OWNER TRUST AGREEMENT
among
PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV,
as Depositor,
_________________________________________,
as the Company,
_________________________________________,
as Owner Trustee
_________________________________________,
as Paying Agent
Dated as of __________ 1, 199___
_______________ HOME LOAN OWNER TRUST 199__-__
Home Loan Asset Backed Notes, Series 199__-__
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
SECTION 1.1 Capitalized Terms
SECTION 1.2 Other Definitional Provisions
ARTICLE II
ORGANIZATION
SECTION 2.1 Name
SECTION 2.2 Office
SECTION 2.3 Purposes and Powers
SECTION 2.4 Appointment of Owner Trustee
SECTION 2.5 Initial Capital Contribution of Trust Estate
SECTION 2.6 Declaration of Trust
SECTION 2.7 Title to Trust Property
SECTION 2.8 Sites of Trust
SECTION 2.9 Representations and Warranties of the Depositor and the
Company; Covenants of the Company
ARTICLE III
RESIDUAL INTEREST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1 Initial Ownership
SECTION 3.2 The Residual Interest Certificates
SECTION 3.3 Execution, Authentication and Delivery of Residual
Interest Certificates
SECTION 3.4 Registration of Transfer and Exchange of Residual
Interest Certificates
SECTION 3.5 Mutilated, Destroyed, Lost or Stolen Residual Interest
Certificates
SECTION 3.6 Persons Deemed Owners
SECTION 3.7 Access to List of Owners' Names and Addresses
SECTION 3.8 Maintenance of Office or Agency
SECTION 3.9 Appointment of Paying Agent
SECTION 3.10 Restrictions on Transfer of Residual Interest
Certificates
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 Prior Notice to Owners with Respect to Certain Matters;
Covenants
SECTION 4.2 Action by Owners with Respect to Certain Matters
SECTION 4.3 Action by Owners with Respect to Bankruptcy
SECTION 4.4 Restrictions on Owners' Power
SECTION 4.5 Majority Control
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 Establishment of Trust Account
SECTION 5.2 Application Of Trust Funds
SECTION 5.3 Method of Payment
SECTION 5.4 Segregation of Moneys; No Interest
SECTION 5.5 Accounting and Reports to the Certificateholder, Owners,
the Internal Revenue Service and Others
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1 General Authority
SECTION 6.2 General Duties
SECTION 6.3 Action upon Instruction
SECTION 6.4 No Duties Except as Specified in this Agreement, the
Basic Documents or in Instructions
SECTION 6.5 No Action Except Under Specified Documents or
Instructions
SECTION 6.6 Restrictions
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.1 Acceptance of Trusts and Duties
SECTION 7.2 Furnishing of Documents
SECTION 7.3 Representations and Warranties
SECTION 7.4 Reliance; Advice of Counsel
SECTION 7.5 Not Acting in Individual Capacity
SECTION 7.6 Owner Trustee Not Liable for Residual Interest
Certificates or Home Loans
SECTION 7.7 Owner Trustee May Own Residual Interest Certificates and
Notes
SECTION 7.8 Licenses
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE AND PAYING AGENT
SECTION 8.1 Fees and Expenses
SECTION 8.2 Indemnification
SECTION 8.3 Payments to the Owner Trustee and Paying Agent
ARTICLE IX
TERMINATION OF OWNER TRUST AGREEMENT
SECTION 9.1 Termination of Owner Trust Agreement
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 Eligibility Requirements for Owner Trustee
SECTION 10.2 Resignation or Removal of Owner Trustee
SECTION 10.3 Successor Owner Trustee
SECTION 10.4 Merger or Consolidation of Owner Trustee
SECTION 10.5 Appointment of Co-Owner Trustee or Separate Owner
Trustee
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Supplements and Amendments
SECTION 11.2 No Legal Title to Trust Estate in Owners
SECTION 11.3 Limitations on Rights of Others
SECTION 11.4 Notices
SECTION 11.5 Severability
SECTION 11.6 Separate Counterparts
SECTION 11.7 Successors and Assigns
SECTION 11.8 No Petition
SECTION 11.9 No Recourse
SECTION 11.10 Headings
SECTION 11.11 GOVERNING LAW
SECTION 11.12 Residual Interest Transfer Restrictions
SECTION 11.13 Third-Party Beneficiary
EXHIBIT A Form of Residual Interest Certificate
EXHIBIT B Form of Certificate of Trust
THIS OWNER TRUST AGREEMENT, dated as of _________, 199__ ("AGREEMENT"),
among PAINEWEBBER MORTGAGE ACCEPTANCE CORPORATION IV, a Delaware corporation, as
Depositor (the "DEPOSITOR"), _________________________, a ____________________
(the "COMPANY"), _________________________, a ____________________, as Owner
Trustee (the "OWNER TRUSTEE") and _________________________, a
____________________ (the "PAYING AGENT").
WITNESSETH:
In consideration of the mutual agreements and covenants herein contained,
the Depositor, the Company, the Paying Agent and the Owner Trustee hereby agree
for the benefit of each of them and the holders of the Residual Interest
Certificates as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 CAPITALIZED TERMS. For all purposes of this Agreement, the
following terms shall have the meanings set forth below:
"ADMINISTRATION AGREEMENT" shall mean the Administration Agreement, dated
as of ____________, 199__, among the Issuer, the Company, as the Company and the
Master Servicer, and _____________________________, as Administrator, as the
same may be amended from time to time.
"ADMINISTRATOR" shall mean ______________________, or any successor in
interest thereto, in its capacity as Administrator under the Administration
Agreement.
"AGREEMENT" shall mean this Owner Trust Agreement, as the same may be
amended and supplemented from time to time.
"BASIC DOCUMENTS" shall mean the Certificate of Owner Trust, this
Agreement, the Indenture, the Sale and Servicing Agreement, the Administration
Agreement, [the Insurance Agreement,] the Indemnification Agreement, the
Custodial Agreement, the Note Depository Agreement, the Notes, the Home Loan
Purchase Agreement, the Servicing Agreement and other documents and certificates
delivered in connection herewith or therewith.
"BENEFIT PLAN INVESTOR" shall have the meaning assigned to such term in
SECTION 3.10(B).
"BUSINESS TRUST STATUTE" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code ss. 3801 eT Seq., as the same may be amended from time to
time.
"CERTIFICATE DISTRIBUTION ACCOUNT" shall have the meaning assigned to such
term in SECTION 5.1.
"CERTIFICATE OF TRUST" shall mean the Certificate of Trust in the form of
Exhibit B to be filed for the Trust pursuant to Section 3810(a) of the Business
Trust Statute.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" shall mean the register
mentioned and the registrar appointed pursuant to SECTION 3.4.
"CERTIFICATEHOLDER" or "HOLDER" shall mean a Person in whose name a
Residual Interest Certificate is registered.
"CORPORATE TRUST OFFICE" shall mean, with respect to the Trust, the
principal corporate trust office of the Trust located at ___________ Home Loan
Owner Trust 199__-__ c/o ______________________________________________________,
Attention: Corporate Trust Administration; or at such other address in the State
of Delaware as the Owner Trustee may designate by notice to the Owners, the
Securities Insurer and the Company, or the principal corporate trust office of
any successor Owner Trustee (the address (which shall be in the State of
Delaware) of which the successor owner trustee will notify the Owners, the
Securities Insurer and the Company).
"DEFINITIVE CERTIFICATE" means a certificated form of security that
represents a Residual Interest Certificate.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended.
"EXPENSES" shall have the meaning assigned to such term in SECTION 8.2.
"INDEMNIFICATION AGREEMENT" shall mean the Indemnification Agreement, dated
as of ___________, 199__, among the Securities Insurer, the Company, the Issuer,
the Depositor, PaineWebber Incorporated, _________________________ and
_________________________.
"INDENTURE" shall mean the Indenture, dated as of __________, 199__, by and
between the Issuer and the Indenture Trustee, as the same may be amended or
supplemented from time to time.
"INDENTURE TRUSTEE" means _______________, as Indenture Trustee under the
Indenture.
"ISSUER" shall mean ____________ Home Loan Owner Trust 199__-__, the
Delaware business trust created pursuant to this Agreement.
"MAJORITY RESIDUAL INTERESTHOLDERS" shall mean the Holders of more than an
aggregate 50% Percentage Interest of the Residual Interest.
"OWNER" shall mean each holder of a Residual Interest Certificate.
"OWNER TRUSTEE" shall mean _________________________, a ________________,
not in its individual capacity but solely as owner trustee under this Agreement,
and any successor owner trustee hereunder.
"PAYING AGENT" shall mean the Indenture Trustee or any successor in
interest thereto or any other paying agent or co-paying agent appointed pursuant
to SECTION 3.9 hereunder and authorized by the Issuer to make payments to and
distributions from the Certificate Distribution Account.
"PERCENTAGE INTEREST" shall mean with respect to each Residual Interest
Certificate, the percentage portion of all of the Residual Interest evidenced
thereby as stated on the face of such Residual Interest Certificate.
"PROSPECTIVE OWNER" shall have the meaning set forth in SECTION 3.10(A).
"RATING AGENCY CONDITION" means, with respect to any action to which a
Rating Agency Condition applies, that each Rating Agency shall have been given
___ days (or such shorter period as is acceptable to each Rating Agency) prior
notice thereof and that each of the Depositor, the Servicer, the Master
Servicer, [the Securities Insurer,] the Owner Trustee and the Issuer shall have
been notified by the Rating Agencies in writing that such action will not result
in a reduction, withdrawal or qualification of the then current internal ratings
assigned to the Notes by each of the Rating Agencies without respect to the
Securities Insurer.
"RECORD DATE" shall mean as to each Payment Date the last Business Day of
the month immediately preceding the month in which such Payment Date occurs.
"RESIDUAL INTEREST" shall mean the right to receive distributions of Excess
Spread, if any, and certain other funds, if any, on each Payment Date, pursuant
to Section 5.2 of this Agreement, Sections 5.01(e) and 5.02(b) of the Sale and
Servicing Agreement and Section 5.04(b) of the Indenture.
"RESIDUAL INTEREST CERTIFICATE" shall mean a certificate substantially in
the form attached as EXHIBIT A hereto and evidencing the Residual Interest.
"RESIDUAL INTERESTHOLDER" shall mean any Holder of a Percentage Interest of
the Residual Interest.
"SALE AND SERVICING AGREEMENT" shall mean the Sale and Master Servicing
Agreement dated as of the date hereof, among the Owner Trust as Issuer,
PaineWebber Mortgage Acceptance Corporation IV, as Depositor, _________________,
as Indenture Trustee and the Company, as Transferor and Master Servicer, as the
same may be amended or supplemented from time to time.
"SECRETARY OF STATE" shall mean the Secretary of State of the State of
Delaware.
["SECURITIES INSURER" shall mean _________________________]
"SERVICER" shall mean _______________________, a ____________ corporation,
or any successor in interest thereto.
"SERVICING AGREEMENT" shall mean the Servicing Agreement incorporating by
reference the Agreement Regarding Standard Servicing Terms, each dated as of the
date hereof, between the Company and the Servicer, as the same may be amended or
supplemented from time to time.
"TRUST" shall mean the trust established by this Agreement.
