount (or Percentage Interest) of each such Certificate.
Distributions on this Certificate will be made by check mailed to the Holder of
record of this Certificate on the immediately preceding Record Date at the
address of such Holder as it appears on the Certificate Register (except that
with respect to a Certificate registered in the name of a Clearing Agency or
its nominee, distributions will be made by wire transfer of immediately
available funds) or, with respect to any Holder of a Certificate evidencing not
less than $2,500,000 in initial Certificate Principal Amount (or 100% of the
Percentage Interest in such Class), by wire transfer in immediately available
funds, upon written request made to the Trustee or as otherwise permitted by
the Trustee. Wire transfers will be made at the expense of the Holder
requesting the same by deducting a wire transfer fee from the related
distribution. The final distribution on this Certificate will be made, after
due notice to the Holder of the pendency of such distribution, only upon
presentation and surrender of this Certificate at the Corporate Trust Office
(as defined below).
The Corporate Trust Office with respect to the presentment and surrender of
Certificates for the final distribution thereon and the presentment and
surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at 000 Xxxxx Xxxxx Xxxxxx NC 1179, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000, Attention: Structured Finance. The Trustee may designate
another address from time to time by notice to the Holders of the Certificates
and the Depositor.
The Trust Agreement permits the amendment thereof from time to time by the
Depositor and the Trustee with the consent of the Holders of not less than 66
2/3% of the aggregate outstanding Certificate Principal Amount (or Percentage
Interest) of each Class for the purpose of adding, changing or eliminating any
provisions of the Trust Agreement or modifying the rights of the Holders of the
Certificates thereunder; provided, however, that (i) no such amendment may be
made unless the Trustee receives an opinion of counsel as to certain tax
matters specified in the Trust Agreement and (ii) no such amendment may (a)
reduce the amount or delay the timing of distributions required to be made on
any Certificate without the consent of the Holder of such Certificate, or (b)
reduce the percentage of aggregate outstanding Certificate Principal Amount (or
Percentage Interest) of each Class the Holders of which are required to consent
to any such amendment, without the consent of the Holders of 100% of the
aggregate Certificate Principal Amount (or Percentage Interest) of each Class
affected thereby. Any consent by the Holder of this Certificate will be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any 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 Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
Corporate Trust Office, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Certificate Registrar, duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class of
authorized denominations evidencing the same initial Certificate Principal
Amount (or Percentage Interest) will be issued to the designated transferee or
transferees. As provided in the Trust Agreement and subject to certain
limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial
Certificate Principal Amount (or Percentage Interest) as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Certificates to the extent provided in the Trust Agreement, will be subject
to purchase by the holder of the Class O Certificate for the price specified in
the Trust Agreement, on any Distribution Date on which the aggregate
Certificate Principal Amount of the Certificates is less than 35% of the
aggregate Certificate Principal Amount thereof as of the Closing Date, as
provided in the Trust Agreement. The Certificates will also be subject to
mandatory redemption in accordance with the Trust Agreement on any Distribution
Date on which the Underlying Bond is redeemed. In no event will the trust
created by the Trust Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Trust Agreement of a certain person named in the Trust Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent of any
of them may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
the Certificate Registrar nor any such agent shall be affected by any notice to
the contrary.
As provided in the Trust Agreement, this Certificate and the Trust Agreement
shall be construed in accordance with and governed by the laws of the State of
New York, without regard to the conflict of laws principles applied in the
State of New York. In the event of any conflict between the provisions of this
Certificate and the Trust Agreement, the Trust Agreement shall be controlling.
Any term used herein and not otherwise defined shall be as defined in the Trust
Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate
of the same Class of like principal to the above-named assignee and deliver
such Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
--------------------------
Authorized Officer __________________________________________
Signature Guaranteed
-------------------------- ------------------------------------------
Name of Institution NOTICE: The signature(s) of this assignment
must correspond with the name(s) on the
face of this Certificate without alteration
or any change whatsoever. The signature
must be guaranteed by a participant in the
Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
Exchanges Medallion Program. Notarized or
witnessed signatures are not acceptable as
guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
-------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number __________________ or, if mailed by check, to _________________
-----------------------------------------------------------------------------.
Applicable reports and statements should be mailed to ________________________
-----------------------------------------------------------------------------
This information is provided by_________________________________________
the assignee named above, or ____________________________________ as its agent.
EXHIBIT A-2
FORM OF CLASS A-2 CERTIFICATE
THIS CERTIFICATE IS A FASIT REGULAR INTEREST CERTIFICATE. THIS CERTIFICATE DOES
NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY, THE
DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND IS NOT INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATES, SERIES 1998-1
CLASS A-2
Evidencing a beneficial interest in a single Collateralized
Callable Mortgage Bond issued by American Residential Eagle
Bond Trust 1998-1 and other assets in a trust fund
established by
AMERICAN RESIDENTIAL EAGLE, INC.
Initial Aggregate Certificate Initial Certificate
Principal Amount of the Class A-2 Principal Amount of this
Certificates: $232,093,000.00 Certificate: $232,093,000.00
Certificate Cut-off Date: May 1, 1998
Interest Rate: Variable
NUMBER 1 CUSIP: 00000XXX0
THIS CERTIFIES THAT [ ]is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the initial Certificate
Principal Amount of this Certificate by the initial aggregate Certificate
Principal Amount of all Class A-2 Certificates, both as specified above) in (i)
certain distributions of principal and interest on a Collateralized Callable
Mortgage Bond issued by American Residential Eagle Bond Trust 1998-1 (the
"Underlying Bond") acquired from American Residential Eagle, Inc. (the
"Depositor"), a Delaware corporation, (ii) such amounts and investments as from
time to time may be held in the Trust Fund established pursuant to the Trust
Agreement (as defined on the reverse hereof) and (iii) certain other assets, if
any, as described in the Trust Agreement (the foregoing assets hereinafter
collectively referred to as the "Trust Fund").
Distributions on this Certificate will be made monthly on the 25th day of
each month or, if such a day is not a Business Day, then the next succeeding
Business Day, commencing on June 25, 1998 (each, a "Distribution Date"), to the
Person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding the related Distribution Date (the
"Record Date"), in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount, if any, required to be
distributed to all the Certificates of the Class represented by this
Certificate. All sums distributable on this Certificate are payable in the coin
or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Trust Agreement or
be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
TRUSTEE'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
(REVERSE)
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATE, SERIES 1998-1
This Certificate is one of a duly authorized issue of certificates designated
as American Residential Eagle Certificate Trust 1998-1 Mortgage-Backed Callable
Certificates, Series 1998-1 (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Trust
Agreement dated as of June 1, 1998 (the "Trust Agreement"), between American
Residential Eagle, Inc., as Depositor, and First Union National Bank, as
Trustee, to which terms, provisions and conditions thereof the Holder of this
Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: the Class
A-1 and Class A-2 Certificates (the "Senior Certificates"), the Class M-1,
Class M-2, Class B, and Class X Certificates (the "Subordinate Certificates"),
and the Class O Certificate (the "Ownership Certificate").
On each Distribution Date, the Total Distribution Amount will be distributed
from the Certificate Account to Holders of each Class of Certificates according
to the terms of the Trust Agreement. All distributions or allocations made with
respect to each Class of Certificates on each Distribution Date shall be
allocated among the outstanding Certificates of such Class based on the
Certificate Principal Amount (or Percentage Interest) of each such Certificate.
Distributions on this Certificate will be made by check mailed to the Holder of
record of this Certificate on the immediately preceding Record Date at the
address of such Holder as it appears on the Certificate Register (except that
with respect to a Certificate registered in the name of a Clearing Agency or
its nominee, distributions will be made by wire transfer of immediately
available funds) or, with respect to any Holder of a Certificate evidencing not
less than $2,500,000 in initial Certificate Principal Amount (or 100% of the
Percentage Interest in such Class), by wire transfer in immediately available
funds, upon written request made to the Trustee or as otherwise permitted by
the Trustee. Wire transfers will be made at the expense of the Holder
requesting the same by deducting a wire transfer fee from the related
distribution. The final distribution on this Certificate will be made, after
due notice to the Holder of the pendency of such distribution, only upon
presentation and surrender of this Certificate at the Corporate Trust Office
(as defined below).
The Corporate Trust Office with respect to the presentment and surrender of
Certificates for the final distribution thereon and the presentment and
surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at 000 Xxxxx Xxxxx Xxxxxx NC 1179, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000, Attention: Structured Finance. The Trustee may designate
another address from time to time by notice to the Holders of the Certificates
and the Depositor.
The Trust Agreement permits the amendment thereof from time to time by the
Depositor and the Trustee with the consent of the Holders of not less than 66
2/3% of the aggregate outstanding Certificate Principal Amount (or Percentage
Interest) of each Class for the purpose of adding, changing or eliminating any
provisions of the Trust Agreement or modifying the rights of the Holders of the
Certificates thereunder; provided, however, that (i) no such amendment may be
made unless the Trustee receives an opinion of counsel as to certain tax
matters specified in the Trust Agreement and (ii) no such amendment may (a)
reduce the amount or delay the timing of distributions required to be made on
any Certificate without the consent of the Holder of such Certificate, or (b)
reduce the percentage of aggregate outstanding Certificate Principal Amount (or
Percentage Interest) of each Class the Holders of which are required to consent
to any such amendment, without the consent of the Holders of 100% of the
aggregate Certificate Principal Amount (or Percentage Interest) of each Class
affected thereby. Any consent by the Holder of this Certificate will be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any 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 Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
Corporate Trust Office, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Certificate Registrar, duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class of
authorized denominations evidencing the same initial Certificate Principal
Amount (or Percentage Interest) will be issued to the designated transferee or
transferees. As provided in the Trust Agreement and subject to certain
limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial
Certificate Principal Amount (or Percentage Interest) as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Certificates will, to the extent provided in the Trust Agreement, be
subject to purchase by the holder of the Class O Certificate for the price
specified in the Trust Agreement, on any Distribution Date on which the
aggregate Certificate Principal Amount of the Certificates is less than 35% of
the aggregate Certificate Principal Amount thereof as of the Closing Date, as
provided in the Trust Agreement. The Certificates will also be subject to
mandatory redemption in accordance with the Trust Agreement on any Distribution
Date on which the Underlying Bond is redeemed. In no event will the trust
created by the Trust Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Trust Agreement of a certain person named in the Trust Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent of any
of them may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
the Certificate Registrar nor any such agent shall be affected by any notice to
the contrary.