"U.S. PERSON" shall mean a citizen or resident of the United States, a
corporation or partnership (except as provided in applicable Treasury
regulations) created or organized in or under the laws of the United States, any
state or the District of Columbia, including any entity treated as a corporation
or partnership for federal income tax purposes an estate that is subject to U.S.
federal income tax regardless of the source of its income, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of the trust and one or more such U.S. Persons have authority to
control all substantial decisions of the trust (or, to the extent provided in
Treasury regulations, certain trusts in existence on August 20, 1996 which are
eligible to be treated as U.S. Persons).
SECTION 1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Capitalized terms used herein and not otherwise defined herein have the
meanings assigned to them in the Sale and Servicing Agreement or, if not defined
therein, in the Indenture.
(b) All terms defined in this Agreement shall have the defined meanings
when used in any certificate or other document made or delivered pursuant hereto
unless otherwise defined therein.
(c) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles. To the extent that the definitions of
accounting terms in this Agreement or in any such certificate or other document
are inconsistent with the meanings of such terms under generally accepted
accounting principles, the definitions contained in this Agreement or in any
such certificate or other document shall control.
(d) The words "hereof", "herein", "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement; Section and Exhibit references
contained in this Agreement are references to Sections and Exhibits in or to
this Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation".
(e) The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(f) Any agreement, instrument or statute defined or referred to herein or
in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
ORGANIZATION
SECTION 2.1 NAME. The Trust created hereby shall be known as
"____________ Home Loan Owner Trust 199__-__", in which name the Owner Trustee
may conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
SECTION 2.2 OFFICE. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Owners, [the
Securities Insurer] and the Company.
SECTION 2.3 PURPOSES AND POWERS. (a) The purpose of the Trust is to
engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and to sell such
Notes;
(ii) with the proceeds of the sale of the Notes, to pay the
organizational, start-up and transactional expenses of the Trust and to pay
the balance to the Depositor and the Company, as their interests may appear
pursuant to the Sale and Servicing Agreement;
(iii) to purchase, hold, assign, grant, transfer, pledge, mortgage and
convey the Trust Estate pursuant to the Indenture and to hold, manage and
distribute to the Owners pursuant to the terms of the Sale and Servicing
Agreement any portion of the Trust Estate released from the lien of, and
remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
(v) to engage in those activities, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or
are incidental thereto or connected therewith;
(vi) subject to compliance with the Basic Documents, to engage in such
other activities as may be required in connection with conservation of the
Trust Estate and the making of distributions to the Owners and the
Noteholders; and
(vii) to issue the Residual Interest Certificates pursuant to this
Agreement.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4 APPOINTMENT OF OWNER TRUSTEE. The Depositor hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
SECTION 2.5 INITIAL CAPITAL CONTRIBUTION OF TRUST ESTATE. The Depositor
hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as
of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt
in trust from the Depositor, as of the date hereof, of the foregoing
contribution, which shall constitute the initial Trust Estate and shall be
deposited in the Certificate Distribution Account. The Depositor or the Company
shall pay reasonable organizational expenses of the Trust as they may arise or
shall, upon the request of the Owner Trustee, promptly reimburse the Owner
Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.6 DECLARATION OF TRUST. The Owner Trustee hereby declares that
it will hold the Trust Estate in trust upon and subject to the conditions set
forth herein for the use and benefit of the Owners, subject to the obligations
of the Trust under the Basic Documents. It is the intention of the parties
hereto that the Trust constitute a business trust under the Business Trust
Statute and that this Agreement constitute the governing instrument of such
business trust. It is the intention of the parties hereto that, solely for
federal, state and local income and franchise tax purposes (i) so long as there
is a sole Owner, the Trust shall be treated as a security arrangement, with the
assets of the Trust being the Home Loans and the other assets held by the Trust,
the owner of the Home Loans being the sole Owner and the Notes being
non-recourse debt of the sole Owner, and (ii) if there is more than one Owner,
the Trust shall be treated as a partnership, with the assets of the partnership
being the Home Loans and other assets held by the Trust, the partners of the
partnership being the holders of the Home Loans and the Notes being non-recourse
debt of the partnership. The Trust shall not elect to be treated as an
association under Treasury Regulations Section 301.7701-3(a) for federal income
tax purposes. The parties agree that, unless otherwise required by appropriate
tax authorities, the sole Owner or the Trust will file or cause to be filed
annual or other necessary returns, reports and other forms consistent with the
characterization of the Trust as provided in the second preceding sentence for
such tax purposes. Effective as of the date hereof, the Owner Trustee shall have
all rights, powers and duties set forth herein and in the Business Trust Statute
with respect to accomplishing the purposes of the Trust.
SECTION 2.7 TITLE TO TRUST PROPERTY.
(a) Subject to the Indenture, legal title to all the Trust Estate shall be
vested at all times in the Trust as a separate legal entity except where
applicable law in any jurisdiction requires title to any part of the Trust
Estate to be vested in a trustee or trustees, in which case title shall be
deemed to be vested in the Owner Trustee and/or a separate trustee, as the case
may be.
(b) The Owners shall not have legal title to any part of the Trust Estate.
No transfer by operation of law or otherwise of any interest of the Owners shall
operate to terminate this Agreement or the trusts hereunder or entitle any
transferee to an accounting or to the transfer to it of any part of the Trust
Estate.
SECTION 2.8 SITUS OF TRUST. The Trust will be located and administered
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware [or the State of
New York,] except with respect to accounts maintained by the Indenture Trustee
on behalf of the Owner Trustee. The Trust shall not have any employees;
provided, however, that nothing herein shall restrict or prohibit the Owner
Trustee from having employees within or without the State of Delaware. Payments
will be received by the Trust only in Delaware [or New York,] and payments will
be made by the Trust only from Delaware [or New York,] except with respect to
payments made by the Indenture Trustee on behalf of the Owner Trustee. The only
offices of the Trust will be at the Corporate Trust Office in Delaware.
SECTION 2.9 REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR AND THE
COMPANY; COVENANTS OF THE COMPANY.
(a) The Depositor hereby represents and warrants to the Owner Trustee [and
the Securities Insurer] that:
(i) The Depositor is a corporation duly organized, validly existing,
and in good standing under the laws of the State of Delaware and has all
licenses necessary to carry on its business as now being conducted. The
Depositor has the power and authority to execute and deliver this Agreement
and to perform in accordance herewith; the execution, delivery and
performance of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by the Depositor and the consummation
of the transactions contemplated hereby have been duly and validly
authorized by all necessary action of the Depositor; this Agreement
evidences the valid, binding and enforceable obligation of the Depositor;
and all requisite action has been taken by the Depositor to make this
Agreement valid, binding and enforceable upon the Depositor in accordance
with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, moratorium and other, similar laws relating to or affecting
creditors' rights generally or the application of equitable principles in
any proceeding, whether at law or in equity;
(ii) The consummation of the transactions contemplated by this
Agreement will not result in (i) the breach of any terms or provisions of
the Certificate of Incorporation or Bylaws of the Depositor, (ii) the
breach of any term or provision of, or conflict with or constitute a
default under or result in the acceleration of any obligation under, any
material agreement, indenture or loan or credit agreement or other material
instrument to which the Depositor, or its property is subject, or (iii) the
violation of any law, rule, regulation, order, judgment or decree to which
the Depositor or its respective property is subject;
(iii) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal,
state, municipal or other governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or otherwise) or operations of the Depositor or its properties
or might have consequences that would materially and adversely affect its
performance hereunder.
(b) The Company hereby represents and warrants to the Owner Trustee and the
Securities Insurer that:
(i) The Company is duly organized and validly existing as a California
industrial loan company in good standing under the laws of the State of
California, with power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
presently conducted.
(ii) The Company is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of property
or the conduct of its business shall require such qualifications.
(iii) The Company has the power and authority to execute and deliver
this Agreement and to carry out its terms; and the execution, delivery and
performance of this Agreement has been duly authorized by the Company by
all necessary corporate action.
(iv) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the certificate
of incorporation or by-laws of the Company, or any indenture, agreement or
other instrument to which the Company is a party or by which it is bound;
nor result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any
law or, to the best of the Company's knowledge, any order, rule or
regulation applicable to the Company of any court or of any Federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Company or its properties.
(v) There are no proceedings or investigations pending or, to the
Company's best knowledge, threatened, before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Company or its properties: (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, this Agreement.
(vi) The Company is not (A) an "employee benefit plan" within the
meaning of Section 3(3) of ERISA, or (B) a "plan" within the meaning of
Section 4975(e)(1) of the Code or (C) an entity, including an insurance
company separate account or general account, whose underlying assets
include plan assets by reason of a plan's investment in the entity (each, a
"BENEFIT PLAN INVESTOR") and is not directly or indirectly purchasing such
Residual Interest Certificate on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with the assets of a Benefit Plan
Investor.
(vii) The Company is a U.S. Person.
(c) The Company covenants with the Owner Trustee that during the
continuance of this Agreement it will comply in all respects with the provisions
of its Certificate of Incorporation in effect from time to time.
ARTICLE III
RESIDUAL INTEREST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1 INITIAL OWNERSHIP. Upon the formation of the Trust by the
contribution by the Depositor pursuant to SECTION 2.5 and until the issuance of
the Residual Interest Certificates, the Depositor shall be the sole Owner of the
Trust.
SECTION 3.2 THE RESIDUAL INTEREST CERTIFICATES. The Residual Interest
Certificates shall not be issued with a principal amount. The Residual Interest
Certificates shall be executed on behalf of the Trust by manual or facsimile
signature of a Trust Officer of the Owner Trustee. Residual Interest
Certificates bearing the manual or facsimile signatures of individuals who were,
at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Trust, shall be valid and binding obligations of the Trust,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such Residual Interest
Certificates or did not hold such offices at the date of authentication and
delivery of such Residual Interest Certificates.
A transferee of a Residual Interest Certificate shall become an Owner, and
shall be entitled to the rights and subject to the obligations of an Owner
hereunder and under the Sale and Servicing Agreement, upon such transferee's
acceptance of a Residual Interest Certificate duly registered in such
transferee's name pursuant to SECTION 3.4.
SECTION 3.3 EXECUTION, AUTHENTICATION AND DELIVERY OF RESIDUAL INTEREST
CERTIFICATES. Concurrently with the initial sale of the Home Loans to the Trust
pursuant to the Sale and Servicing Agreement, the Owner Trustee on behalf of the
Trust shall cause the Residual Interest Certificates representing 100% of the
Percentage Interests of the Residual Interest to be executed, authenticated and
delivered to or upon the written order of the Depositor, signed by its chairman
of the board, its president or any vice president, without further corporate
action by the Depositor, in authorized denominations. No Residual Interest
Certificate shall entitle its holder to any benefit under this Agreement, or
shall be valid for any purpose, unless there shall appear on such Residual
Interest Certificate a certificate of authentication substantially in the form
set forth in EXHIBIT A, executed by the Owner Trustee or the Administrator, as
the Owner Trustee's authenticating agent, by manual or facsimile signature; such
authentication shall constitute conclusive evidence that such Residual Interest
Certificate shall have been duly authenticated and delivered hereunder. All
Residual Interest Certificates shall be dated the date of their authentication.
No Certificates, except the Residual Interest Certificates, shall be issued by
the Trust without the prior written consent of the Securities Insurer.
SECTION 3.4 REGISTRATION OF TRANSFER AND EXCHANGE OF RESIDUAL INTEREST
CERTIFICATES. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to SECTION 3.8 a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Residual Interest Certificates and
of transfers and exchanges of Residual Interest Certificates as herein provided.
The Administrator shall be the initial Certificate Registrar.
Upon surrender for registration of transfer of any Residual Interest
Certificate at the office or agency maintained pursuant to SECTION 3.8, the
Owner Trustee shall execute, authenticate and deliver (or shall cause the
Administrator as its authenticating agent to authenticate and deliver), in the
name of the designated transferee or transferees, one or more new Residual
Interest Certificates in authorized denominations of a like aggregate amount
dated the date of authentication by the Owner Trustee or any authenticating
agent, PROVIDED that prior to such execution, authentication and delivery, the
Owner Trustee, the Administrator, the Securities Insurer and the Certificate
Registrar shall have received an Opinion of Counsel to the effect that the
proposed transfer will not cause the Trust to be characterized as an association
(or a publicly traded partnership) taxable as a corporation or alter the tax
characterization of the Notes for federal income tax or California state law
purposes. At the option of an Owner, Residual Interest Certificates may be
exchanged for other Residual Interest Certificates of authorized denominations
of a like aggregate amount upon surrender of the Residual Interest Certificates
to be exchanged at the office or agency maintained pursuant to SECTION 3.8.
Every Residual Interest Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to the Owner Trustee and the
Certificate Registrar duly executed by the Owner or his attorney duly authorized
in writing. In addition, each Residual Interest Certificate presented or
surrendered for registration of transfer and exchange must be accompanied by a
letter from the Prospective Owner certifying as to the representations set forth
in SECTIONS 3.10(A) AND (B). Each Residual Interest Certificate surrendered for
registration of transfer or exchange shall be in substantially the form attached
hereto as Exhibit A and shall be canceled and disposed of by the Owner Trustee
or the Certificate Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Residual Interest Certificates, but the Owner Trustee or the
Certificate Registrar may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer or
exchange of Residual Interest Certificates.
The preceding provisions of this Section notwithstanding, the Owner Trustee
shall not make and the Certificate Registrar shall not register transfers or
exchanges of Residual Interest Certificates for a period of 15 days preceding
the due date for any payment with respect to the Residual Interest Certificates.
SECTION 3.5 MUTILATED, DESTROYED, LOST OR STOLEN RESIDUAL INTEREST
CERTIFICATES. If (a) any mutilated Residual Interest Certificate shall be
surrendered to the Certificate Registrar, or if the Certificate Registrar shall
receive evidence to its satisfaction of the destruction, loss or theft of any
Residual Interest Certificate and (b) there shall be delivered to the
Certificate Registrar and the Owner Trustee such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Residual Interest Certificate shall have been acquired by a bona fide
purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner
Trustee, or the Administrator as the Owner Trustee's authenticating agent, shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Residual Interest Certificate, a new Residual Interest
Certificate of like tenor and denomination. In connection with the issuance of
any new Residual Interest Certificate under this Section, the Owner Trustee or
the Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Residual Interest Certificate issued pursuant to this
Section shall constitute conclusive evidence of ownership in the Trust, as if
originally issued, whether or not the lost, stolen or destroyed Residual
Interest Certificate shall be found at any time.
SECTION 3.6 PERSONS DEEMED OWNERS. Prior to due presentation of a
Residual Interest Certificate for registration of transfer, the Owner Trustee or
the Certificate Registrar may treat the Person in whose name any Residual
Interest Certificate shall be registered in the Certificate Register as the
owner of such Residual Interest Certificate for the purpose of receiving
distributions pursuant to SECTION 5.2 and for all other purposes whatsoever, and
neither the Owner Trustee nor the Certificate Registrar shall be bound by any
notice to the contrary.
SECTION 3.7 ACCESS TO LIST OF OWNERS' NAMES AND ADDRESSES. The Owner
Trustee shall furnish or cause to be furnished to the Master Servicer, the
Servicer, the Depositor, [the Securities Insurer] and the Indenture Trustee,
within ___ days after receipt by the Owner Trustee of a request therefor from
the Master Servicer, the Servicer, the Depositor, [the Securities Insurer] or
the Indenture Trustee in writing, a list, in such form as the Master Servicer,
the Servicer, the Depositor, [the Securities Insurer] or the Indenture Trustee
may reasonably require, of the names and addresses of the Owners as of the most
recent Record Date. If a Certificateholder applies in writing to the Owner
Trustee, and such application states that the applicant desire to communicate
with other Certificateholders with respect to their rights under this Agreement
or under the Residual Interest Certificates and such application is accompanied
by a copy of the communication that such applicants propose to transmit, then
the Owner Trustee shall, within __________ Business Days after the receipt of
such application, afford such applicants access during normal business hours to
the current list of Certificateholders. Each Owner, by receiving and holding a
Residual Interest Certificate, shall be deemed to have agreed not to hold any of
the Depositor, the Company, the Certificate Registrar, [the Securities Insurer]
or the Owner Trustee accountable by reason of the disclosure of its name and
address, regardless of the source from which such information was derived.
SECTION 3.8 MAINTENANCE OF OFFICE OR AGENCY. The Owner Trustee shall
maintain an office or offices or agency or agencies where Residual Interest
Certificates may be surrendered for registration of transfer or exchange and
where notices and demands to or upon the Owner Trustee in respect of the
Residual Interest Certificates and the Basic Documents may be served. The Owner
Trustee initially designates the Administrator's office in the city of
_____________________ as its principal corporate trust office for such purposes.
The Owner Trustee shall give prompt written notice to the Company, [the
Securities Insurer] and to the Certificateholders of any change in the location
of the Certificate Register or any such office or agency.
SECTION 3.9 APPOINTMENT OF PAYING AGENT. The Owner Trustee hereby
appoints the Indenture Trustee as Paying Agent under this Agreement. The Owner
Trustee hereby appoints the Paying Agent to establish and maintain the
Certificate Distribution Account. The Paying Agent shall make distributions to
Residual Interestholders from the Certificate Distribution Account pursuant to
SECTION 5.2 hereof and SECTION 5.02 of the Sale and Servicing Agreement and
shall report the amounts of such distributions to the Owner Trustee. The Paying
Agent shall have the revocable power to withdraw funds from the Certificate
Distribution Account for the purpose of making the distributions referred to
above. In the event that the Indenture Trustee shall no longer be the Paying
Agent hereunder, the Owner Trustee shall appoint a successor to act as Paying
Agent (which shall be a bank or trust company) acceptable to the Securities
Insurer. The Owner Trustee shall cause such successor Paying Agent or any
additional Paying Agent appointed by the Owner Trustee to execute and deliver to
the Owner Trustee an instrument in which such successor Paying Agent or
additional Paying Agent shall agree with the Owner Trustee that as Paying Agent,
such successor Paying Agent or additional Paying Agent will hold all sums, if
any, held by it for payment to the Owners in trust for the benefit of the
Residual Interestholders entitled thereto until such sums shall be paid to such
Owners. The Paying Agent shall return all unclaimed funds to the Owner Trustee,
and upon removal of a Paying Agent, such Paying Agent shall also return all
funds in its possession to the Owner Trustee. The provisions of SECTIONS 7.1,
7.3, 7.4 AND 8.1 shall apply to the Indenture Trustee also in its role as Paying
Agent, for so long as the Indenture Trustee shall act as Paying Agent and, to
the extent applicable, to any other paying agent appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise. Notwithstanding anything herein to
the contrary, the Paying Agent shall be the same entity as the Indenture Trustee
under the Indenture and the Sale and Servicing Agreement, [unless the Securities
Insurer consents to a different Paying Agent or a Securities Insurer Default has
occurred and is continuing.] [Notwithstanding any other provision, if a
Securities Insurer Default occurs, then the Securities Insurer's consent or
direction is not required.] If the Paying Agent ceases to be the same entity as
the Indenture Trustee under the Indenture and the Sale and Servicing Agreement,
then, unless the Securities Insurer otherwise consents, the Paying Agent shall
resign and the Owner Trustee shall assume the duties and obligations of the
Paying Agent hereunder and under the Sale and Servicing Agreement.
SECTION 3.10 RESTRICTIONS ON TRANSFER OF RESIDUAL INTEREST Certificates.
(a) Each prospective purchaser and any subsequent transferee of a Residual
Interest Certificate (each, a "PROSPECTIVE OWNER"), other than the Company,
shall represent and warrant, in writing, to the Owner Trustee, [the Securities
Insurer] and the Certificate Registrar and any of their respective successors
that:
(i) Such Person is (A) a "qualified institutional buyer" as defined in
Rule 144A under the Securities Act of 1933, as amended (the "SECURITIES
ACT"), and is aware that the seller of the Residual Interest Certificate
may be relying on the exemption from the registration requirements of the
Securities Act provided by Rule 144A and is acquiring such Residual
Interest Certificate for its own account or for the account of one or more
qualified institutional buyers for whom it is authorized to act, or (B) an
institutional "accredited investor" within the meaning of subparagraph
(a)(1), (2), (3) or (7) of Rule 501 under the Securities Act (an
"INSTITUTIONAL ACCREDITED INVESTOR") that is acquiring the Residual
Interest 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 Securities Act.
(ii) Such Person understands that the Residual Interest Certificate
have not been and will not be registered under the Securities Act and may
be offered, sold or otherwise transferred only to a person whom the seller
reasonably believes is (A) a qualified institutional buyer or (B) an
Institutional Accredited Investor, and in accordance with the terms hereof
and any applicable securities laws of any state of the United States.
(iii) Such Person understands that the Residual Interest Certificates
bear a legend to the following effect:
"THE RESIDUAL INTEREST IN THE TRUST REPRESENTED BY THIS
RESIDUAL INTEREST CERTIFICATE HAS NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THIS
RESIDUAL INTEREST CERTIFICATE MAY BE DIRECTLY OR
INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF BY
THE HOLDER HEREOF ONLY TO (I) A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A UNDER THE
ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT
FROM THE REGISTRATION REQUIREMENTS OF THE ACT PURSUANT
TO RULE 144A OR (II) AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE ACT (INCLUDING,
BUT NOT LIMITED TO, ____________________) IN A
TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS.
NO PERSON IS OBLIGATED TO REGISTER THIS RESIDUAL
INTEREST CERTIFICATE UNDER THE ACT OR ANY STATE
SECURITIES LAWS."
(iv) Such Person shall comply with the provisions of SECTION 3.10(B),
as applicable, relating to the ERISA restrictions with respect to the
acceptance or acquisition of such Residual Interest Certificate.
(b) Each Prospective Owner shall either:
(i) represent and warrant, in writing, to the Owner Trustee, [the
Securities Insurer] and the Certificate Registrar and any of their
respective successors that the Prospective Owner is not (A) an "employee
benefit plan" within the meaning of Section 3(3) of ERISA, or (B) a "plan"
within the meaning of Section 4975(e)(1) of the Code or (C) an entity,
including an insurance company separate account or general account, whose
underlying assets include plan assets by reason of a plan's investment in
the entity (each, a "BENEFIT PLAN INVESTOR") and is not directly or
indirectly purchasing such Residual Interest Certificate on behalf of, as
investment manager of, as named fiduciary of, as trustee of, or with the
assets of a Benefit Plan Investor; or
(ii) furnish to the Owner Trustee, [the Securities Insurer] and the
Certificate Registrar and any of their respective successors an opinion of
counsel acceptable to such persons that (A) the proposed transfer of the
Residual Interest Certificate to such Prospective Owner will not cause any
assets of the Trust to be deemed "plan assets" within the meaning of United
States Department of Labor Regulation Section 2510.3-101, or (B) the
proposed transfer of the Residual Interest Certificate will not give rise
to a transaction described in Section 406 of ERISA or Section 4975(c)(1) of
the Code for which a statutory or administrative exemption is unavailable.