As provided in the Trust Agreement, this Certificate and the Trust Agreement
shall be construed in accordance with and governed by the laws of the State of
New York, without regard to the conflict of laws principles applied in the
State of New York. In the event of any conflict between the provisions of this
Certificate and the Trust Agreement, the Trust Agreement shall be controlling.
Any term used herein and not otherwise defined shall be as defined in the Trust
Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate
of the same Class of like principal to the above-named assignee and deliver
such Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
-------------------------- ----------------------------------------
Authorized Officer Signature Guaranteed
-------------------------- ------------------------------------------
Name of Institution NOTICE: The signature(s) of this assignment
must correspond with the name(s) on the
face of this Certificate without alteration
or any change whatsoever. The signature
must be guaranteed by a participant in the
Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
Exchanges Medallion Program. Notarized or
witnessed signatures are not acceptable as
guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number __________________ or, if mailed by check, to _________________
------------------------------------------------------------------------------
Applicable reports and statements should be mailed to ________________________
------------------------------------------------------------------------------
This information is provided by _____________________________________
the assignee named above, or ____________________________________ as its agent
EXHIBIT A-3
FORM OF CLASS M-1 CERTIFICATE
THIS CERTIFICATE IS A FASIT REGULAR INTEREST CERTIFICATE. THIS CERTIFICATE DOES
NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY, THE
DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND IS NOT INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRUST
AGREEMENT REFERRED TO HEREIN.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A CERTIFICATION TO
THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER AN EMPLOYEE BENEFIT PLAN SUBJECT
TO SECTION 406 OR SECTION 407 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THE TRUSTEE OF ANY SUCH PLAN OR A PERSON ACTING
ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF ANY SUCH PLAN OR
(2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH TRANSFEREE IS PURCHASING
SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL
ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(e) OF THE PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES ARE COVERED UNDER PTCE 95-60; OR (B) AN OPINION OF COUNSEL (A
"BENEFIT PLAN OPINION") SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND UPON
WHICH THE TRUSTEE AND THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE PLAN ASSETS
AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE AND
WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF
COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE OR THE DEPOSITOR.
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATES, SERIES 1998-1
CLASS M-1
Evidencing a beneficial interest in a single Collateralized
Callable Mortgage Bond issued by American Residential Eagle
Bond Trust 1998-1 and other assets in a trust fund
established by
AMERICAN RESIDENTIAL EAGLE, INC.
Initial Aggregate Certificate Initial Certificate
Principal Amount of the Class M-1 Principal Amount of this
Certificates: $46,029,000.00 Certificate: $46,029,000.00
Certificate Cut-off Date: May 1, 1998
Interest Rate: Variable
NUMBER 1 CUSIP: 00000XXX0
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the initial Certificate
Principal Amount of this Certificate by the initial aggregate Certificate
Amount of all Class M-1 Certificates, both as specified above) in (i) certain
distributions of principal and interest on a Collateralized Callable Mortgage
Bond issued by American Residential Eagle Bond Trust 1998-1 (the "Underlying
Bond") acquired from American Residential Eagle, Inc. (the "Depositor"), a
Delaware corporation, (ii) such amounts and investments as from time to time
may be held in the Trust Fund established pursuant to the Trust Agreement (as
defined on the reverse hereof) and (iii) certain other assets, if any, as
described in the Trust Agreement (the foregoing assets hereinafter collectively
referred to as the "Trust Fund").
Distributions on this Certificate will be made monthly on the 25th day of each
month or, if such a day is not a Business Day, then the next succeeding
Business Day, commencing on June 25, 1998 (each, a "Distribution Date"), to the
Person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding the related Distribution Date (the
"Record Date"), in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount, if any, required to be
distributed to all the Certificates of the Class represented by this
Certificate. All sums distributable on this Certificate are payable in the coin
or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Trust Agreement or
be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
TRUSTEE'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
(REVERSE)
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATE, SERIES 1998-1
This Certificate is one of a duly authorized issue of certificates designated
as American Residential Eagle Certificate Trust 1998-1 Mortgage-Backed Callable
Certificates, Series 1998-1 (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Trust
Agreement dated as of June 1, 1998 (the "Trust Agreement"), between American
Residential Eagle, Inc., as Depositor, and First Union National Bank, as
Trustee, to which terms, provisions and conditions thereof the Holder of this
Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: the Class
A-1 and Class A-2 Certificates (the "Senior Certificates"), the Class M-1,
Class M-2, Class B, and Class X Certificates (the "Subordinate Certificates"),
and the Class O Certificate (the "Ownership Certificate").
On each Distribution Date, the Total Distribution Amount will be distributed
from the Certificate Account to Holders of each Class of Certificates according
to the terms of the Trust Agreement. All distributions or allocations made with
respect to each Class of Certificates on each Distribution Date shall be
allocated among the outstanding Certificates of such Class based on the
Certificate Principal Amount (or Percentage Interest) of each such Certificate.
Distributions on this Certificate will be made by check mailed to the Holder of
record of this Certificate on the immediately preceding Record Date at the
address of such Holder as it appears on the Certificate Register (except that
with respect to a Certificate registered in the name of a Clearing Agency or
its nominee, distributions will be made by wire transfer of immediately
available funds) or, with respect to any Holder of a Certificate evidencing not
less than $2,500,000 in initial Certificate Principal Amount (or 100% of the
Percentage Interest in such Class), by wire transfer in immediately available
funds, upon written request made to the Trustee or as otherwise permitted by
the Trustee. Wire transfers will be made at the expense of the Holder
requesting the same by deducting a wire transfer fee from the related
distribution. The final distribution on this Certificate will be made, after
due notice to the Holder of the pendency of such distribution, only upon
presentation and surrender of this Certificate at the Corporate Trust Office
(as defined below).
The Corporate Trust Office with respect to the presentment and surrender of
Certificates for the final distribution thereon and the presentment and
surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at 000 Xxxxx Xxxxx Xxxxxx NC 1179, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000, Attention: Structured Finance. The Trustee may designate
another address from time to time by notice to the Holders of the Certificates
and the Depositor.
The Trust Agreement permits the amendment thereof from time to time by the
Depositor and the Trustee with the consent of the Holders of not less than 66
2/3% of the aggregate outstanding Certificate Principal Amount (or Percentage
Interest) of each Class for the purpose of adding, changing or eliminating any
provisions of the Trust Agreement or modifying the rights of the Holders of the
Certificates thereunder; provided, however, that (i) no such amendment may be
made unless the Trustee receives an opinion of counsel as to certain tax
matters specified in the Trust Agreement and (ii) no such amendment may (a)
reduce the amount or delay the timing of distributions required to be made on
any Certificate without the consent of the Holder of such Certificate, or (b)
reduce the percentage of aggregate outstanding Certificate Principal Amount (or
Percentage Interest) of each Class the Holders of which are required to consent
to any such amendment, without the consent of the Holders of 100% of the
aggregate Certificate Principal Amount (or Percentage Interest) of each Class
affected thereby. Any consent by the Holder of this Certificate will be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any 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 Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
Corporate Trust Office, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Certificate Registrar, duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class of
authorized denominations evidencing the same initial Certificate Principal
Amount (or Percentage Interest) will be issued to the designated transferee or
transferees. As provided in the Trust Agreement and subject to certain
limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial
Certificate Principal Amount (or Percentage Interest) as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Certificates, to the extent provided in the Trust Agreement, will be
subject to purchase by the holder of the Class O Certificate for the price
specified in the Trust Agreement, on any Distribution Date on which the
aggregate Certificate Principal Amount of the Certificates is less than 35% of
the aggregate Certificate Principal Amount thereof as of the Closing Date, as
provided in the Trust Agreement. The Certificates will also be subject to
mandatory redemption in accordance with the Trust Agreement on any Distribution
Date on which the Underlying Bond is redeemed. In no event will the trust
created by the Trust Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Trust Agreement of a certain person named in the Trust Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent of any
of them may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
the Certificate Registrar nor any such agent shall be affected by any notice to
the contrary.
As provided in the Trust Agreement, this Certificate and the Trust Agreement
shall be construed in accordance with and governed by the laws of the State of
New York, without regard to the conflict of laws principles applied in the
State of New York. In the event of any conflict between the provisions of this
Certificate and the Trust Agreement, the Trust Agreement shall be controlling.
Any term used herein and not otherwise defined shall be as defined in the Trust
Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate
of the same Class of like principal to the above-named assignee and deliver
such Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
-------------------------- ------------------------------------------
Authorized Officer Signature Guaranteed
-------------------------- ------------------------------------------
Name of Institution NOTICE: The signature(s) of this assignment
must correspond with the name(s) on the
face of this Certificate without alteration
or any change whatsoever. The signature
must be guaranteed by a participant in the
Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
Exchanges Medallion Program. Notarized or
witnessed signatures are not acceptable as
guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number __________________ or, if mailed by check, to _________________
-----------------------------------------------------------------------------.
Applicable reports and statements should be mailed to ________________________
-----------------------------------------------------------------------------.