(c) The Residual Interest Certificates shall bear an additional legend
referring to the foregoing restrictions contained in paragraph (b) above.
(d) Each Prospective Owner, other than the Company, shall represent and
warrant, in writing, to the Owner Trustee, [the Securities Insurer] and the
Certificate Registrar and any of their respective successors that it is a person
who is either (A)(i) a citizen or resident of the United States, (ii) a
corporation or partnership organized in or under the laws of the United States,
any state or the District of Columbia, including any entity treated as a
corporation or partnership for federal income tax purposes or (iii) a person not
described in (A)(i) or (ii) whose ownership of the Residual Interest Certificate
is effectively connected with such person's conduct of a trade or business
within the United States (within the meaning of the Code) and its ownership of
any interest in a Residual Interest Certificate will not result in any
withholding obligation with respect to any payments with respect to the Residual
Interest Certificates by any person (other than withholding, if any, under
Section 1446 of the Code) or (B) an estate the income of which is subject to
United States federal income tax, regardless of source, or a trust if a court
within the United States is able to exercise primary supervision over the
administration of such trust and one or more persons described in this paragraph
have the authority to control all substantial decisions of such trust (a person
described in (A)(i), (A)(ii), or B, a "U.S. PERSON"). It agrees that it will
provide a certification of non-foreign status signed under penalties of perjury
and, alternatively, that if it is a person described in clause (A)(iii) above,
it will furnish to the Administrator a properly executed IRS Form 4224 (or
successor form thereto) and a new IRS Form 4224 (or successor form thereto) upon
the expiration or obsolescence of any previously delivered form (and such other
certifications, representations or opinions of counsel as may be requested by
the Company).
(e) Each Certificateholder that is not a U.S. Person agrees that,
subsequent to delivery to the Owner Trustee, [the Securities Insurer] and the
Certificate Registrar of IRS Form 4224 or appropriate successor forms required
to evidence that the Certificateholder holds its Residual Interest
Certificate(s) in connection with a U.S. trade or business (within the meaning
of the Code), it will deliver to the Company and the Owner Trustee further
copies of the said IRS Form 4224 or such appropriate successor forms or other
manner of certification, as the case may be, on or before the date that any such
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form previously delivered by it to the Company and
the Owner Trustee, and such extensions or renewals thereof as may reasonably be
requested by the Company and the Owner Trustee. Further, each Certificateholder
that is not a U.S. Person covenants as a condition to acquiring its Residual
Interest Certificate that for so long as it shall hold such Residual Interest
Certificate it shall be held in such manner that the income therefrom shall be
effectively connected with the conduct of a U.S. trade or business. In the event
that any Certificateholder shall breach the certifications, representations,
warranties or covenants set forth in this Article III, such Certificateholder
shall indemnify the Company, the Owner Trustee and the Trust for any amounts
(including interest and penalties thereon) payable by the Company, the Owner
Trustee or the Trust as a result of such breach.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1 PRIOR NOTICE TO OWNERS WITH RESPECT TO CERTAIN MATTERS;
COVENANTS. (a) With respect to the following matters, the Owner Trustee shall
not take action, and the Owners shall not direct the Owner Trustee to take any
action, unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Owners [and the Securities Insurer] in writing
of the proposed action and [(i) the Securities Insurer shall have consented
thereto and] (ii) the Owners shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such Owners have
withheld consent or the Owners have provided alternative direction (any
direction by the Owners shall require the prior consent of the Securities
Insurer):
(i) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of the Home Loans)
and the compromise of any action, claim or lawsuit brought by or against
the Trust (except with respect to the aforementioned claims or lawsuits for
collection of the Home Loans);
(ii) the election by the Trust to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business
Trust Statute);
(iii) the amendment or other change to this Agreement or any Basic
Document in circumstances where the consent of any Noteholder or the
Securities Insurer is required;
(iv) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or pursuant to this Agreement
of a successor Certificate Registrar, or the consent to the assignment by
the Note Registrar, Paying Agent or Indenture Trustee or Certificate
Registrar of its obligations under the Indenture or this Agreement, as
applicable;
(v) the consent to the calling or waiver of any default of any Basic
Document;
(vi) the consent to the assignment by the Indenture Trustee, the
Master Servicer or Servicer of their respective obligations under any Basic
Document;
(vii) except as provided in Article IX hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(viii) merge or consolidate the Trust with or into any other entity,
or convey or transfer all or substantially all of the Trust's assets to any
other entity;
(ix) cause the Trust to incur, assume or guaranty any indebtedness
other than as set forth in this Agreement;
(x) do any act that conflicts with any other Basic Document;
(xi) do any act which would make it impossible to carry on the
ordinary business of the Trust;
(xii) confess a judgment against the Trust;
(xiii) possess Trust assets, or assign the Trust's right to property,
for other than a Trust purpose;
(xiv) cause the Trust to lend any funds to any entity; or
(xv) change the Trust's purpose and powers from those set forth in
this Owner Trust Agreement.
(b) Notwithstanding any provision of Section 4.1(a), the Owner Trustee on
behalf of the Trust agrees to abide by the following restrictions:
(i) Other than as contemplated by the Basic Documents and related
documentation, the Trust shall not incur any indebtedness.
(ii) Other than as contemplated by the Basic Documents and related
documentation, the Trust shall not engage in any dissolution, liquidation,
consolidation, merger or sale of assets.
(iii) The Trust shall not engage in any business activity in which it
is not currently engaged other as contemplated by the Basic Documents and
related documentation.
(iv) The Trust shall not form, or cause to be formed, any subsidiaries
and shall not own or acquire any asset other than as contemplated by the
Basic Documents and related documentation.
(v) Other than as contemplated by the Basic Documents and related
documentation, the Trust shall not follow the directions or instructions of
the Company.
(c) The Owner Trustee on behalf of the Trust shall:
(i) Maintain the Trust's books and records separate from any other
person or entity.
(ii) Maintain the Trust's bank accounts separate from any other person
or entity.
(iii) Not commingle the Trust's assets with those of any other person
or entity.
(iv) Conduct the Trust's own business in its own name.
(v) Other than as contemplated by the Basic Documents and related
documentation, pay the Trust's own liabilities and expenses only out of its
own funds.
(vi) Observe all formalities required under the Business Trust
Statute.
(vii) Enter into transactions with Affiliates or the Company only if
each such transaction is intrinsically fair, commercially reasonable, and
on the same terms as would be available in an arm's length transaction with
a person or entity that is not an Affiliate.
(viii) Not guarantee or become obligated for the debts of any other
entity or person.
(ix) Not hold out the Trust's credit as being available to satisfy the
obligation of any other person or entity.
(x) Not acquire the obligations or securities of the Trust's
Affiliates or the Company.
(xi) Other than as contemplated by the Basic Documents and related
documentation, not make loans to any other person or entity or buy or hold
evidence of indebtedness issued by any other person or entity.
(xii) Other than as contemplated by the Basic Documents and related
documentation, not pledge the Trust's assets for the benefit of any other
person or entity.
(xiii) Hold the Trust out as a separate entity and conduct any
business only in its own name.
(xiv) Correct any known misunderstanding regarding the Trust's
separate identity.
(xv) Not identify the Trust as a division of any other person or
entity.
(xvi) Maintain appropriate minutes or other records of appropriate
actions and shall maintain its office separate from the office of the
Company, the Depositor and the Master Servicer.
So long as the Notes or any other amounts owed under the Indenture remain
outstanding, the Trust shall not amend this Section 4.1 without the prior
written consent of 100% of the Voting Interests of the Notes and the consent of
each Rating Agency, in addition to the requirements under Section 11.1.
(d) The Owner Trustee shall not have the power, except upon the direction
of the Owners [with the consent of the Securities Insurer or upon the direction
of the Securities Insurer,] and, subject to Section 11.18 of the Indenture, 100%
of the Noteholders, and to the extent otherwise consistent with the Basic
Documents, to (i) remove or replace the Servicer, the Master Servicer or the
Indenture Trustee, (ii) institute proceedings to have the Trust declared or
adjudicated a bankrupt or insolvent, (iii) consent to the institution of
bankruptcy or insolvency proceedings against the Trust, (iv) file a petition or
consent to a petition seeking reorganization or relief on behalf of the Trust
under any applicable federal or state law relating to bankruptcy, (v) consent to
the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or
any similar official) of the Trust or a substantial portion of the property of
the Trust, (vi) make any assignment for the benefit of the Trust's creditors,
(vii) cause the Trust to admit in writing its inability to pay its debts
generally as they become due or (viii) take any action, or cause the Trust to
take any action, in furtherance of any of the foregoing (any of the above, a
"BANKRUPTCY ACTION"). So long as the Indenture and the Insurance Agreement
remain in effect [and no Securities Insurer Default exists,] no
Certificateholder shall have the power to take, and shall not take, any
Bankruptcy Action with respect to the Trust or direct the Owner Trustee to take
any Bankruptcy Action with respect to the Trust.
SECTION 4.2 ACTION BY OWNERS WITH RESPECT TO CERTAIN MATTERS. The Owner
Trustee shall not have the power, except upon the direction of the Owners [and
with the consent of the Securities Insurer or upon the direction of the
Securities Insurer,] to (a) remove the Administrator under the Administration
Agreement pursuant to Section 9 thereof, (b) appoint a successor Administrator
pursuant to Section 9 of the Administration Agreement, (c) remove the Master
Servicer under the Sale and Servicing Agreement pursuant to Section 10.01
thereof or (d) sell the Home Loans after the termination of the Indenture. The
Owner Trustee shall take the actions referred to in the preceding sentence only
upon written instructions signed by the Owners [and, so long as no Securities
Insurer Default exists, only after obtaining the consent of the Securities
Insurer.]
SECTION 4.3 ACTION BY OWNERS WITH RESPECT TO BANKRUPTCY. The Owner
Trustee shall not have the power to commence a voluntary Bankruptcy Action
relating to the Trust unless the conditions specified in Section 4.1(d) are
satisfied and the Trust is insolvent.
SECTION 4.4 RESTRICTIONS ON OWNERS' POWER. The Owners shall not direct
the Owner Trustee to take or refrain from taking any action if such action or
inaction would be contrary to any obligation of the Trust or the Owner Trustee
under this Agreement or any of the Basic Documents or would be contrary to
SECTION 2.3 nor shall the Owner Trustee be obligated to follow any such
direction, if given.
SECTION 4.5 MAJORITY CONTROL. Except as expressly provided herein, any
action that may be taken by the Owners under this Agreement may be taken by the
Majority Residual Interestholders. Except as expressly provided herein, any
written notice of the Owners delivered pursuant to this Agreement shall be
effective if signed by the Majority Residual Interestholders at the time of the
delivery of such notice.
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1 ESTABLISHMENT OF TRUST ACCOUNT. The Owner Trustee shall
cause the Master Servicer, for the benefit of the Owners, the Noteholders [and
the Securities Insurer,] to establish and maintain with the Indenture Trustee
for the benefit of the Owner Trustee one or more Eligible Accounts which, so
long as the Indenture Trustee holds such Trust Account on behalf of the Owner
Trustee, shall be entitled "Certificate Distribution Account,
_________________________, as Indenture Trustee on behalf of the Owner Trustee,
the Owners, the Noteholders [and the Securities Insurer,] in trust for the
____________ Home Loan Owner Trust 199__-__". Funds shall be deposited in the
Certificate Distribution Account as required by the Sale and Servicing
Agreement.
All of the right, title and interest of the Owner Trustee and the Paying
Agent in all funds on deposit from time to time in the Certificate Distribution
Account and in all proceeds thereof shall be held for the benefit of the Owners
and such other persons entitled to distributions therefrom. Except as otherwise
expressly provided herein or in the Sale and Servicing Agreement, the
Certificate Distribution Account shall be under the sole dominion and control of
the Owner Trustee or Paying Agent for the benefit of the Owners, the Securities
Insurer and the Noteholders.
In addition to the foregoing, the Certificate Distribution Account is a
Trust Account under the Sale and Servicing Agreement and constitutes part of the
Trust Estate pledged by the Trust to the Indenture Trustee under the Indenture.
The Certificate Distribution Account shall be subject to and established and
maintained in accordance with the applicable provisions of the Sale and
Servicing Agreement and the Indenture, including, without limitation, the
provisions of Section 5.02(b) of the Sale and Servicing Agreement regarding
distributions from the Certificate Distribution Account.
The Company agrees to direct and shall have the sole authority to direct
the Owner Trustee or Indenture Trustee or their successor in interest, as to the
Permitted Investments in which the funds on deposit in the Trust Accounts (as
such term is defined in the Sale and Servicing Agreement) may be invested.
SECTION 5.2 APPLICATION OF TRUST FUNDS.
(a) On each Payment Date, the Owner Trustee or Indenture Trustee, on behalf
of the Owner Trustee, shall direct the Paying Agent to distribute to the Master
Servicer and the Residual Interestholders from amounts on deposit in the
Certificate Distribution Account the distributions as provided in Section
5.02(b) of the Sale and Servicing Agreement with respect to such Payment Date.
(b) On each Payment Date, the Owner Trustee shall cause the Paying Agent to
send to each Residual Interestholder the statement provided to the Owner Trustee
by the Master Servicer pursuant to Section 6.01 of the Sale and Servicing
Agreement with respect to such Payment Date.
(c) In the event that any withholding tax is imposed on the Trust's payment
(or allocations of income) to an Owner, such tax shall reduce the amount
otherwise distributable to the Owner in accordance with this Section. The Owner
Trustee is hereby authorized and directed to retain from amounts otherwise
distributable to the Owners sufficient funds for the payment of any tax that is
legally owed by the Trust (but such authorization shall not prevent the Owner
Trustee from contesting any such tax in appropriate proceedings, and withholding
payment of such tax, if permitted by law, pending the outcome of such
proceedings). The amount of any withholding tax imposed with respect to an Owner
shall be treated as cash distributed to such Owner at the time it is withheld by
the Trust and remitted to the appropriate taxing authority. In the event of any
claimed overwithholding, Owners shall have no claim for recovery against the
Trust or other Owners. If the amount withheld was not withheld from actual
distributions, the Trust may, at its option, (i) require the Owner to reimburse
the Trust for such withholding (and each Owner agrees to reimburse the Trust
promptly following such request) or (ii) reduce any subsequent distributions by
the amount of such withholding. If the Owner Trustee determines that a
withholding tax is payable with respect to a distribution (such as a
distribution to an Owner (or any other beneficial owner of the Owner Trust) that
is not a U.S. Person and that has not established an applicable exemption from
withholding (such as an effective Form W-8, Form 1001 or Form 4224), the Owner
Trustee shall in its sole discretion withhold such amounts as it determines are
required to be withheld in accordance with this paragraph (c). In the event that
an Owner wishes to apply for a refund of any such withholding tax, the Owner
Trustee shall reasonably cooperate with such owner in making such claim so long
as such Owner agrees to reimburse the Owner Trustee for any out-of-pocket
expenses incurred.
SECTION 5.3 METHOD OF PAYMENT. Subject to SECTION 3.10, distributions
required to be made to Owners on any Payment Date shall be made to each Owner
of, record on the preceding Record Date either by wire transfer, in immediately
available funds, to the account of such Holder at a bank or other entity having
appropriate facilities therefor, if such Owner shall have provided to the
Certificate Registrar appropriate written instructions at least five Business
Days prior to such Payment Date; or, if not, by check mailed to such Owner at
the address of such holder appearing in the Certificate Register.
SECTION 5.4 SEGREGATION OF MONEYS; NO INTEREST. Subject to SECTIONS 4.1,
5.1 AND 5.2, moneys received by the Owner Trustee hereunder and deposited into
the Certificate Distribution Account will be segregated except to the extent
required otherwise by law or the Sale and Servicing Agreement and shall be
invested in Permitted Investments at the direction of the Company. The Owner
Trustee shall not be liable for payment of any interest in respect of such
moneys.
SECTION 5.5 ACCOUNTING AND REPORTS TO THE CERTIFICATEHOLDER, OWNERS, THE
INTERNAL REVENUE SERVICE AND OTHERS. The Owner Trustee shall deliver to each
Owner [and the Securities Insurer,] as may be required by the Code and
applicable Treasury Regulations, or as may be requested by such Owner [and the
Securities Insurer,] such information, reports or statements as may be necessary
to enable each Owner to prepare its federal and state income tax returns.
Consistent with the Trust's characterization for tax purposes as a security
arrangement for the issuance of non-recourse debt so long as the Company or any
other Person is the sole Owner, no federal income tax return shall be filed on
behalf of the Trust unless either (i) the Owner Trustee [and the Securities
Insurer] shall receive an Opinion of Counsel that, based on a change in
applicable law occurring after the date hereof, or as a result of a transfer by
the Company permitted by SECTION 3.4, the Code requires such a filing or (ii)
the Internal Revenue Service shall determine that the Trust is required to file
such a return. In the event that there shall be two or more beneficial owners of
the Trust, the Owner Trustee shall inform the Indenture Trustee [and the
Securities Insurer] in writing of such event, (x) the Owner Trustee shall
prepare or shall cause to be prepared federal and, if applicable, state or local
partnership tax returns required to be filed by the Trust and shall remit such
returns to the Company (or if the Company no longer owns any Residual Interest
Certificates, the Owner designated for such purpose by the Company to the Owner
Trustee in writing) at least (5) days before such returns are due to be filed,
and (y) capital accounts shall be maintained for each Owner (or beneficial
owner) in accordance with the Treasury Regulations under Section 704(b) of the
Code reflecting each such Owner's (or beneficial owner's) share of the income,
gains, deductions, and losses of the Trust and/or guaranteed payments made by
the Trust and contributions to, and distributions from, the Trust. The Company
(or such designee Owner, as applicable) shall promptly sign such returns and
deliver such returns after signature to the Owner Trustee and such returns shall
be filed by the Owner Trustee with the appropriate tax authorities. In the event
that a "tax matters partner" (within the meaning of Code Section 6231(a)(7)) is
required to be appointed with respect to the Trust, the Company is hereby
designated as tax matters partner or, if the Company is not an Owner, the Owner
selected by a majority of the Owners (by Percentage Interest) shall be
designated as tax matters partner. In no event shall the Owner Trustee or the
Company (or such designee Owner, as applicable) be liable for any liabilities,
costs or expenses of the Trust or the Noteholders arising out of the application
of any tax law, including federal, state, foreign or local income or excise
taxes or any other tax imposed on or measured by income (or any interest,
penalty or addition with respect thereto or arising from a failure to comply
therewith) except for any such liability, cost or expense attributable to any
act or omission by the Owner Trustee or the Company (or such designee Owner, as
applicable), as the case may be, in breach of its obligations under this
Agreement.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1 GENERAL AUTHORITY. The Owner Trustee is authorized and
directed to execute and deliver or cause to be executed and delivered the Notes,
the Residual Interest Certificates and the Basic Documents to which the Trust is
to be a party and each certificate or other document attached as an exhibit to
or contemplated by the Basic Documents to which the Trust is to be a party and
any amendment or other agreement or instrument described in Article III, in each
case, in such form as the Company shall approve, as evidenced conclusively by
the Owner Trustee's execution thereof, and, on behalf of the Trust, to direct
the Indenture Trustee to authenticate and deliver the Notes in the aggregate
principal amount of $_____________. In addition to the foregoing, the Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of the Trust, pursuant to the Basic Documents.
SECTION 6.2 GENERAL DUTIES. It shall be the duty of the Owner Trustee:
(a) to discharge (or cause to be discharged) all of its responsibilities
pursuant to the terms of this Agreement and the Basic Documents to which the
Trust is a party and to administer the Trust in the interest of the Owners,
subject to the Basic Documents and in accordance with the provisions of this
Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed to
have discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator or the Indenture Trustee has agreed in
the Administration Agreement or this Agreement, respectively, to perform any act
or to discharge any duty of the Owner Trustee or the Trust hereunder or under
any Basic Document, and the Owner Trustee shall not be held liable for the
default or failure of the Administrator or the Indenture Trustee to carry out
its obligations under the Administration Agreement or this Agreement,
respectively; and
(b) to obtain and preserve, the Issuer's qualification to do business in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of the Indenture, the Notes, the
Collateral and each other instrument and agreement included in the Trust Estate.
SECTION 6.3 ACTION UPON INSTRUCTION.
(a) Subject to the terms of this Agreement and in accordance with the terms
of the Basic Documents, the Owners may by written instruction direct the Owner
Trustee in the management of the Trust but only to the extent consistent with
the limited purpose of the Trust. Such direction may be exercised at any time by
written instruction of the Owners pursuant to Article IV.
(b) The Owner Trustee shall not be required to take any action hereunder or
under any Basic Document if the Owner Trustee shall have reasonably determined,
or shall have been advised by counsel, that such action is likely to result in
liability on the part of the Owner Trustee or is contrary to the terms hereof or
of any Basic Document or is otherwise contrary to law.
(c) Whenever the Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or under
any Basic Document, the Owner Trustee shall promptly give notice (in such form
as shall be appropriate under the circumstances) to the Owners [and the
Securities Insurer requesting instruction from the Owners] [and the Securities
Insurer] as to the course of action to be adopted, and to the extent the Owner
Trustee acts in good faith [in accordance with any written instruction of the
Securities Insurer, or with the prior consent of the Securities Insurer,] the
Owners received, the Owner Trustee shall not be liable on account of such action
to any Person. [Upon the occurrence of a Securities Insurer Default no consent,
approval or direction of the Securities Insurer shall be required.] If the Owner
Trustee shall not have received appropriate instruction within 10 days of such
notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action, not inconsistent with
this Agreement or the Basic Documents, as it shall deem to be in the best
interests of the Owners, and shall have no liability to any Person for such
action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any Basic Document or any such provision is
ambiguous as to its application, or is, or appears to be, in conflict with any
other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the
course of action that the Owner Trustee is required to take with respect to a
particular set of facts, the Owner Trustee may give notice (in such form as
shall be appropriate under the circumstances) to [the Securities Insurer and]
the Owners requesting instruction and, to the extent that the Owner Trustee acts
or refrains from acting in good faith [in accordance with any such instruction
received from the Securities Insurer,] [or with the prior consent of the
Securities Insurer,] from the Owners, the Owner Trustee shall not be liable, on
account of such action or inaction, to any Person. If the Owner Trustee shall
not have received appropriate instruction within 10 days of such notice (or
within such shorter period of time as reasonably may be specified in such notice
or may be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action, not inconsistent with this
Agreement or the Basic Documents, as it shall deem to be in the best interests
of the Owners, and shall have no liability to any Person for such action or
inaction.