This information is provided by _____________________________________
the assignee name
EXHIBIT A-4
FORM OF CLASS M-2 CERTIFICATE
THIS CERTIFICATE IS A FASIT REGULAR INTEREST CERTIFICATE. THIS CERTIFICATE DOES
NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY, THE
DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND IS NOT INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRUST
AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A CERTIFICATION TO
THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER AN EMPLOYEE BENEFIT PLAN SUBJECT
TO SECTION 406 OR SECTION 407 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THE TRUSTEE OF ANY SUCH PLAN OR A PERSON ACTING
ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF ANY SUCH PLAN OR
(2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH TRANSFEREE IS PURCHASING
SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL
ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(e) OF THE PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES ARE COVERED UNDER PTCE 95-60; OR (B) AN OPINION OF COUNSEL (A
"BENEFIT PLAN OPINION") SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND UPON
WHICH THE TRUSTEE AND THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE PLAN ASSETS
AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE AND
WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF
COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE OR THE DEPOSITOR.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH CERTIFICATE ONLY (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT, (B) FOR SO LONG
AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A OR (C) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE 1933 ACT THAT IS ACQUIRING THE CERTIFICATE FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE 1933 ACT, SUBJECT TO THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE TRUST AGREEMENT.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATES, SERIES 1998-1
CLASS M-2
Evidencing a beneficial interest in a single Collateralized
Callable Mortgage Bond issued by American Residential Eagle
Bond Trust 1998-1 and other assets in a trust fund
established by
AMERICAN RESIDENTIAL EAGLE, INC.
Initial Aggregate Certificate Initial Certificate
Principal Amount of the Class M-2 Principal Amount of this
Certificates: $17,365,000.00 Certificate: $17,365,000.00
Certificate Cut-off Date: May 1, 1998
Interest Rate: Variable
NUMBER 1 CUSIP: 00000XXX0
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the initial Certificate
Principal Amount of this Certificate by the initial aggregate Certificate
Amount of all Class M-2 Certificates, both as specified above) in (i) certain
distributions of principal and interest on a Collateralized Callable Mortgage
Bond issued by American Residential Eagle Bond Trust 1998-1 (the "Underlying
Bond") acquired from American Residential Eagle, Inc. (the "Depositor"), a
Delaware corporation, (ii) such amounts and investments as from time to time
may be held in the Trust Fund established pursuant to the Trust Agreement (as
defined on the reverse hereof) and (iii) certain other assets, if any, as
described in the Trust Agreement (the foregoing assets hereinafter collectively
referred to as the "Trust Fund").
Distributions on this Certificate will be made monthly on the 25th day of each
month or, if such a day is not a Business Day, then the next succeeding
Business Day, commencing on June 25, 1998 (each, a "Distribution Date"), to the
Person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding the month in which the related
Distribution Date (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount, if any,
required to be distributed to all the Certificates of the Class represented by
this Certificate. All sums distributable on this Certificate are payable in the
coin or currency of the United States of America which at the time of payment
is legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Trust Agreement or
be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
TRUSTEE'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
(REVERSE)
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATE, SERIES 1998-1
This Certificate is one of a duly authorized issue of certificates designated
as American Residential Eagle Certificate Trust 1998-1 Mortgage-Backed Callable
Certificates, Series 1998-1 (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Trust
Agreement dated as of June 1, 1998 (the "Trust Agreement"), between American
Residential Eagle, Inc., as Depositor, and First Union National Bank, as
Trustee, to which terms, provisions and conditions thereof the Holder of this
Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: the Class
A-1 and Class A-2 Certificates (the "Senior Certificates"), the Class M-1,
Class M-2, Class B, and Class X Certificates (the "Subordinate Certificates"),
and the Class O Certificate (the "Ownership Certificate").
On each Distribution Date, the Total Distribution Amount will be distributed
from the Certificate Account to Holders of each Class of Certificates according
to the terms of the Trust Agreement. All distributions or allocations made with
respect to each Class of Certificates on each Distribution Date shall be
allocated among the outstanding Certificates of such Class based on the
Certificate Principal Amount (or Percentage Interest) of each such Certificate.
Distributions on this Certificate will be made by check mailed to the Holder of
record of this Certificate on the immediately preceding Record Date at the
address of such Holder as it appears on the Certificate Register (except that
with respect to a Certificate registered in the name of a Clearing Agency or
its nominee, distributions will be made by wire transfer of immediately
available funds) or, with respect to any Holder of a Certificate evidencing not
less than $2,500,000 in initial Certificate Principal Amount (or 100% of the
Percentage Interest in such Class), by wire transfer in immediately available
funds, upon written request made to the Trustee or as otherwise permitted by
the Trustee. Wire transfers will be made at the expense of the Holder
requesting the same by deducting a wire transfer fee from the related
distribution. The final distribution on this Certificate will be made, after
due notice to the Holder of the pendency of such distribution, only upon
presentation and surrender of this Certificate at the Corporate Trust Office
(as defined below).
The Corporate Trust Office with respect to the presentment and surrender of
Certificates for the final distribution thereon and the presentment and
surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at 000 Xxxxx Xxxxx Xxxxxx NC 1179, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000, Attention: Structured Finance. The Trustee may designate
another address from time to time by notice to the Holders of the Certificates
and the Depositor.
The Trust Agreement permits the amendment thereof from time to time by the
Depositor and the Trustee with the consent of the Holders of not less than 66
2/3% of the aggregate outstanding Certificate Principal Amount (or Percentage
Interest) of each Class for the purpose of adding, changing or eliminating any
provisions of the Trust Agreement or modifying the rights of the Holders of the
Certificates thereunder; provided, however, that (i) no such amendment may be
made unless the Trustee receives an opinion of counsel as to certain tax
matters specified in the Trust Agreement and (ii) no such amendment may (a)
reduce the amount or delay the timing of distributions required to be made on
any Certificate without the consent of the Holder of such Certificate, or (b)
reduce the percentage of aggregate outstanding Certificate Principal Amount (or
Percentage Interest) of each Class the Holders of which are required to consent
to any such amendment, without the consent of the Holders of 100% of the
aggregate Certificate Principal Amount (or Percentage Interest) of each Class
affected thereby. Any consent by the Holder of this Certificate will be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any 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 Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Trust Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registerable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
Corporate Trust Office, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Certificate Registrar, duly
executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class of
authorized denominations evidencing the same initial Certificate Principal
Amount (or Percentage Interest) will be issued to the designated transferee or
transferees. As provided in the Trust Agreement and subject to certain
limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial
Certificate Principal Amount (or Percentage Interest) as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Certificates, to the extent provided in the Trust Agreement, will be
subject to purchase by the holder of the Class O Certificate for the price
specified in the Trust Agreement, on any Distribution Date on which the
aggregate Certificate Principal Amount of the Certificates is less than 35% of
the aggregate Certificate Principal Amount thereof as of the Closing Date, as
provided in the Trust Agreement. The Certificates will also be subject to
mandatory redemption in accordance with the Trust Agreement on any Distribution
Date on which the Underlying Bond is redeemed. In no event will the trust
created by the Trust Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Trust Agreement of a certain person named in the Trust Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent of any
of them may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
the Certificate Registrar nor any such agent shall be affected by any notice to
the contrary.
As provided in the Trust Agreement, this Certificate and the Trust Agreement
shall be construed in accordance with and governed by the laws of the State of
New York, without regard to the conflict of laws principles applied in the
State of New York. In the event of any conflict between the provisions of this
Certificate and the Trust Agreement, the Trust Agreement shall be controlling.
Any term used herein and not otherwise defined shall be as defined in the Trust
Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate
of the same Class of like principal to the above-named assignee and deliver
such Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
-------------------------- ------------------------------------------
Authorized Officer Signature Guaranteed
-------------------------- ------------------------------------------
Name of Institution NOTICE: The signature(s) of this assignment
must correspond with the name(s) on the
face of this Certificate without alteration
or any change whatsoever. The signature
must be guaranteed by a participant in the
Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
Exchanges Medallion Program. Notarized or
witnessed signatures are not acceptable as
guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number __________________ or, if mailed by check, to _________________
-----------------------------------------------------------------------------.
Applicable reports and statements should be mailed to ________________________
-----------------------------------------------------------------------------.
This information is provided by _____________________________________
the assignee name
EXHIBIT A-5
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS A FASIT REGULAR INTEREST CERTIFICATE. THIS CERTIFICATE DOES
NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED BY, THE
DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND IS NOT INSURED OR
GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
DISTRIBUTIONS IN REDUCTION OF THE CERTIFICATE PRINCIPAL AMOUNT OF THIS
CERTIFICATE MAY BE MADE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE
CERTIFICATE PRINCIPAL AMOUNT OF THIS CERTIFICATE AT ANY TIME MAY BE LESS THAN
THE AMOUNT SHOWN ON THE FACE HEREOF.
THIS CERTIFICATE IS SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRUST
AGREEMENT REFERRED TO HEREIN.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH CERTIFICATE ONLY (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT, (B) FOR SO LONG
AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A OR (C) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE 1933 ACT THAT IS ACQUIRING THE CERTIFICATE FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE 1933 ACT, SUBJECT TO THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE TRUST AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A CERTIFICATION TO
THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER AN EMPLOYEE BENEFIT PLAN SUBJECT
TO SECTION 406 OR SECTION 407 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THE TRUSTEE OF ANY SUCH PLAN OR A PERSON ACTING
ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF ANY SUCH PLAN OR
(2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH TRANSFEREE IS PURCHASING
SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL
ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(e) OF THE PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES ARE COVERED UNDER PTCE 95-60; OR (B) AN OPINION OF COUNSEL (A
"BENEFIT PLAN OPINION") SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND UPON
WHICH THE TRUSTEE AND THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE PLAN ASSETS
AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE AND
WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF
COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE OR THE DEPOSITOR.
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC, ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL, INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATES, SERIES 1998-1
CLASS B
Evidencing a beneficial interest in a single Collateralized
Callable Mortgage Bond issued by American Residential Eagle
Bond Trust 1998-1 and other assets in a trust fund
established by
AMERICAN RESIDENTIAL EAGLE, INC.