(e) [Notwithstanding anything in this Agreement to the contrary, upon the
occurrence of a Securities Insurer Default no consent, approval or direction of
the Securities Insurer shall be required for any action otherwise permitted
hereunder.]
SECTION 6.4 NO DUTIES EXCEPT AS SPECIFIED IN THIS AGREEMENT, THE BASIC
DOCUMENTS OR IN INSTRUCTIONS. The Owner Trustee shall not have any duty or
obligation to manage, make any payment with respect to, register, record, sell,
dispose of, or otherwise deal with the Trust Estate, or to otherwise take or
refrain from taking any action under, or in connection with, any document
contemplated hereby to which the Owner Trustee is a party, except as expressly
provided by the terms of this Agreement, any Basic Document or in any document
or written instruction received by the Owner Trustee pursuant to SECTION 6.3;
and no implied duties or obligations shall be read into this Agreement or any
Basic Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or file any
Securities and Exchange Commission filing for the Trust or to record this
Agreement or any Basic Document. The Owner Trustee nevertheless agrees that it
will, at its own cost and expense, promptly take all action as may be necessary
to discharge any liens on any part of the Trust Estate that result from actions
by, or claims against, the Owner Trustee that are not related to the ownership
or the administration of the Trust Estate.
SECTION 6.5 NO ACTION EXCEPT UNDER SPECIFIED DOCUMENTS OR Instructions.
The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise
deal with any part of the Trust Estate except (i) in accordance with the powers
granted to and the authority conferred upon the Owner Trustee pursuant to this
Agreement, (ii) in accordance with the Basic Documents and (iii) in accordance
with any document or instruction delivered to the Owner Trustee pursuant to
SECTION 6.3.
SECTION 6.6 RESTRICTIONS. The Owner Trustee shall not take any action
(a) that is inconsistent with the purposes of the Trust set forth in SECTION 2.3
or (b) that, to the actual knowledge of the Owner Trustee, would result in the
Trust's becoming taxable as a corporation for Federal income tax purposes. The
Owners shall not direct the Owner Trustee to take action that would violate the
provisions of this Section.
ARTICLE VII
CONCERNING THE OWNER TRUSTEE
SECTION 7.1 ACCEPTANCE OF TRUSTS AND DUTIES. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Agreement and the Basic
Documents. The Owner Trustee also agrees to disburse all moneys actually
received by it constituting part of the Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful misconduct or gross negligence or (ii) in the
case of the inaccuracy of any representation or warranty contained in SECTION
7.3 expressly made by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of judgment made by
a responsible officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in accordance with the instructions of the
Administrator or the Owners;
(c) no provision of this Agreement or any Basic Document shall require the
Owner Trustee to expend or risk funds or otherwise incur any financial liability
in the performance of any of its rights or powers hereunder or under any Basic
Document if the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof by the
Depositor or the Company or for the form, character, genuineness, sufficiency,
value or validity of any of the Trust Estate or for or in respect of the
validity or sufficiency of the Basic Documents, other than the certificate of
authentication on the Residual Interest Certificates, and the Owner Trustee
shall in no event assume or incur any liability, duty, or obligation to any
Noteholder or to any Owner, other than as expressly provided for herein and in
the Basic Documents;
(f) the Owner Trustee shall not be liable for the default or misconduct of
the Administrator, the Depositor, the Company, the Indenture Trustee, the Master
Servicer or the Servicer under any of the Basic Documents or otherwise and the
Owner Trustee shall have no obligation or liability to perform the obligations
of the Trust under this Agreement or the Basic Documents that are required to be
performed by the Administrator under the Administration Agreement, the Indenture
Trustee under the Indenture or the Master Servicer or Servicer under the Sale
and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Agreement, or to institute, conduct or
defend any litigation under this Agreement or otherwise or in relation to this
Agreement or any Basic Document, at the request, order or direction of any of
the Owners, unless such Owners have offered to the Owner Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities that
may be incurred by the Owner Trustee therein or thereby. The right of the Owner
Trustee to perform any discretionary act enumerated in this Agreement or in any
Basic Document shall not be construed as a duty, and the Owner Trustee shall not
be answerable for other than its gross negligence or willful misconduct in the
performance of any such act provided, that the Owner Trustee shall be liable for
its negligence or willful misconduct in the event that it assumes the duties and
obligations of the Indenture Trustee under the Sale and Servicing Agreement
pursuant to SECTION 10.5.
SECTION 7.2 FURNISHING OF DOCUMENTS. The Owner Trustee shall furnish (a)
to the Owners [and the Securities Insurer] promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments furnished
to the Owner Trustee under the Basic Documents and (b) to Noteholders promptly
upon written request therefor, copies of the Sale and Servicing Agreement, the
Administration Agreement and the Owner Trust Agreement.
SECTION 7.3 REPRESENTATIONS AND WARRANTIES.
(a) The Owner Trustee hereby represents and warrants to the Depositor, [the
Securities Insurer] and the Company, for the benefit of the Owners, that:
(i) It is a ____________________ duly organized and validly existing
in good standing under the laws of the State of _________________. It has
all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement.
(ii) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(iii) Neither the execution nor the delivery by it of this Agreement
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene
any Federal or _________________ law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment
or order binding on it, or constitute any default under its charter
documents or by-laws or any indenture, mortgage, contract, agreement or
instrument to which it is a party or by which any of its properties may be
bound.
(b) The Paying Agent hereby represents and warrants to the Depositor, [the
Securities Insurer] and the Company that:
(i) It is a ________________________ duly organized and validly
existing in good standing under the laws of the United States. It has all
requisite power and authority to execute, deliver and perform its
obligations under this Agreement.
(ii) It has taken all action necessary to authorize the execution and
delivery by it of this Agreement, and this Agreement will be executed and
delivered by one of its officers who is duly authorized to execute and
deliver this Agreement on its behalf.
(iii) Neither the execution nor the delivery by it of this Agreement
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will contravene
any Federal or State law, governmental rule or regulation governing the
banking or trust powers of the Paying Agent or any judgment or order
binding on it, or constitute any default under its charter documents or
by-laws or any indenture, mortgage, contract, agreement or instrument to
which it is a party or by which any of its properties may be bound.
SECTION 7.4 RELIANCE; ADVICE OF COUNSEL.
(a) The Owner Trustee shall incur no liability to anyone in acting upon any
signature, instrument, notice, resolution, request, consent, order, certificate,
report, opinion, bond, or other document or paper believed by it to be genuine
and believed by it to be signed by the proper party or parties. The Owner
Trustee may accept a certified copy of a resolution of the board of directors or
other governing body of any corporate party as conclusive evidence that such
resolution has been duly adopted by such body and that the same is in full force
and effect. As to any fact or matter the method of the determination of which is
not specifically prescribed herein, the Owner Trustee may for all purposes
hereof rely on a certificate, signed by the president or any vice president or
by the treasurer or other authorized officers of the relevant party, as to such
fact or matter and such certificate shall constitute full protection to the
Owner Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the
performance of its duties and obligations under this Agreement or the Basic
Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or
attorneys if such agents or attorneys shall have been selected by the Owner
Trustee with reasonable care, and (ii) may consult with counsel, accountants and
other skilled persons to be selected with reasonable care and employed by it.
The Owner Trustee shall not be liable for anything done, suffered or omitted in
good faith by it in accordance with the opinion or advice of any such counsel,
accountants or other such persons and not contrary to this Agreement or any
Basic Document.
SECTION 7.5 NOT ACTING IN INDIVIDUAL CAPACITY. Except as provided in
this Agreement, in accepting the trusts hereby created
___________________________ acts solely as Owner Trustee hereunder and not in
its individual capacity and all Persons having any claim against the Owner
Trustee by reason of the transactions contemplated by this Agreement or any
Basic Document shall look only to the Trust Estate for payment or satisfaction
thereof.
SECTION 7.6 OWNER TRUSTEE NOT LIABLE FOR RESIDUAL INTEREST CERTIFICATES
OR HOME LOANS. The recitals contained herein and in the Residual Interest
Certificates (other than the signature and countersignature of the Owner Trustee
on the Residual Interest Certificates) shall be taken as the statements of the
Depositor and the Company, and the Owner Trustee assumes no responsibility for
the correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, of any Basic Document or of the
Residual Interest Certificates (other than the signature and countersignature of
the Owner Trustee on the Residual Interest Certificates and as specified in
Section 7.3) or the Notes, or of any Home Loans or related documents. The Owner
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Home Loan, or the
perfection and priority of any security interest created by any Home Loan or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Trust Estate or its ability to generate the payments to be
distributed to Owners under this Agreement or the Noteholders under the
Indenture, including, without limitation: the existence, condition and ownership
of any Mortgaged Property; the existence and enforceability of any insurance
thereon; the existence and contents of any Home Loan on any computer or other
record thereof, the validity of the assignment of the Home Loans to the Trust or
of any intervening assignment; the completeness of any Home Loan; the
performance or enforcement of any Home Loan; the compliance by the Depositor,
the Company, the Master Servicer or the Servicer with any warranty or
representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action of the
Administrator, the Indenture Trustee, the Master Servicer or the Servicer or any
subservicer taken in the name of the Owner Trustee.
SECTION 7.7 OWNER TRUSTEE MAY OWN RESIDUAL INTEREST CERTIFICATES AND
NOTES. The Owner Trustee in its individual or any other capacity may become the
owner or pledgee of Residual Interest Certificates or Notes and may deal with
the Depositor, the Company, the Administrator, the Indenture Trustee and the
Master Servicer in banking transactions with the same rights as it would have if
it were not Owner Trustee.
SECTION 7.8 LICENSES. The Owner Trustee shall cause the Trust to use its
best efforts to obtain and maintain the effectiveness of any licenses required
in connection with this Agreement and the Basic Documents and the transactions
contemplated hereby and thereby until such time as the Trust shall terminate in
accordance with the terms hereof.
ARTICLE VIII
COMPENSATION OF OWNER TRUSTEE AND PAYING AGENT
SECTION 8.1 FEES AND EXPENSES. The Owner Trustee shall receive as
compensation for its services hereunder such fees as have been separately agreed
upon before the date hereof between the Company and the Owner Trustee, and the
Owner Trustee shall be entitled to be reimbursed by the Company for its other
reasonable expenses hereunder, including the reasonable compensation, expenses
and disbursements of such agents, representatives, experts and counsel as the
Owner Trustee may employ in connection with the exercise and performance of its
rights and its duties hereunder. The Paying Agent shall receive as compensation
for its services hereunder such fees, if any, as have been separately agreed
upon before the date hereof between the Company and the Paying Agent.