Initial Aggregate Certificate Initial Certificate
Principal Amount of the Class B Principal Amount of this
Certificates: $17,365,000.00 Certificate: $17,365,000.00
Certificate Cut-off Date: May 1, 1998
Interest Rate: Variable
NUMBER 1 CUSIP: 00000XXX0
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the initial Certificate
Principal Amount of this Certificate by the initial aggregate Certificate
Principal Amount of all Class B Certificates, both as specified above) in (i)
certain distributions of principal and interest on a Collateralized Callable
Mortgage Bond issued by American Residential Eagle Bond Trust 1998-1 (the
"Underlying Bond") acquired from American Residential Eagle, Inc. (the
"Depositor"), a Delaware corporation, (ii) such amounts and investments as from
time to time may be held in the Trust Fund established pursuant to the Trust
Agreement (as defined on the reverse hereof) and (iii) certain other assets, if
any, as described in the Trust Agreement (the foregoing assets hereinafter
collectively referred to as the "Trust Fund").
Distributions on this Certificate will be made monthly on the 25th day of
each month or, if such a day is not a Business Day, then the next succeeding
Business Day, commencing on June 25, 1998 (each, a "Distribution Date"), to the
Person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding the month in which the related
Distribution Date (the "Record Date"), in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount, if any,
required to be distributed to all the Certificates of the Class represented by
this Certificate. All sums distributable on this Certificate are payable in the
coin or currency of the United States of America which at the time of payment
is legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Trust Agreement or
be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
TRUSTEE'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
(REVERSE)
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATE, SERIES 1998-1
This Certificate is one of a duly authorized issue of certificates designated
as American Residential Eagle Certificate Trust 1998-1 Mortgage-Backed Callable
Certificates, Series 1998-1 (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Trust
Agreement dated as of June 1, 1998 (the "Trust Agreement"), between American
Residential Eagle, Inc., as Depositor, and First Union National Bank, as
Trustee, to which terms, provisions and conditions thereof the Holder of this
Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: the Class
A-1 and Class A-2 Certificates (the "Senior Certificates"), the Class M-1,
Class M-2, Class B, and Class X Certificates (the "Subordinate Certificates"),
and the Class O Certificate (the "Ownership Certificate").
On each Distribution Date, the Total Distribution Amount will be
distributed from the Certificate Account to Holders of each Class of
Certificates according to the terms of the Trust Agreement. All distributions
or allocations made with respect to each Class of Certificates on each
Distribution Date shall be allocated among the outstanding Certificates of such
Class based on the Certificate Principal Amount (or Percentage Interest) of
each such Certificate.
Distributions on this Certificate will be made by check mailed to the
Holder of record of this Certificate on the immediately preceding Record Date
at the address of such Holder as it appears on the Certificate Register (except
that with respect to a Certificate registered in the name of a Clearing Agency
or its nominee, distributions will be made by wire transfer of immediately
available funds) or, with respect to any Holder of a Certificate evidencing not
less than $2,500,000 in initial Certificate Principal Amount (or 100% of the
Percentage Interest in such Class), by wire transfer in immediately available
funds, upon written request made to the Trustee or as otherwise permitted by
the Trustee. Wire transfers will be made at the expense of the Holder
requesting the same by deducting a wire transfer fee from the related
distribution. The final distribution on this Certificate will be made, after
due notice to the Holder of the pendency of such distribution, only upon
presentation and surrender of this Certificate at the Corporate Trust Office
(as defined below).
The Corporate Trust Office with respect to the presentment and surrender
of Certificates for the final distribution thereon and the presentment and
surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at 000 Xxxxx Xxxxx Xxxxxx NC 1179, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000, Attention: Structured Finance. The Trustee may designate
another address from time to time by notice to the Holders of the Certificates
and the Depositor.
The Trust Agreement permits the amendment thereof from time to time by the
Depositor and the Trustee with the consent of the Holders of not less than 66
2/3% of the aggregate outstanding Certificate Principal Amount (or Percentage
Interest) of each Class for the purpose of adding, changing or eliminating any
provisions of the Trust Agreement or modifying the rights of the Holders of the
Certificates thereunder; provided, however, that (i) no such amendment may be
made unless the Trustee receives an opinion of counsel as to certain tax
matters specified in the Trust Agreement and (ii) no such amendment may (a)
reduce the amount or delay the timing of distributions required to be made on
any Certificate without the consent of the Holder of such Certificate, or (b)
reduce the percentage of aggregate outstanding Certificate Principal Amount (or
Percentage Interest) of each Class the Holders of which are required to consent
to any such amendment, without the consent of the Holders of 100% of the
aggregate Certificate Principal Amount (or Percentage Interest) of each Class
affected thereby. Any consent by the Holder of this Certificate will be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any 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 Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Certificate
Registrar, duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same initial Certificate
Principal Amount (or Percentage Interest) will be issued to the designated
transferee or transferees. As provided in the Trust Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial
Certificate Principal Amount (or Percentage Interest) as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Certificates, to the extent provided in the Trust Agreement, will be
subject to purchase by the holder of the Class O Certificate for the price
specified in the Trust Agreement, on any Distribution Date on which the
aggregate Certificate Principal Amount of the Certificates is less than 35% of
the aggregate Certificate Principal Amount thereof as of the Closing Date, as
provided in the Trust Agreement. The Certificates will also be subject to
mandatory redemption in accordance with the Trust Agreement on any Distribution
Date on which the Underlying Bond is redeemed. In no event will the trust
created by the Trust Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Trust Agreement of a certain person named in the Trust Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent of
any of them may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor the Certificate Registrar nor any such agent shall be affected by any
notice to the contrary.
As provided in the Trust Agreement, this Certificate and the Trust
Agreement shall be construed in accordance with and governed by the laws of the
State of New York, without regard to the conflict of laws principles applied in
the State of New York. In the event of any conflict between the provisions of
this Certificate and the Trust Agreement, the Trust Agreement shall be
controlling. Any term used herein and not otherwise defined shall be as defined
in the Trust Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate
of the same Class of like principal to the above-named assignee and deliver
such Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
-------------------------- ------------------------------------------
Authorized Officer Signature Guaranteed
-------------------------- ------------------------------------------
Name of Institution NOTICE: The signature(s) of this assignment
must correspond with the name(s) on the
face of this Certificate without alteration
or any change whatsoever. The signature
must be guaranteed by a participant in the
Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
Exchanges Medallion Program. Notarized or
witnessed signatures are not acceptable as
guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number __________________ or, if mailed by check, to _________________
------------------------------------------------------------------------------
Applicable reports and statements should be mailed to ________________________
------------------------------------------------------------------------------
This information is provided by _____________________________________
the assignee name
EXHIBIT A-6
FORM OF CLASS X CERTIFICATE
THIS CERTIFICATE IS A FASIT HIGH YIELD REGULAR INTEREST CERTIFICATE. THIS
CERTIFICATE DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT
GUARANTEED BY, THE DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND
IS NOT INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
THIS CERTIFICATE IS NOT ENTITLED TO DISTRIBUTIONS OF PRINCIPAL AND WILL NOT
ACCRUE INTEREST. THE HOLDER OF THIS CERTIFICATE WILL BE ENTITLED TO CERTAIN
DISTRIBUTION AS PROVIDED IN THE TRUST AGREEMENT. THIS CERTIFICATE IS
SUBORDINATE IN RIGHT OF PAYMENT AS DESCRIBED IN THE TRUST AGREEMENT REFERRED TO
HEREIN.
THIS CERTIFICATE IS NOT ENTITLED TO DISTRIBUTIONS OF PRINCIPAL AND WILL NOT
ACCRUE INTEREST. THE HOLDER OF THIS CERTIFICATE WILL BE ENTITLED ONLY TO
CERTAIN LIMITED DISTRIBUTIONS AS PROVIDED IN THE TRUST AGREEMENT.
NEITHER THIS CERTIFICATE, NOR ANY BENEFICIAL INTEREST IN THIS CERTIFICATE, MAY
BE TRANSFERRED, SOLD, PLEDGED, OR OTHERWISE DISPOSED OF UNLESS PRIOR TO SUCH
DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE AN AFFIDAVIT
STATING (i) THAT THE PROPOSED TRANSFEREE IS AND ELIGIBLE CORPORATION WITHIN THE
MEANING OF SECTION 860L(A)(2) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND WILL BE AN ELIGIBLE CORPORATION AS OF THE DATE OF TRANSFER,
AND THAT THE PROPOSED TRANSFEREE IS NOT ACQUIRING THIS CERTIFICATE FOR THE
ACCOUNT OF, OR AS AGENT (INCLUDING A BROKER, NOMINEE, OR OTHER MIDDLEMAN) FOR,
ANY PERSON OR ENTITY FROM WHICH IT HAS NOT RECEIVED AN AFFIDAVIT SUBSTANTIALLY
IN THE FORM EXHIBIT D-1 TO THE TRUST AGREEMENT. FOR THESE PURPOSES, AN ELIGIBLE
CORPORATION IS ANY DOMESTIC C CORPORATION OTHER THAN (I) A CORPORATION THAT IS
EXEMPT FROM OR IS NOT SUBJECT TO FEDERAL INCOME TAX, (II) AN INVESTMENT COMPANY
THAT COULD QUALIFY AS A REGULATED INVESTMENT COMPANY UNDER SECTION 851(A) OF
THE CODE, (III) A REMIC (AS DEFINED IN THE CODE), OR (IV) A COOP TO WHICH
SUBCHAPTER T OF THE CODE APPLIES.
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 19933, AS
AMENDED, (THE "1933 ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
CERTIFICATE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION, UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH CERTIFICATE ONLY (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT, (B) FOR SO LONG
AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A OR (C) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE 1933 ACT THAT IS ACQUIRING THE CERTIFICATE FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE 1933 ACT, SUBJECT TO THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE TRUST AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A CERTIFICATION TO
THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER AN EMPLOYEE BENEFIT PLAN SUBJECT
TO SECTION 406 OR SECTION 407 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THE TRUSTEE OF ANY SUCH PLAN OR A PERSON ACTING
ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF ANY SUCH PLAN OR
(2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH TRANSFEREE IS PURCHASING
SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL
ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(e) OF THE PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES ARE COVERED UNDER PTCE 95-60; OR (B) AN OPINION OF COUNSEL (A
"BENEFIT PLAN OPINION") SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND UPON
WHICH THE TRUSTEE AND THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE PLAN ASSETS
AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE AND
WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF
COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE OR THE DEPOSITOR.