SECTION 8.2 INDEMNIFICATION. The Company shall be liable as primary
obligor, and the Master Servicer as secondary obligor pursuant to the
Administration Agreement, for, and shall indemnify the Owner Trustee, the Paying
Agent and their successors, assigns, agents and servants (collectively, the
"INDEMNIFIED PARTIES") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "EXPENSES") which may at any
time be imposed on, incurred by, or asserted against the Owner Trustee or any
Indemnified Party in any way relating to or arising out of this Agreement, the
Basic Documents, the Trust Estate, the administration of the Trust Estate or the
action or inaction of the Owner Trustee or the Paying Agent hereunder. The
indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Agreement. In any
event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section, the Owner Trustee's or Paying Agent's choice of legal
counsel shall be subject to the approval of the Company, which approval shall
not be unreasonably withheld.
SECTION 8.3 PAYMENTS TO THE OWNER TRUSTEE AND PAYING AGENT. Any amounts
paid to the Owner Trustee and/or Paying Agent pursuant to this Article VIII
shall be deemed not to be a part of the Trust Estate immediately after such
payment.
ARTICLE IX
TERMINATION OF OWNER TRUST AGREEMENT
SECTION 9.1 TERMINATION OF OWNER TRUST AGREEMENT.
(a) This Agreement (other than Article VIII) and the Trust shall terminate
and be of no further force or effect on the earlier of: (i) the satisfaction and
discharge of the Indenture pursuant to Section 4.01 of the Indenture and the
termination of the Sale and Servicing Agreement and the Insurance Agreement; and
(ii) the expiration of 21 years from the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx (the late ambassador of the United States to
the Court of St. James's) alive on the date hereof. The bankruptcy, liquidation,
dissolution, death or incapacity of any Owner shall not (x) operate to terminate
this Agreement or the Trust, nor (y) entitle such Owner's legal representatives
or heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of all or any part of the Trust or Trust Estate
nor (z) otherwise affect the rights, obligations and liabilities of the parties
hereto.
(b) The Residual Interest Certificates shall be subject to an early
redemption or termination at the option of the Majority Residual
Interestholders, [the Securities Insurer] or the Master Servicer in the manner
and subject to the provisions of Section 11.02 of the Sale and Servicing
Agreement.
(c) Except as provided in SECTIONS 9.1(A) AND (B) above, none of the
Depositor, the Company, the Securities Insurer nor any Owner shall be entitled
to revoke or terminate the Trust.
(d) Notice of any termination of the Trust, specifying the Payment Date
upon which the Certificateholders shall surrender their Residual Interest
Certificates to the Paying Agent for payment of the final distributions and
cancellation, shall be given by the Owner Trustee to the Certificateholders,
[the Securities Insurer] and the Rating Agencies mailed within _________
Business Days of receipt by the Owner Trustee of notice of such termination
pursuant to SECTION 9.1(A) or (B) above, which notice given by the Owner Trustee
shall state (i) the Payment Date upon or with respect to which final payment of
the Residual Interest Certificates shall be made upon presentation and surrender
of the Residual Interest Certificates at the office of the Paying Agent therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Payment Date is not applicable, payments being
made only upon presentation and surrender of the Residual Interest Certificates
at the office of the Paying Agent therein specified. The Owner Trustee shall
give such notice to the Certificate Registrar (if other than the Owner Trustee)
and the Paying Agent at the time such notice is given to Certificateholders.
Upon presentation and surrender of the Residual Interest Certificates, the
Paying Agent shall cause to be distributed to Certificateholders amounts
distributable on such Payment Date pursuant to Section 5.02 of the Sale and
Servicing Agreement.
In the event that all of the Certificateholders shall not surrender their
Residual Interest Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Residual Interest Certificates for cancellation and receive the final
distribution with respect thereto. If within one year after the second notice
all the Residual Interest Certificates shall not have been surrendered for
cancellation, the Owner Trustee may take appropriate steps, or may appoint an
agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of their Residual Interest Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement. Any funds remaining in the Trust after exhaustion of
such remedies shall be distributed by the Paying Agent to the Residual
Interestholders on a pro rata basis.
(e) Upon the winding up of the Trust and its termination, the Owner Trustee
shall cause the Certificate of Trust to be canceled by filing a certificate of
cancellation with the Secretary of State in accordance with the provisions of
Section 3820 of the Business Trust Statute.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1 ELIGIBILITY REQUIREMENTS FOR OWNER TRUSTEE. The Owner
Trustee shall at all times be a corporation satisfying the provisions of Section
3807(a) of the Business Trust Statute; authorized to exercise corporate powers
having a combined capital and surplus of at least $50,000,000 and subject to
supervision or examination by Federal or state authorities; having (or having a
parent which has) a long-term rating of at least "___" by _____________ and
______________ [and being acceptable to the Securities Insurer]. If such
corporation shall publish reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purpose of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section, the Owner Trustee shall resign immediately in the manner and with
the effect specified in Section 10.2.
SECTION 10.2 RESIGNATION OR REMOVAL OF OWNER TRUSTEE . The Owner Trustee
may at any time resign and be discharged from the trusts hereby created by
giving written notice thereof to the Administrator, [the Securities Insurer] and
the Indenture Trustee. Upon receiving such notice of resignation, the
Administrator shall promptly appoint a successor Owner Trustee [(acceptable to
the Securities Insurer)] by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Owner Trustee [or the Securities Insurer]
may petition any court of competent jurisdiction for the appointment of a
successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of SECTION 10.1 and shall fail to resign after written
request therefor by the Administrator or the Securities Insurer, or if at any
time the Owner Trustee shall be legally unable to act, or shall be adjudged
bankrupt or insolvent, or a receiver of the Owner Trustee or of its property
shall be appointed, or any public officer shall take charge or control of the
Owner Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then [the Securities Insurer, or] the Administrator
[with the consent of the Securities Insurer,] may remove the Owner Trustee. If
the [Securities Insurer or] the Administrator shall remove the Owner Trustee
under the authority of the immediately preceding sentence, [the Securities
Insurer, or] the Administrator [with the prior consent of the Securities
Insurer,] shall promptly appoint a successor Owner Trustee by written instrument
in duplicate, one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed and one copy to the successor Owner Trustee and payment
of all fees owed to the outgoing Owner Trustee.
Any resignation or removal of the Owner Trustee and appointment of a
successor Owner Trustee pursuant to any of the provisions of this Section shall
not become effective until acceptance of appointment by the successor Owner
Trustee pursuant to SECTION 10.3, [Securities Insurer provides written approval
and payment of all fees and expenses owed to the outgoing Owner Trustee.] The
Administrator shall provide notice of such resignation or removal of the Owner
Trustee to each of the Rating Agencies [and the Securities Insurer.]
SECTION 10.3 SUCCESSOR OWNER TRUSTEE. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to the
Administrator, [the Securities Insurer] and to its predecessor Owner Trustee an
instrument accepting such appointment under this Agreement, and thereupon the
resignation or removal of the predecessor Owner Trustee shall become effective
and such successor Owner Trustee (if acceptable to the Securities Insurer),
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties, and obligations of its predecessor under this
Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses deliver to
the successor Owner Trustee all documents and statements and monies held by it
under this Agreement; and the Administrator and the predecessor Owner Trustee
shall execute and deliver such instruments and do such other things as may
reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties, and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to SECTION 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, the Administrator shall mail notice of the successor of such Owner
Trustee to all Owners, the Indenture Trustee, the Noteholders, [the Securities
Insurer] and the Rating Agencies. If the Administrator fails to mail such notice
within 10 days after acceptance of appointment by the successor Owner Trustee,
the successor Owner Trustee shall cause such notice to be mailed at the expense
of the Administrator.
SECTION 10.4 MERGER OR CONSOLIDATION OF OWNER TRUSTEE. Any corporation
into which the Owner Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, PROVIDED
such corporation shall be eligible pursuant to SECTION 10.1, without the
execution or filing of any instrument or any further act on the part of any of
the parties hereto, anything herein to the contrary notwithstanding; PROVIDED
FURTHER that the Owner Trustee shall mail notice of such merger or consolidation
to [the Securities Insurer and] the Rating Agencies.
SECTION 10.5 APPOINTMENT OF CO-OWNER TRUSTEE OR SEPARATE OWNER Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Estate or any Mortgaged Property may at the time be located, and
for the purpose of performing certain duties and obligations of the Owner
Trustee with respect to the Trust and the Residual Interest Certificates under
the Sale and Servicing Agreement, the Administrator and the Owner Trustee acting
jointly shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee [and acceptable to the
Securities Insurer] to act as co-owner trustee, jointly with the Owner Trustee,
or separate trustee or separate trustees, of all or any part of the Trust
Estate, and to vest in such Person, in such capacity, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Administrator[, the
Securities Insurer] and the Owner Trustee may consider necessary or desirable.
If the Administrator shall not have joined in such appointment within 25 days
after the receipt by it of a request so to do, the Owner Trustee [(with the
consent of the Securities Insurer)] shall have the power to make such
appointment. No co-owner trustee or separate owner trustee under this Agreement
shall be required to meet the terms of eligibility as a successor trustee
pursuant to SECTION 10.1 and no notice of the appointment of any co-trustee or
separate owner trustee shall be required pursuant to SECTION 10.3 except that
notice to, and the written consent of, the Securities Insurer shall be required
for the appointment of a co-trustee.
Each separate owner trustee and co-owner trustee shall, to the extent
permitted by law, be appointed and act subject to the following provision and
conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the Owner Trustee shall be conferred upon and exercised or performed
by the Owner Trustee and such separate owner trustee or co-owner trustee
jointly (it being understood that such separate owner trustee or co-owner
trustee is not authorized to act separately without the Owner Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed, the
Owner Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties, and obligations
(including the holding of title to the Trust or any portion thereof in any
such jurisdiction) shall be exercised and performed singly by such separate
owner trustee or co-owner trustee, but solely at the direction of the Owner
Trustee; PROVIDED that Paying Agent, in performing its duties and
obligations under the Sale and Servicing Agreement, may act separately in
its capacity as Indenture Trustee without the Owner Trustee joining in such
Acts;
(ii) no owner trustee under this Agreement shall be personally liable
by reason of any act or omission of any other owner trustee under this
Agreement; and
(iii) the Administrator and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate owner trustee or
co-owner trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to the separate owner trustees and co-owner trustees,
as if given to each of them. Every instrument appointing any separate owner
trustee or co-owner trustee, other than this Agreement, shall refer to this
Agreement and to the conditions of this Article. Each separate owner trustee and
co-owner trustee, upon its acceptance of appointment, shall be vested with the
estates specified in its instrument of appointment, either jointly with the
Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this
Agreement relating to the conduct of, affecting the liability of, or affording
protection to, the Owner Trustee. Each such instrument shall be filed with the
Owner Trustee and a copy thereof given to the Administrator.
Any separate owner trustee or co-owner trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate owner trustee or
co-owner trustee shall die, become incapable of acting, resign or be removed,
all of its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
The Indenture Trustee, in its capacity as Paying Agent, shall not have any
rights, duties or obligations except as expressly provided in this Agreement and
the Sale and Servicing Agreement.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 SUPPLEMENTS AND AMENDMENTS. This Agreement may be amended by
the Depositor, the Company and the Owner Trustee, [with the prior consent of the
Securities Insurer and] with prior written notice to the Rating Agencies, but
without the consent of any of the Noteholders or the Owners or the Indenture
Trustee, to cure any ambiguity, to correct or supplement any provisions in this
Agreement or for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions in this Agreement or of modifying in
any manner the rights of the Noteholders or the Owners PROVIDED, HOWEVER, that
such action shall not adversely affect in any material respect the interests of
any Noteholder or Owner, or, without its consent, the Paying Agent. An amendment
described above shall be deemed not to adversely affect in any material respect
the interests of any Noteholder or Owner if (i) an opinion of counsel is
obtained to such effect, and (ii) the party requesting the amendment satisfies
the Rating Agency Condition with respect to such amendment.