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATES, SERIES 1998-1
CLASS X
Evidencing a beneficial interest in a single Collateralized
Callable Mortgage Bond issued by American Residential Eagle
Bond Trust 1998-1 and other assets in a trust fund
established by
AMERICAN RESIDENTIAL EAGLE, INC.
Percentage Interest: 100% Cut-off Date: May 1, 1998
NUMBER 1
THIS CERTIFIES THAT [ ]is the registered owner of the Percentage Interest
evidenced by this Certificate in (i) certain distributions on a Collateralized
Callable Mortgage Bond issued by American Residential Eagle Bond Trust 1998-1
(the "Underlying Bond") acquired from American Residential Eagle, Inc. (the
"Depositor"), a Delaware corporation, (ii) such amounts and investments as from
time to time may be held in the Trust Fund established pursuant to the Trust
Agreement (as defined on the reverse hereof) and (iii) certain other assets, if
any, as described in the Trust Agreement (the foregoing assets hereinafter
collectively referred to as the "Trust Fund").
Distributions on this Certificate will be made monthly on the 25th day of
each month or, if such a day is not a Business Day, then the next succeeding
Business Day, commencing on June 25, 1998 (each, a "Distribution Date"), to the
Person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding the related Distribution Date (the
"Record Date"), in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount, if any, required to be
distributed to all the Certificates of the Class represented by this
Certificate. All sums distributable on this Certificate are payable in the coin
or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Trust Agreement or
be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
TRUSTEE'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
(REVERSE)
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATE, SERIES 1998-1
This Certificate is one of a duly authorized issue of certificates designated
as American Residential Eagle Certificate Trust 1998-1 Mortgage-Backed Callable
Certificates, Series 1998-1 (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Trust
Agreement dated as of June 1, 1998 (the "Trust Agreement"), between American
Residential Eagle, Inc., as Depositor, and First Union National Bank, as
Trustee, to which terms, provisions and conditions thereof the Holder of this
Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: the Class
A-1 and Class A-2 Certificates (the "Senior Certificates"), the Class M-1,
Class M-2, Class B, and Class X Certificates (the "Subordinate Certificates"),
and the Class O Certificate (the "Ownership Certificate").
On each Distribution Date, the Total Distribution Amount will be
distributed from the Certificate Account to Holders of each Class of
Certificates according to the terms of the Trust Agreement. All distributions
or allocations made with respect to each Class of Certificates on each
Distribution Date shall be allocated among the outstanding Certificates of such
Class based on the Certificate Principal Amount (or Percentage Interest) of
each such Certificate.
Distributions on this Certificate will be made by check mailed to the
Holder of record of this Certificate on the immediately preceding Record Date
at the address of such Holder as it appears on the Certificate Register (except
that with respect to a Certificate registered in the name of a Clearing Agency
or its nominee, distributions will be made by wire transfer of immediately
available funds) or, with respect to any Holder of a Certificate evidencing not
less than $2,500,000 in initial Certificate Principal Amount (or 100% of the
Percentage Interest in such Class), by wire transfer in immediately available
funds, upon written request made to the Trustee or as otherwise permitted by
the Trustee. Wire transfers will be made at the expense of the Holder
requesting the same by deducting a wire transfer fee from the related
distribution. The final distribution on this Certificate will be made, after
due notice to the Holder of the pendency of such distribution, only upon
presentation and surrender of this Certificate at the Corporate Trust Office
(as defined below).
The Corporate Trust Office with respect to the presentment and surrender
of Certificates for the final distribution thereon and the presentment and
surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at 000 Xxxxx Xxxxx Xxxxxx NC 1179, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000, Attention: Structured Finance. The Trustee may designate
another address from time to time by notice to the Holders of the Certificates
and the Depositor.
The Trust Agreement permits the amendment thereof from time to time by the
Depositor and the Trustee with the consent of the Holders of not less than 66
2/3% of the aggregate outstanding Certificate Principal Amount (or Percentage
Interest) of each Class for the purpose of adding, changing or eliminating any
provisions of the Trust Agreement or modifying the rights of the Holders of the
Certificates thereunder; provided, however, that (i) no such amendment may be
made unless the Trustee receives an opinion of counsel as to certain tax
matters specified in the Trust Agreement and (ii) no such amendment may (a)
reduce the amount or delay the timing of distributions required to be made on
any Certificate without the consent of the Holder of such Certificate, or (b)
reduce the percentage of aggregate outstanding Certificate Principal Amount (or
Percentage Interest) of each Class the Holders of which are required to consent
to any such amendment, without the consent of the Holders of 100% of the
aggregate Certificate Principal Amount (or Percentage Interest) of each Class
affected thereby. Any consent by the Holder of this Certificate will be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any 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 Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Certificate
Registrar, duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same initial Certificate
Principal Amount (or Percentage Interest) will be issued to the designated
transferee or transferees. As provided in the Trust Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial
Certificate Principal Amount (or Percentage Interest) as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Certificates, to the extent provided in the Trust Agreement, will be
subject to purchase by the holder of the Class O Certificate for the price
specified in the Trust Agreement, on any Distribution Date on which the
aggregate Certificate Principal Amount of the Certificates is less than 35% of
the aggregate Certificate Principal Amount thereof as of the Closing Date, as
provided in the Trust Agreement. The Certificates will also be subject to
mandatory redemption in accordance with the Trust Agreement on any Distribution
Date on which the Underlying Bond is redeemed. In no event will the trust
created by the Trust Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Trust Agreement of a certain person named in the Trust Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent of
any of them may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor the Certificate Registrar nor any such agent shall be affected by any
notice to the contrary.
As provided in the Trust Agreement, this Certificate and the Trust
Agreement shall be construed in accordance with and governed by the laws of the
State of New York, without regard to the conflict of laws principles applied in
the State of New York. In the event of any conflict between the provisions of
this Certificate and the Trust Agreement, the Trust Agreement shall be
controlling. Any term used herein and not otherwise defined shall be as defined
in the Trust Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate
of the same Class of like principal to the above-named assignee and deliver
such Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
-------------------------- ------------------------------------------
Authorized Officer Signature Guaranteed
-------------------------- ------------------------------------------
Name of Institution NOTICE: The signature(s) of this assignment
must correspond with the name(s) on the
face of this Certificate without alteration
or any change whatsoever. The signature
must be guaranteed by a participant in the
Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
Exchanges Medallion Program. Notarized or
witnessed signatures are not acceptable as
guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number __________________ or, if mailed by check, to _________________
-----------------------------------------------------------------------------.
Applicable reports and statements should be mailed to ________________________
-----------------------------------------------------------------------------.
This information is provided by _____________________________________
the assignee name
EXHIBIT A-7
FORM OF CLASS O CERTIFICATE
THIS CERTIFICATE IS A FASIT OWNERSHIP INTEREST CERTIFICATE. THIS CERTIFICATE
DOES NOT EVIDENCE AN OBLIGATION OF, OR AN INTEREST IN, AND IS NOT GUARANTEED
BY, THE DEPOSITOR, THE TRUSTEE, OR ANY AFFILIATE OF ANY OF THEM AND IS NOT
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR PRIVATE INSURER.
THIS CERTIFICATE IS NOT ENTITLED TO DISTRIBUTIONS OF PRINCIPAL AND WILL NOT
ACCRUE INTEREST. THE HOLDER OF THIS CERTIFICATE WILL BE ENTITLED ONLY TO
CERTAIN LIMITED DISTRIBUTIONS AS PROVIDED IN THE TRUST AGREEMENT.
NEITHER THIS CERTIFICATE, NOR ANY BENEFICIAL INTEREST IN THIS CERTIFICATE, MAY
BE TRANSFERRED, SOLD, PLEDGED, OR OTHERWISE DISPOSED OF UNLESS PRIOR TO SUCH
DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE AN AFFIDAVIT
STATING (i) THAT THE PROPOSED TRANSFEREE IS AND ELIGIBLE CORPORATION WITHIN THE
MEANING OF SECTION 860L(A)(2) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND WILL BE AN ELIGIBLE CORPORATION AS OF THE DATE OF TRANSFER,
AND THAT THE PROPOSED TRANSFEREE IS NOT ACQUIRING THIS CERTIFICATE FOR THE
ACCOUNT OF, OR AS AGENT (INCLUDING A BROKER, NOMINEE, OR OTHER MIDDLEMAN) FOR,
ANY PERSON OR ENTITY FROM WHICH IT HAS NOT RECEIVED AN AFFIDAVIT SUBSTANTIALLY
IN THE FORM EXHIBIT D-1 TO THE TRUST AGREEMENT. FOR THESE PURPOSES, AN ELIGIBLE
CORPORATION IS ANY DOMESTIC C CORPORATION OTHER THAN (I) A CORPORATION THAT IS
EXEMPT FROM OR IS NOT SUBJECT TO FEDERAL INCOME TAX, (II) AN INVESTMENT COMPANY
THAT COULD QUALIFY AS A REGULATED INVESTMENT COMPANY UNDER SECTION 851(A) OF
THE CODE, (III) A REMIC (AS DEFINED IN THE CODE), OR (IV) A COOP TO WHICH
SUBCHAPTER T OF THE CODE APPLIES.
THE HOLDER OF THIS CERTIFICATE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER SUCH CERTIFICATE ONLY (A) PURSUANT TO A REGISTRATION
STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE 1933 ACT, (B) FOR SO LONG
AS THIS CERTIFICATE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A UNDER THE 1933 ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A OR (C) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE
501 UNDER THE 1933 ACT THAT IS ACQUIRING THE CERTIFICATE FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL "ACCREDITED INVESTOR," FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION
WITH, ANY DISTRIBUTION IN VIOLATION OF THE 1933 ACT, SUBJECT TO THE TRUSTEE'S
RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING IN THE TRUST AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE SHALL BE REGISTERED UNLESS THE PROSPECTIVE
TRANSFEREE PROVIDES THE TRUSTEE AND THE DEPOSITOR WITH (A) A CERTIFICATION TO
THE EFFECT THAT SUCH TRANSFEREE (1) IS NEITHER AN EMPLOYEE BENEFIT PLAN SUBJECT
TO SECTION 406 OR SECTION 407 OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE"), THE TRUSTEE OF ANY SUCH PLAN OR A PERSON ACTING
ON BEHALF OF ANY SUCH PLAN NOR A PERSON USING THE ASSETS OF ANY SUCH PLAN OR
(2) IF SUCH TRANSFEREE IS AN INSURANCE COMPANY, SUCH TRANSFEREE IS PURCHASING
SUCH CERTIFICATES WITH FUNDS CONTAINED IN AN "INSURANCE COMPANY GENERAL
ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(e) OF THE PROHIBITED TRANSACTION
CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THAT THE PURCHASE AND HOLDING OF SUCH
CERTIFICATES ARE COVERED UNDER PTCE 95-60; OR (B) AN OPINION OF COUNSEL (A
"BENEFIT PLAN OPINION") SATISFACTORY TO THE TRUSTEE AND THE DEPOSITOR, AND UPON
WHICH THE TRUSTEE AND THE DEPOSITOR SHALL BE ENTITLED TO RELY, TO THE EFFECT
THAT THE PURCHASE OR HOLDING OF SUCH CERTIFICATE BY THE PROSPECTIVE TRANSFEREE
WILL NOT RESULT IN THE ASSETS OF THE TRUST FUND BEING DEEMED TO BE PLAN ASSETS
AND SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF ERISA OR THE CODE AND
WILL NOT SUBJECT THE TRUSTEE OR THE DEPOSITOR TO ANY OBLIGATION IN ADDITION TO
THOSE UNDERTAKEN BY SUCH ENTITIES IN THE TRUST AGREEMENT, WHICH OPINION OF
COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE OR THE DEPOSITOR.
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATES, SERIES 1998-1
CLASS O
Evidencing a beneficial interest in a single Collateralized
Callable Mortgage Bond issued by American Residential Eagle
Bond Trust 1998-1 and other assets in a trust fund
established by
AMERICAN RESIDENTIAL EAGLE, INC.
Percentage Interest: 100% Cut-off Date: May 1, 1998
NUMBER 1
THIS CERTIFIES THAT [ ] is the registered owner of the Percentage Interest
evidenced by this Certificate in (i) certain distributions on a Collateralized
Callable Mortgage Bond issued by American Residential Eagle Bond Trust 1998-1
(the "Underlying Bond") acquired from American Residential Eagle, Inc. (the
"Depositor"), a Delaware corporation, (ii) such amounts and investments as from
time to time may be held in the Trust Fund established pursuant to the Trust
Agreement (as defined on the reverse hereof) and (iii) certain other assets, if
any, as described in the Trust Agreement (the foregoing assets hereinafter
collectively referred to as the "Trust Fund").
Distributions on this Certificate will be made monthly on the 25th day of
each month or, if such a day is not a Business Day, then the next succeeding
Business Day, commencing on June 25, 1998 (each, a "Distribution Date"), to the
Person in whose name this Certificate is registered at the close of business on
the Business Day immediately preceding the related Distribution Date (the
"Record Date"), in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount, if any, required to be
distributed to all the Certificates of the Class represented by this
Certificate. All sums distributable on this Certificate are payable in the coin
or currency of the United States of America which at the time of payment is
legal tender for the payment of public and private debts.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Certificate.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee, whose name appears below by manual signature, this
Certificate shall not be entitled to any benefit under the Trust Agreement or
be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
TRUSTEE'S CERTIFICATE AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
FIRST UNION NATIONAL BANK,
as Trustee
By:________________________________
Authorized Signatory
Dated: June 17, 1998
(REVERSE)
AMERICAN RESIDENTIAL EAGLE CERTIFICATE TRUST 1998-1
MORTGAGE-BACKED CALLABLE CERTIFICATE, SERIES 1998-1
This Certificate is one of a duly authorized issue of certificates designated
as American Residential Eagle Certificate Trust 1998-1 Mortgage-Backed Callable
Certificates, Series 1998-1 (the "Certificates"), representing all or part of a
beneficial ownership interest in a Trust Fund established pursuant to a Trust
Agreement dated as of June 1, 1998 (the "Trust Agreement"), between American
Residential Eagle, Inc., as Depositor, and First Union National Bank, as
Trustee, to which terms, provisions and conditions thereof the Holder of this
Certificate by virtue of the acceptance hereof assents, and by which such
Holder is bound. The Certificates consist of the following Classes: the Class
A-1 and Class A-2 Certificates (the "Senior Certificates"), the Class M-1,
Class M-2, Class B, and Class X Certificates (the "Subordinate Certificates"),
and the Class O Certificate (the "Ownership Certificate").
On each Distribution Date, the Total Distribution Amount will be
distributed from the Certificate Account to Holders of each Class of
Certificates according to the terms of the Trust Agreement. All distributions or
allocations made with respect to each Class of Certificates on each Distribution
Date shall be allocated among the outstanding Certificates of such Class based
on the Certificate Principal Amount (or Percentage Interest) of each such
Certificate.
Distributions on this Certificate will be made by check mailed to the
Holder of record of this Certificate on the immediately preceding Record Date
at the address of such Holder as it appears on the Certificate Register (except
that with respect to a Certificate registered in the name of a Clearing Agency
or its nominee, distributions will be made by wire transfer of immediately
available funds) or, with respect to any Holder of a Certificate evidencing not
less than $2,500,000 in initial Certificate Principal Amount (or 100% of the
Percentage Interest in such Class), by wire transfer in immediately available
funds, upon written request made to the Trustee or as otherwise permitted by
the Trustee. Wire transfers will be made at the expense of the Holder
requesting the same by deducting a wire transfer fee from the related
distribution. The final distribution on this Certificate will be made, after
due notice to the Holder of the pendency of such distribution, only upon
presentation and surrender of this Certificate at the Corporate Trust Office
(as defined below).
The Corporate Trust Office with respect to the presentment and surrender
of Certificates for the final distribution thereon and the presentment and
surrender of the Certificates for any other purpose is the corporate trust
office of the Trustee at 000 Xxxxx Xxxxx Xxxxxx NC 1179, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000-0000, Attention: Structured Finance. The Trustee may designate
another address from time to time by notice to the Holders of the Certificates
and the Depositor.
The Trust Agreement permits the amendment thereof from time to time by the
Depositor and the Trustee with the consent of the Holders of not less than 66
2/3% of the aggregate outstanding Certificate Principal Amount (or Percentage
Interest) of each Class for the purpose of adding, changing or eliminating any
provisions of the Trust Agreement or modifying the rights of the Holders of the
Certificates thereunder; provided, however, that (i) no such amendment may be
made unless the Trustee receives an opinion of counsel as to certain tax
matters specified in the Trust Agreement and (ii) no such amendment may (a)
reduce the amount or delay the timing of distributions required to be made on
any Certificate without the consent of the Holder of such Certificate, or (b)
reduce the percentage of aggregate outstanding Certificate Principal Amount (or
Percentage Interest) of each Class the Holders of which are required to consent
to any such amendment, without the consent of the Holders of 100% of the
aggregate Certificate Principal Amount (or Percentage Interest) of each Class
affected thereby. Any consent by the Holder of this Certificate will be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any 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 Certificate. The Trust Agreement also permits the amendment
thereof, in certain circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the Corporate Trust Office, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Certificate
Registrar, duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class of authorized denominations evidencing the same initial Certificate
Principal Amount (or Percentage Interest) will be issued to the designated
transferee or transferees. As provided in the Trust Agreement and subject to
certain limitations therein set forth, this Certificate is exchangeable for new
Certificates of the same Class evidencing the same aggregate initial
Certificate Principal Amount (or Percentage Interest) as requested by the
Holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
The Certificates, to the extent provided in the Trust Agreement will be
subject to purchase by the holder of the Class O Certificate for the price
specified in the Trust Agreement, on any Distribution Date on which the
aggregate Certificate Principal Amount of the Certificates is less than 35% of
the aggregate Certificate Principal Amount thereof as of the Closing Date, as
provided in the Trust Agreement. The Certificates will also be subject to
mandatory redemption in accordance with the Trust Agreement on any Distribution
Date on which the Underlying Bond is redeemed. In no event will the trust
created by the Trust Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants living at the date of the
Trust Agreement of a certain person named in the Trust Agreement.
The Depositor, the Trustee and the Certificate Registrar and any agent of
any of them may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor the Certificate Registrar nor any such agent shall be affected by any
notice to the contrary.
As provided in the Trust Agreement, this Certificate and the Trust
Agreement shall be construed in accordance with and governed by the laws of the
State of New York, without regard to the conflict of laws principles applied in
the State of New York. In the event of any conflict between the provisions of
this Certificate and the Trust Agreement, the Trust Agreement shall be
controlling. Any term used herein and not otherwise defined shall be as defined
in the Trust Agreement.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s) and assign(s) and
transfer(s) unto
------------------------------------------------------------------------------
------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee
and social security number or employer identification number)
------------------------------------------------------------------------------
the within Certificate stating in the names of the undersigned in the
Certificate Register and does hereby irrevocably constitute and appoint
------------------------------------------------------------------------------
to transfer such Certificate in such Certificate Register of the Trust.
I [we] further direct the Certificate Registrar to issue a new Certificate
of the same Class of like principal to the above-named assignee and deliver
such Certificate to the following address:
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Dated:____________________ __________________________________________
Signature by or on behalf of Assignor
-------------------------- ------------------------------------------
Authorized Officer Signature Guaranteed
-------------------------- ------------------------------------------
Name of Institution NOTICE: The signature(s) of this assignment
must correspond with the name(s) on the
face of this Certificate without alteration
or any change whatsoever. The signature
must be guaranteed by a participant in the
Securities Transfer Agents Medallion
Program, the New York Stock Exchange
Medallion Signature Program or the Stock
Exchanges Medallion Program. Notarized or
witnessed signatures are not acceptable as
guaranteed signatures.
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Registrar. Distributions shall be made by wire transfer in
immediately available funds to
------------------------------------------------------------------------------
for the account of ___________________________________________________________
account number __________________ or, if mailed by check, to _________________
-----------------------------------------------------------------------------.
Applicable reports and statements should be mailed to ________________________
-----------------------------------------------------------------------------.
This information is provided by _____________________________________
the assignee name
EXHIBIT B-1
[RESERVED]
EXHIBIT B-2
[RESERVED]
EXHIBIT B-3
[RESERVED]
EXHIBIT B-4
[RESERVED]
EXHIBIT C
[RESERVED]
EXHIBIT D-1
FORM OF CLASS O CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEREE)
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], _________________ being first duly sworn, deposes
and says:
1. That he [she] is [title of officer] ___________ _____________ of
[name of Purchaser] ________________________ _________________ (the
"Purchaser"), a corporation duly organized and existing under the laws of the
State of __________, on behalf of which he [she] makes this affidavit.
2. That the Purchaser's Taxpayer Identification Number is [ ].
3. That the Purchaser is and Eligible Corporation within the
meaning of Section 860L(a)(2) of the Internal Revenue Code of
1986, as amended (the "Code") and will be an Eligible
Corporation as of [date of transfer], and that the Purchaser is
not acquiring the Class O Certificate (as defined in the
Agreement) for the account of, or as agent (including a broker,
nominee, or other middleman) for, any person or entity from
which it has not received an affidavit substantially in the form
of this affidavit. For these purposes, an Eligible Corporation
is any domestic C corporation other than (i) a corporation that
is exempt from or is not subject to federal income tax, (ii) an
investment company that could qualify as a regulated investment
company under section 851(a) of the Code, (iii) a REMIC, or (iv)
a coop to which subchapter T of the Code applies.
4. That the Purchaser is not, and on __________ [insert date of
transfer of Class O Certificate to Purchaser] will not be, and
is not and on such date will not be investing the assets of, an
employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or a plan subject to
Code Section 4975 or a person or entity that is using the assets
of any employee benefit plan or other plan to acquire the Class
O Certificate.
5. That the Purchaser hereby acknowledges that under the terms of the
Trust Agreement (the "Agreement") among American Residential Eagle, Inc., and
First Union National Bank, as Trustee, dated as of June 1, 1998, no transfer of
the Class O Certificate shall be permitted to be made to any person unless the
Trustee has received a certificate from such transferee to the effect that such
transferee is an Eligible Corporation and not an employee benefit plan subject
to ERISA or a plan subject to Section 4975 of the Code and is not using the
assets of any employee benefit plan or other plan to acquire Class O
Certificates.
6. That the Purchaser does not hold Class O Certificate as nominee to
facilitate the clearance and settlement of such securities through electronic
book-entry changes in accounts of participating organizations (such entity, a
"Book-Entry Nominee").
7. That the Purchaser does not have the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to such Class O Certificate.
8. That the Purchaser will not transfer the Class O Certificate to
any person or entity (i) as to which the Purchaser has actual knowledge that
the requirements set forth in paragraph 3, paragraph 6 or paragraph 10 hereof
are not satisfied or that the Purchaser has reason to believe does not satisfy
the requirements set forth in paragraph 7 hereof, and (ii) without obtaining
from the prospective Purchaser an affidavit substantially in this form and
providing to the Trustee a written statement substantially in the form of
Exhibit G to the Agreement.
9. That the Purchaser understands that, as the holder of the Class O
Certificate, the Purchaser may incur tax liabilities in excess of any cash
flows generated by the interest and that it intends to pay taxes associated
with holding such Class O Certificate as they become due.
10. That the Purchaser agrees to such amendments of the Trust
Agreement as may be required to further effectuate the restrictions on transfer
of the Class O Certificate to a person other than an Eligible Corporation or a
book-Entry Nominee, or a person that does not satisfy the requirements of
paragraph 7 and paragraph 10 hereof.
IN WITNESS WHEREOF, the Purchaser has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
[title of officer] this _____ day of __________, 19__.
---------------------------------
[name of Purchaser]
By:______________________________
Name:
Title:
Personally appeared before me the above-named [name of officer]
________________, known or proved to me to be the same person who executed the
foregoing instrument and to be the [title of officer] _________________ of the
Purchaser, and acknowledged to me that he [she] executed the same as his [her]
free act and deed and the free act and deed of the Purchaser.
Subscribed and sworn before me this _____ day of __________, 19__.
NOTARY PUBLIC
------------------------------
COUNTY OF_____________________
STATE OF______________________
My commission expires the _____ day of __________, 19__.
EXHIBIT D-2
CLASS O CERTIFICATE TRANSFER AFFIDAVIT (TRANSFEROR)
_______________
Date
Re: American Residential Eagle Certificate Trust 1998-1
Mortgage Backed Callable Certificates, Series 1998-1
_______________________ (the "Transferor") has reviewed the attached
affidavit of _____________________________ (the "Transferee"), and has no
actual knowledge that such affidavit is not true and has no reason to believe
that the information contained in paragraph 7 thereof is not true, and has no
reason to believe that the Transferee has the intention to impede the
assessment or collection of any federal, state or local taxes legally required
to be paid with respect to the Class O Certificate. In addition, the Transferor
has conducted a reasonable investigation at the time of the transfer and found
that the Transferee had historically paid its debts as they came due and found
no significant evidence to indicate that the Transferee will not continue to
pay its debts as they become due.
Very truly yours,
-------------------------------
Name:
Title:
EXHIBIT E
[RESERVED]
EXHIBIT F
FORM OF RULE 144A TRANSFER CERTIFICATE
Re: American Residential Eagle Certificate Trust 1998-1
Mortgage Backed Callable Certificates, Series 1998-1
Reference is hereby made to the Trust Agreement dated as of June 1,
1998 (the "Trust Agreement") among American Residential Eagle, Inc., as
Depositor, and First Union National Bank, as Trustee. Capitalized terms used
but not defined herein shall have the meanings given to them in the Trust
Agreement.
This letter relates to $_________ initial Certificate Balance of
Class Certificates which are held in the form of Definitive Certificates
registered in the name of (the "Transferor"). The Transferor has requested a
transfer of such Definitive Certificates for Definitive Certificates of such
Class registered in the name of [insert name of transferee].
In connection with such request, and in respect of such Certificates,
the Transferor hereby certifies that such Certificates are being transferred in
accordance with (i) the transfer restrictions set forth in the Trust Agreement
and the Certificates and (ii) Rule 144A under the Securities Act to a purchaser
that the Transferor reasonably believes is a "qualified institutional buyer"
within the meaning of Rule 144A purchasing for its own account or for the
account of a "qualified institutional buyer," which purchaser is aware that the
sale to it is being made in reliance upon Rule 144A, in a transaction meeting
the requirements of Rule 144A and in accordance with any applicable securities
laws of any state of the United States or any other applicable jurisdiction.
This certificate and the statements contained herein are made for
your benefit and the benefit of the Placement Agent and the Depositor.
-------------------------------------
[Name of Transferor]
By:__________________________________
Name:
Title:
Dated: ___________, ____
EXHIBIT G
FORM OF PURCHASER'S LETTER FOR
INSTITUTIONAL ACCREDITED INVESTOR
________________
Date
Dear Sirs:
In connection with our proposed purchase of $______________ principal
amount of Mortgage Backed Callable Certificates, Series 1998-1 (the "Privately
Offered Certificates") of American Residential Eagle, Inc. (the "Depositor"),
we confirm that:
(1) We understand that the Privately Offered Certificates have not been,
and will not be, registered under the Securities Act of 1933, as
amended (the "Securities Act"), and may not be sold except as
permitted in the following sentence. We agree, on our own behalf and
on behalf of any accounts for which we are acting as hereinafter
stated, that if we should sell any Privately Offered Certificates
within three years of the later of the date of original issuance of
the Privately Offered Certificates or the last day on which such
Privately Offered Certificates are owned by the Depositor or any
affiliate of the Depositor (which includes the Placement Agent) we
will do so only (A) to the Depositor, (B) to "qualified institutional
buyers" (within the meaning of Rule 144A under the Securities Act) in
accordance with Rule 144A under the Securities Act ("QIBs"), (C)
pursuant to the exemption from registration provided by Rule 144
under the Securities Act, or (D) to an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act that is not a QIB (an
"Institutional Accredited Investor") which, prior to such transfer,
delivers to the Trustee under the Trust Agreement dated as of June 1,
1998 among the Depositor and First Union National Bank, as Trustee
(the "Trustee"), a signed letter in the form of this letter; and we
further agree, in the capacities stated above, to provide to any
person purchasing any of the Privately Offered Certificates from us a
notice advising such purchaser that resales of the Privately Offered
Certificates are restricted as stated herein.
(2) We understand that, in connection with any proposed resale of any
Privately Offered Certificates to an Institutional Accredited
Investor, we will be required to furnish to the Trustee and the
Depositor a certification from such transferee in the form hereof to
confirm that the proposed sale is being made pursuant to an exemption
from, or in a transaction not subject to, the registration
requirements of the Securities Act. We further understand that the
Privately Offered Certificates purchased by us will bear a legend to
the foregoing effect.
(3) We are acquiring the Privately Offered Certificates for investment
purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act. We have
such knowledge and experience in financial and business matters as to
be capable of evaluating the merits and risks of our investment in
the Privately Offered Certificates, and we and any account for which
we are acting are each able to bear the economic risk of such
investment.
(4) We are an Institutional Accredited Investor and we are acquiring the
Privately Offered Certificates purchased by us for our own account or
for one or more accounts (each of which is an Institutional
Accredited Investor) as to each of which we exercise sole investment
discretion.
(5) We have received such information as we deem necessary in order to
make our investment decision.
Terms used in this letter which are not otherwise defined herein have
the respective meanings assigned thereto in the Trust Agreement.
You and the Depositor are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
----------------------------------
[Purchaser]
By________________________________
Name:
Title:
EXHIBIT H
[FORM OF ERISA TRANSFER AFFIDAVIT]
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is the ______________________ of (the "Investor"),
a [corporation duly organized] and existing under the laws of __________, on
behalf of which he makes this affidavit.
2. The Investor either (x) is not an employee benefit plan subject to
Section 406 or Section 407 of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (the "Code"), the Trustee of any such plan or a person acting
on behalf of any such plan nor a person using the assets of any such plan or
(2) if the Investor is an insurance company, such Investor is purchasing such
Certificates with funds contained in an "Insurance Company General Account" (as
such term is defined in Section v(e) of the Prohibited Transaction Class
Exemption 95-60 ("PTCE 95-60")) and that the purchase and holding of such
Certificates are covered under PTCE 95-60; or (y) shall deliver to the Trustee
and the Depositor an opinion of counsel (a "Benefit Plan Opinion") satisfactory
to the Trustee and the Depositor, and upon which the Trustee and the Depositor
shall be entitled to rely, to the effect that the purchase or holding of such
Certificate by the Investor will not result in the assets of the Trust Fund
being deemed to be plan assets and subject to the prohibited transaction
provisions of ERISA or the Code and will not subject the Trustee or the
Depositor to any obligation in addition to those undertaken by such entities in
the Trust Agreement, which opinion of counsel shall not be an expense of the
Trustee or the Depositor.
3. The Investor hereby acknowledges that under the terms of the Trust
Agreement (the "Agreement") among American Residential Eagle, Inc., as
Depositor, and First Union National Bank, as Trustee, dated as of June 1, 1998,
no transfer of the ERISA-Restricted Certificates shall be permitted to be made
to any person unless the Depositor and Trustee have received a certificate from
such transferee in the form hereof.
IN WITNESS WHEREOF, the Investor has caused this instrument to be
executed on its behalf, pursuant to proper authority, by its duly authorized
officer, duly attested, this ____ day of _______________, 199 .
---------------------------------
[Investor]
By:______________________________
Name:
Title:
EXHIBIT I
FORM OF CERTIFICATEHOLDER DISTRIBUTION SUMMARY
American Residential Eagle Series 1998-1
Certificateholder Distribution Summary
-------- ----------- ------------ ------------ -------------- ------------- -------- ------------- ------------- ----------------
Certificate Certificate Beginning Current Ending Cumulative
Class Pass-Through Certificate Interest Realized Certificate Total Realized
Class CUSIP Description Rate Balance Distribution Loss Balance Distribution Losses
-------- ----------- ------------ ------------ -------------- ------------- -------- ------------- ------------- ----------------
A-1 00000XXX0 SEQ 5.75000 % 143,970,000.00 0.00
A-2 00000XXX0 SEQ 5.87000 % 232,093,000.00 0.00
M-1 00000XXX0 SEQ 6.16000 % 46,029,000.00 0.00
M-2 ARE9801M2 SEQ 6.36000 % 17,365,000.00 0.00
B ARE98001B SEQ 7.06000 % 17,365,000.00 0.00
XX XXX0000XX XX 0.00000 % 6,253,879.91 0.00
X ARE0900IX REQ 0.00000 % 0.00 0.00
O ARW0900I0 REQ 0.00000 % 0.00 0.00
-------- ----------- ------------ -------------------------- ------------- -------- ------------- ------------- ----------------
Totals 463,075,879.91 0.00
-------- ----------- ------------ ------------ -------------- ------------- -------- ------------- ------------- ----------------
All distributions required by the Pooling and Servicing Agreement have been
calculated by the Certificate Administrator on behalf of the Trustee,
Xxxxxx X. Xxxxx, Xx.
Vice President, Norwest Bank Minnesota, N.A.
American Residential Eagle Series 1998-1
Principal Distribution Statement
---------- ------------------- ------------------ -------------- --------------- -------------- --------------
Original Beginning Scheduled Unscheduled
Face Certificate Principal Principal Realized
Class Amount Balance Distribution Distribution Accretion Loss
---------- ------------------- ------------------ -------------- --------------- -------------- --------------
A-1 143,970,000.00 143,970,000.00
A-2 232,093,000.00 232,093,000.00
M-1 46,029,000.00 46,029,000.00
M-2 17,365,000.00 17,365,000.00
B 17,365,000.00 17,365,000.00
OC 6,253,879.91 6,253,879.91
X 0.00 0.00
O 0.00 0.00
---------- ------------------- ------------------ -------------- --------------- -------------- --------------
Totals 463,075,879.91 463,075,879.91
---------- ------------------- ------------------ -------------- --------------- -------------- --------------
cont.
------------------ --------------- -------------- -----------------
Total Principal Ending Ending Total Principal
Reductions Certificate Certificate Distribution
Balance Percentage
------------------ --------------- -------------- -----------------
------------------ --------------- -------------- -----------------
------------------ --------------- -------------- -----------------
American Residential Eagle Series 1998-1
Principal Distribution Factors Statement
--------------- ------------------ ---------------- -------------- -------------- -------------- --------------
Original Beginning Scheduled Unscheduled
Face Certificate Principal Principal Realized
Class (1) Amount Balance Distribution Distribution Accretion Loss
--------------- ------------------ ---------------- -------------- -------------- -------------- --------------
A-1 143,970,000.00 1000.00000000
A-2 232,093,000.00 1000.00000000
M-1 46,029,000.00 1000.00000000
M-2 17,365,000.00 1000.00000000
B 17,365,000.00 1000.00000000
OC 6,253,879.91 1000.00000000
X 0.00 0.00000000
O 0.00 0.00000000
--------------- ------------------ ---------------- -------------- -------------- -------------- --------------
(1) All denominations are per $1,000.
cont.
-------------- -------------- ------------- --------------
Total Ending Ending Total
Principal Certificate Certificate Principal
Reductions Balance Percentage Distribution
--------------- -------------- ------------- --------------
-------------- -------------- ------------- --------------
American Residential Eagle Series 1998-1
Interest Distribution Statement
--------------- ---------------- ------------ ---------------- ------------ ------------- ------------- -------------
Beginning Payment of Non-Supported
Original Current Certificate/ Current Unpaid Current Interest
Class Face Certificate Notional Accrued Interest Interest Shortfall
Amount Rate Balance Interest Shortfall Shortfall
--------------- ---------------- ------------ ---------------- ------------ ------------- ------------- -------------
A-1 143,970,000.00 5.75000 % 143,970,000.00
A-2 232,093,000.00 5.87000 % 232,093,000.00
M-1 46,029,000.00 6.16000 % 46,029,000.00
M-2 17,365,000.00 6.36000 % 17,365,000.00
B 17,365,000.00 7.06000 % 17,365,000.00
OC 6,253,879.91 0.00000 % 6,253,879.91
X 0.00 0.00000 % 455,008,859.15
O 0.00 0.00000 % 0.00
--------------- ---------------- ------------ ---------------- ------------ ------------- ------------- ------------ -
463,075,879.91
--------------- ---------------- ------------ ---------------- ------------ ------------- ------------- ------------ -
cont.
------------- ------------ ------------- -------------
Total Remaining Ending
Realized Interest Unpaid Certificate/
Losses Distribution Interest Notional
Shortfall Balance
------------- ------------ ------------- -------------
------------ ------------ ------------- -------------
------------ ------------ ------------- -------------
American Residential Eagle Series 1998-1
Interest Distribution Factors Statement
---------- ----------------- ------------ ------------------ ------------- ------------ ------------- -------------
Beginning Payment of Non-Supported
Current Certificate/ Current Unpaid Current Interest
Original Face Certificate Notional Accrued Interest Interest Shortfall
Class (2) Amount Rate Balance Interest Shortfall Shortfall
---------- ----------------- ------------ ------------------ ------------- ------------ ------------- -------------
A-1 143,970,000.00 5.75000 % 1000.00000000
A-2 232,093,000.00 5.87000 % 1000.00000000
M-1 46,029,000.00 6.16000 % 1000.00000000
M-2 17,365,000.00 6.36000 % 1000.00000000
B 17,365,000.00 7.06000 % 1000.00000000
OC 6,253,879.91 0.00000 % 1000.00000000
X 0.00 0.00000 % 982.57950563
O 0.00 0.00000 % 0.00000000
---------- ----------------- ------------ ------------------ ------------- ------------ ------------- -------------
(2) All denominations are per $1,000.
CONT.
------------- ------------- ------------- -------------
Remaining Ending
Total Unpaid Certificate/
Realized Interest Interest Notional
Losses Distribution Shortfall Balance
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
American Residential Eagle Series 1998-1
-------------------------------------------------------------------------
COLLATERAL STATEMENT
Collateral Description
6 Month LIBOR ARM
Weighted Average Gross Coupon
Weighted Average Net Coupon
Weighted Average Pass-Through Rate
Weighted Average Maturity (Stepdown Calculation)
Beginning Scheduled Collateral Loan Count
Number of Loans Paid in Full
Ending Scheduled Collateral Loan Count
Beginning Scheduled Collateral Balance
Ending Scheduled Collateral Balance
Ending Actual Collateral Balance at 29-May-1998
Monthly P&I Constant
Ending Scheduled Balance for Premium Loans
Required Overcollateralized Amount
Overcollateralized Increase Amount
Overcollateralized Reduction Amount
Specified O/C Amount
Overcollateralized Amount
Overcollateralized Deficiency Amount
Base Overcollateralization Amount
-----------------------------------------------------------------------------
-----------------------------------------------------------------------------
Bond Scheduled/Unscheduled Principal
Bond Interest and Interest Rate
Ending Bond Balance
Excess Mortgage Amount
Bond Overcollateralization Amount
-----------------------------------------------------------------------------
AMERICAN RESIDENTIAL EAGLE SERIOUS 1998-1
CERTIFICATEHOLDER ACCOUNT STATEMENT