This Agreement may also be amended from time to time by the Depositor, the
Company and the Owner Trustee, with the prior written consent of the Rating
Agencies, the Securities Insurer and with the prior written consent of the
Indenture Trustee, the Holders (as defined in the Indenture) of Notes evidencing
more than 50% of the Outstanding Amount of the Notes and the Majority Residual
Interestholders, and if affected thereby, the Paying Agent, for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of the
Noteholders or the Owners; PROVIDED, HOWEVER, that no such amendment shall (a)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, collections of payments on the Home Loans or distributions that shall
be required to be made for the benefit of the Noteholders or the
Certificateholders or (b) reduce the aforesaid percentage of the Outstanding
Amount of the Notes or the Percentage Interests required to consent to any such
amendment, in either case of clause (a) or (b) without the consent of the
holders of all the outstanding Notes, and in the case of clause (b) without the
consent of the holders of all the outstanding Residual Interest Certificates.
Promptly after the execution of any such amendment or consent, the Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder, the Indenture Trustee[, the Securities
Insurer] and each of the Rating Agencies.
It shall not be necessary for the consent of Owners, the Noteholders or the
Indenture Trustee pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof. The manner of obtaining such consents (and any
other consents of Owners provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe.
Promptly after the execution of any amendment to the Certificate of Trust,
the Owner Trustee shall cause the filing of such amendment with the Secretary of
State.
Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, the Owner Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Owner Trustee's
own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.2 NO LEGAL TITLE TO TRUST ESTATE IN OWNERS. The Owners shall
not have legal title to any part of the Trust Estate. The Owners shall be
entitled to receive distributions with respect to their undivided ownership
interest therein only in accordance with Articles V and IX. No transfer, by
operation of law or otherwise, of any right, title, or interest of the Owners to
and in their ownership interest in the Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Trust
Estate.
SECTION 11.3 LIMITATIONS ON RIGHTS OF OTHERS. The provisions of this
Agreement are solely for the benefit of the Owner Trustee, the Depositor, the
Company, the Owners, the Administrator, the Paying Agent, the Securities Insurer
and, to the extent expressly provided herein, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 11.4 NOTICES. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing, mailed by
certified mail, postage prepaid, return receipt requested, and shall be deemed
given upon actual receipt by the intended recipient, at the following addresses:
(i) if to the Owner Trustee, its Corporate Trust Office; (ii) if to the
Depositor, PaineWebber Mortgage Acceptance Corporation IV, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx Xxxxxx, Esq., General
Counsel; (iii) if to the Company, _____________________________________________
(iv) ___________________________________________________________________________
________________________________________________________________________________
[(v) if to the Securities Insurer ______________________________________________
_______________________________________________________________________________]
or, as to each such party, at such other address as shall be designated by such
party in a written notice to each other party.
(b) Any notice required or permitted to be given to an Owner shall be given
by first-class mail, postage prepaid, at the address of such Owner 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 Owner receives such notice.
SECTION 11.5 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6 SEPARATE COUNTERPARTS. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, the
Depositor, the Company, the Securities Insurer, the Owner Trustee and its
successors and each owner and its successors and permitted assigns, all as
herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by an Owner shall bind the successors and assigns of such
Owner.
SECTION 11.8 NO PETITION. The Owner Trustee, by entering into this
Agreement, each Owner, by accepting a Residual Interest Certificate, the
Depositor, the Company and the Indenture Trustee and each Noteholder by
accepting the benefits of this Agreement, hereby covenant and agree that they
will not at any time institute against the Company, the Depositor or the Trust,
as the case may be, or join in any institution against the Company or the Trust
of, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States Federal or state
bankruptcy or law in connection with any obligations relating to the Residual
Interest Certificates, the Notes, this Agreement or any of the Basic Documents.
SECTION 11.9 NO RECOURSE. Each Owner by accepting a Residual Interest
Certificate acknowledges that such Residual Interest Certificate represents a
beneficial interest in the Trust only and does not represent an interest in or
an obligation of the Company, the Master Servicer, the Depositor, the
Administrator, the Owner Trustee, the Indenture Trustee, [the Securities
Insurer] or any Affiliate thereof and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated in
this Agreement, the Residual Interest Certificates or the Basic Documents.
SECTION 11.10 HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 11.11 GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.12 RESIDUAL INTEREST TRANSFER RESTRICTIONS. The Residual
Interest may not be acquired by or for the account of a Benefit Plan Investor.
By accepting and holding a Residual Interest Certificate, the Owner thereof
shall be deemed to have represented and warranted that it is not a Benefit Plan
Investor.
SECTION 11.13 [THIRD-PARTY BENEFICIARY. The parties hereto acknowledge
that the Securities Insurer is an express third party beneficiary hereof
entitled to enforce any rights reserved to it hereunder as if it were actually a
party hereto.]
[SIGNATURE PAGE FOLLOWS]
IN WITNESS OF, the parties hereto have caused this Owner Trust Agreement to
be duly executed by their respective officers hereunto duly authorized, as of
the day and year first above written.
PAINEWEBBER MORTGAGE ACCEPTANCE
CORPORATION IV,
Depositor
By: ___________________________________
Name:
Title:
_______________________________________,
Transferor
By: ___________________________________
Name:
Title:
_______________________________________,
not in its individual capacity but
solely as Owner Trustee
By: ___________________________________
Name:
Title:
________________________________, not in
its individual capacity but solely as
Paying Agent
By: ___________________________________
Name:
Title:
EXHIBIT A
TO THE OWNER TRUST AGREEMENT
FORM OF RESIDUAL INTEREST CERTIFICATE
THE RESIDUAL INTEREST IN THE TRUST REPRESENTED BY THIS RESIDUAL INTEREST
CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"), OR ANY STATE SECURITIES LAWS. THIS RESIDUAL
INTEREST CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE
DISPOSED OF BY THE HOLDER HEREOF ONLY TO (I) A "QUALIFIED INSTITUTIONAL BUYER"
AS DEFINED IN RULE 144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER
THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE ACT PURSUANT TO RULE 144A OR (II) AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE ACT (INCLUDING, BUT NOT LIMITED TO,
_________________________) IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION
REQUIREMENTS OF THE ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS
RESIDUAL INTEREST UNDER THE ACT OR ANY STATE SECURITIES LAWS.
EXCEPT AS PROVIDED IN SECTION 3.10(B) OF THE OWNER TRUST AGREEMENT, NO TRANSFER
OF THIS RESIDUAL INTEREST CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN SHALL BE
MADE UNLESS THE OWNER TRUSTEE HAS RECEIVED A CERTIFICATE FROM THE TRANSFEREE TO
THE EFFECT THAT SUCH TRANSFEREE (I) IS NOT (A) AN "EMPLOYEE BENEFIT PLAN" WITHIN
THE MEANING OF SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED, (B) A "PLAN" WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR (C) AN ENTITY WHOSE UNDERLYING
ASSETS INCLUDE PLAN ASSETS BY REASON OF A PLAN'S INVESTMENT IN THE ENTITY (EACH,
A "BENEFIT PLAN INVESTOR"), AND (II) IS NOT DIRECTLY OR INDIRECTLY PURCHASING
SUCH RESIDUAL INTEREST CERTIFICATE ON BEHALF OF, AS INVESTMENT MANAGER OF, AS
NAMED FIDUCIARY OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A BENEFIT PLAN
INVESTOR.
________________ HOME LOAN OWNER TRUST 199__-__
RESIDUAL INTEREST CERTIFICATE
No. ____
THIS CERTIFIES THAT _______________________________ (the "OWNER") is the
registered owner of a ____% residual interest in ___________ Home Loan Owner
Trust 199__-__ (the "TRUST") existing under the laws of the State of Delaware
and created pursuant to the Owner Trust Agreement dated as of __________, 199__
(the "OWNER TRUST AGREEMENT") between PaineWebber Mortgage Acceptance
Corporation IV, as Depositor, ____________________________, as the Company,
___________________, not in its individual capacity but solely in its fiduciary
capacity as owner trustee under the Owner Trust Agreement (the "OWNER TRUSTEE")
and ______________________________, as Paying Agent (the "PAYING AGENT").
Initially capitalized terms used but not defined herein have the meanings
assigned to them in the Owner Trust Agreement. The Owner Trustee, on behalf of
the Issuer and not in its individual capacity, has executed this Residual
Interest Certificate by one of its duly authorized signatories as set forth
below. This Residual Interest Certificate is one of the Residual Interest
Certificates referred to in the Owner Trust Agreement and is issued under and is
subject to the terms, provisions and conditions of the Owner Trust Agreement to
which the holder of this Residual Interest Certificate by virtue of the
acceptance hereof agrees and by which the holder hereof is bound. Reference is
hereby made to the Owner Trust Agreement and the Sale and Master Servicing
Agreement for the rights of the holder of this Residual Interest Certificate, as
well as for the terms and conditions of the Trust created by the Owner Trust
Agreement.
The holder, by its acceptance hereof, agrees not to transfer this Residual
Interest Certificate except in accordance with terms and provisions of the Owner
Trust Agreement.
THIS RESIDUAL INTEREST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW
PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Residual Interest Certificate to be
duly executed.
_________ HOME LOAN OWNER TRUST 199__-__
By: _______________________, not in its
individual capacity but solely as
Owner Trustee under the Owner Trust
Agreement
By: ___________________________________
Authorized Signatory
DATED: ____________, 199__
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Owner
Trust Agreement.
By: ______________________, not in its
individual capacity but solely as
Owner Trustee under the Owner Trust
Agreement, as Authenticating Agent
By: ___________________________________
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder,
hereby irrevocably constituting and appointing
____________________________________________________________________ Attorney to
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated: _______________
_____________________________________*/
Signature Guaranteed:
_____________________________________*/
____________________
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
EXHIBIT B
TO THE OWNER TRUST AGREEMENT
CERTIFICATE OF TRUST OF
______________ HOME LOAN OWNER TRUST 199__-__
THIS Certificate of Trust of ___________ Home Loan Owner Trust 199__-__
(the "TRUST"), dated ________, 199__, is being duly executed and filed by
____________________________________ , a ________________________, as trustee,
and __________________________, as paying agent, to form a business trust under
the Delaware Business Trust Act (12 DEL. CODE, ss. 3801 et seq.).
1. NAME. The name of the business trust formed hereby is __________________
Home Loan Owner Trust 199__-__.
2. TRUSTEE. The name and business address of the trustee of the Trust, in
the State of ____________________ is ____________________ ____________________
___________________________________ ___________________________________.
* * *
IN WITNESS WHEREOF, the undersigned, being the owner trustee of the Trust,
have executed this Certificate of Trust as of the date first above written.
_______________________________________,
not in its individual capacity but
solely as owner trustee under an Owner
Trust Agreement dated as of
______________, 199__
By: ___________________________________
Name:
Title:
