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XXXXXXX XXXXX MORTGAGE INVESTORS, INC.,
as Company
and
WILMINGTON TRUST COMPANY,
as Owner Trustee
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AMENDED AND RESTATED
TRUST AGREEMENT
Dated as of March 1, 1998
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PACIFICAMERICA HOME EQUITY LOAN ASSET-BACKED CERTIFICATES,
SERIES 1998-1
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Table of Contents
Section Page
ARTICLE I
Definitions.................................................................................-1-
1.01. Definitions.........................................................................-1-
1.02. Other Definitional Provisions.......................................................-1-
ARTICLE II
Organization................................................................................-2-
2.01. Name................................................................................-2-
2.02. Office..............................................................................-2-
2.03. Purposes and Powers.................................................................-2-
2.04. Appointment of Owner Trustee........................................................-3-
2.05. Initial Capital Contribution of Owner Trust Estate..................................-3-
2.06. Declaration of Trust................................................................-3-
2.07. Liability of the Holders of the Certificates........................................-4-
2.08. Title to Trust Property.............................................................-4-
2.09. Situs of Trust......................................................................-4-
2.10. Representations and Warranties of the Company.......................................-4-
2.11. Payment of Trust Fees...............................................................-5-
2.12. Investment Company..................................................................-5-
ARTICLE III
Conveyance of the Mortgage Loans;
Certificates...............................................................................-6-
3.01. Conveyance of the Mortgage Loans....................................................-6-
3.02. Initial Ownership...................................................................-6-
3.03. The Certificates....................................................................-6-
3.04. Authentication of Certificates......................................................-7-
3.05. Registration of and Limitations on Transfer and Exchange of Certificates............-7-
3.06. Mutilated, Destroyed, Lost or Stolen Certificates..................................-10-
3.07. Persons Deemed Certificateholders..................................................-10-
3.08. Access to List of Certificateholders' Names and Addresses..........................-10-
3.09. Maintenance of Office or Agency....................................................-10-
3.10. Certificate Paying Agent...........................................................-11-
ARTICLE IV
Authority and Duties of Owner Trustee......................................................-12-
4.01. General Authority..................................................................-12-
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Section Page
4.02. General Duties.....................................................................-12-
4.03. Action upon Instruction............................................................-12-
4.04. No Duties Except as Specified under Specified Documents or in Instructions.........-13-
4.05. Restrictions.......................................................................-14-
4.06. Prior Notice to Certificateholders with Respect to Certain Matters.................-14-
4.07. Action by Certificateholders with Respect to Certain Matters.......................-16-
4.08. Action by Certificateholders with Respect to Bankruptcy............................-16-
4.09. Restrictions on Certificateholders' Power..........................................-16-
4.10. Majority Control...................................................................-16-
ARTICLE V
Application of Trust Funds.................................................................-17-
5.01. Distributions......................................................................-17-
5.02. Method of Payment..................................................................-17-
5.03. Tax Returns........................................................................-18-
5.04. Statements to Certificateholders...................................................-18-
ARTICLE VI
Concerning the Owner Trustee...............................................................-18-
6.01. Acceptance of Trusts and Duties....................................................-18-
6.02. Furnishing of Documents............................................................-19-
6.03. Representations and Warranties.....................................................-19-
6.04. Reliance; Advice of Counsel........................................................-20-
6.05. Not Acting in Individual Capacity..................................................-21-
6.06. Owner Trustee Not Liable for Certificates or Related Documents.....................-21-
6.07. Owner Trustee May Own Certificates and Notes.......................................-21-
6.08. Payments from Owner Trust Estate...................................................-21-
6.09. Doing Business in Other Jurisdictions..............................................-22-
6.10. Liability of Certificate Registrar and Certificate Paying Agent....................-22-
ARTICLE VII
Compensation of Owner Trustee..............................................................-22-
7.01. Owner Trustee's Fees and Expenses..................................................-22-
7.02. Indemnification....................................................................-22-
ARTICLE VIII
Termination of Trust Agreement.............................................................-23-
8.01. Termination of Trust Agreement.....................................................-23-
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ARTICLE IX
Successor Owner Trustees and Additional Owner Trustees.....................................-25-
9.01. Eligibility Requirements for Owner Trustee.........................................-25-
9.02. Resignation and Replacement of Owner Trustee.......................................-25-
9.03. Successor Owner Trustee............................................................-26-
9.04. Merger or Consolidation of Owner Trustee...........................................-26-
9.05. Appointment of Co-Trustee or Separate Trustee......................................-26-
ARTICLE X
Miscellaneous..............................................................................-28-
10.01. Amendments.........................................................................-28-
10.02. No Legal Title to Owner Trust Estate...............................................-29-
10.03. Limitations on Rights of Others....................................................-30-
10.04. Notices............................................................................-30-
10.05. Severability.......................................................................-30-
10.06. Separate Counterparts..............................................................-31-
10.07. Successors and Assigns.............................................................-31-
10.08. No Petition........................................................................-31-
10.09. No Recourse........................................................................-31-
10.10. Headings...........................................................................-31-
10.11. GOVERNING LAW......................................................................-31-
10.12. Integration........................................................................-31-
10.13. Third-Party Beneficiary............................................................-31-
10.14. Suspension and Termination of Note Insurer's Rights................................-32-
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Section Page
EXHIBIT
Exhibit A - Form of Certificate..................................................................A-1
Exhibit B - Certificate of Trust of PacificAmerica Home Equity Loan Trust .......................B-1
Exhibit C - Form of Rule 144A Investment Representation..........................................C-1
Exhibit D - Form of Investor Representation Letter...............................................D-1
Exhibit E - Form of Transferor Representation Letter.............................................E-1
Exhibit F - Form of Certificate of Non-Foreign Status............................................F-1
Exhibit G - Form of ERISA Representation Letter..................................................G-1
Exhibit H - Form of Representation Letter........................................................H-1
Exhibit I - Initial Trust Agreement..............................................................I-1
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This Amended and Restated Trust Agreement (which amends and restates the
Trust Agreement, dated March 6, 1998, between Xxxxxxx Xxxxx Mortgage Investors,
Inc. (the "Company"), and Wilmington Trust Company, a Delaware banking
corporation, as owner trustee (the "Owner Trustee"), which is attached hereto as
Exhibit I), dated as of March 1, 1998 (as amended from time to time, this "Trust
Agreement"), between the Company and the Owner Trustee,
WITNESSETH THAT:
In consideration of the mutual agreements herein contained, the Company
and the Owner Trustee agree as follows:
ARTICLE I
Definitions
Section 1.01. Definitions. For all purposes of this Trust Agreement,
except as otherwise expressly provided herein or unless the context otherwise
requires, capitalized terms not otherwise defined herein shall have the meanings
assigned to such terms in Appendix A to the Indenture, dated March 1, 1998,
between PacificAmerica Home Equity Loan Trust Series 1998-1, as Issuer, and
Bankers Trust Company of California, N.A., as Indenture Trustee, which is
incorporated by referenced herein. All other capitalized terms used herein shall
have the meanings specified herein.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Trust Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Trust Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Trust Agreement or in any such certificate or other document,
and accounting terms partly defined in this Trust Agreement or in any such
certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting
principles. To the extent that the definitions of accounting terms in this Trust
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under generally accepted accounting principles, the
definitions contained in this Trust Agreement or in any such certificate or
other document shall control.
(c) The words "hereof," "herein," "hereunder" and words of similar
import when used in this Trust Agreement shall refer to this Trust Agreement as
a whole and not to any particular provision of this Trust Agreement; Article,
Section and Exhibit references contained in this Trust Agreement are references
to Articles, Sections and Exhibits in or to this Trust
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Agreement unless otherwise specified; and the term "including" shall mean
"including without limitation".
(d) The definitions contained in this Trust Agreement are applicable to
the singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
ARTICLE II
Organization
Section 2.01. Name. The trust created hereby (the "Trust") shall be known
as "PacificAmerica Home Equity Loan Trust Series 1998-1", in which name the
Owner Trustee may conduct the business of the Trust, make and execute contracts
and other instruments on behalf of the Trust and xxx and be sued.
Section 2.02. Office. The office of the Trust shall be in care of the
Owner Trustee at the Corporate Trust Office or at such other address in Delaware
as the Owner Trustee may designate by written notice to the Certificateholders
and the Company.
Section 2.03. Purposes and Powers. The purpose of the Trust is to engage
in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Trust Agreement and to sell the Notes and
the Certificates;
(ii) with the proceeds of the sale of the Notes and the
Certificates, to pay the organizational, start-up and transactional
expenses of the Trust;
(iii) to purchase, hold, assign, grant, transfer, pledge and convey
the Mortgage Loans pursuant to the Indenture and to hold, manage and
distribute to the Certificateholders pursuant to Section 5.01 any portion
of the Owner Trust Estate (as defined herein) 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;
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(v) if directed by holders of Certificates representing more than
50% of the beneficial interests in the Trust, sell the Trust Estate
subsequent to the discharge of the Indenture, all for the benefit of the
holders of the Certificates;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Owner Trust Estate and the making of distributions to the
Certificateholder and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Trust Agreement or the
Basic Documents.
Section 2.04. Appointment of Owner Trustee. The Company hereby appoints
the Owner Trustee as trustee of the Trust effective as of the date hereof, to
have all the rights, powers and duties set forth herein.
Section 2.05. Initial Capital Contribution of Owner Trust Estate. The
Company hereby sells, assigns, transfers, conveys and sets over to the Trust, as
of the date hereof, the sum of $1. The Owner Trustee hereby acknowledges receipt
in trust from the Company, as of the date hereof, of the foregoing contribution,
which shall constitute the initial corpus of the Trust and shall be deposited in
the Certificate Distribution Account. The Owner Trustee also acknowledges on
behalf of the Trust the receipt in trust of the Mortgage Loans and the rights
with respect to the representations and warranties made by the Seller under the
Home Equity Loan Purchase Agreement and all other amounts constituting part of
the Trust Estate (such items plus all other amounts or items included in the
Trust Estate from time to time, the "Owner Trust Estate").
Section 2.06. Declaration of Trust. The Owner Trustee hereby declares that
it shall hold the Owner Trust Estate in trust upon and subject to the conditions
set forth herein for the use and benefit of the Certificateholders, subject to
the obligations of the Trust under the Basic Documents. It is the intention of
the parties hereto that the Trust constitute a "business trust" under the
Business Trust Statute and that this Trust Agreement constitute the governing
instrument of such business trust. It is the intention of the parties hereto
that, for federal and state income and state and local franchise tax purposes,
the Trust shall not be treated as (i) an association subject separately to
taxation as a corporation, (ii) a "publicly traded partnership" as defined in
Treasury Regulation Section 1.7704-1 or (iii) a "taxable mortgage pool" as
defined in Section 7701(i) of the Code, and that the Notes shall be debt, and
the provisions of this Trust Agreement shall be interpreted to further this
intention. Except as otherwise provided in this Trust Agreement, the rights of
the Certificateholders will be those of equity owners of the Trust. Effective as
of the date hereof, the Owner Trustee shall have all rights, powers and duties
set forth herein and in the Business Trust Statute with respect to accomplishing
the purposes of the Trust.
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Section 2.07. Liability of the Holders of the Certificates. The Holders of
the Certificates shall be jointly and severally liable directly to and shall
indemnify the Trust and the Owner Trustee for all losses, claims, damages,
liabilities and expenses of the Trust and the Owner Trustee (including Expenses,
to the extent not paid by the Master Servicer pursuant to Section 2.11 or out of
the Owner Trust Estate); provided, however, that the Holders of the Certificates
shall not be liable for payments required to be made on the Notes or the
Certificates, or for any losses incurred by a Certificateholder in the capacity
of an investor in the Certificates or a Noteholder in the capacity of an
investor in the Notes. The Holders of the Certificates shall be liable for and
shall promptly pay any entity level taxes imposed on the Trust. In addition, any
third party creditors of the Trust, including the Note Insurer (other than in
connection with the obligations described in the second preceding sentence for
which the Holders of the Certificates shall not be liable) shall be deemed third
party beneficiaries of this paragraph. The obligations of the Holders of the
Certificates under this paragraph shall be evidenced by the Certificates.
Section 2.08. Title to Trust Property. Except with respect to the Mortgage
Loans, which will be assigned of record to the Indenture Trustee pursuant to the
Indenture, legal title to the Owner Trust Estate shall be vested at all times in
the Trust as a separate legal entity except where applicable law in any
jurisdiction requires title to any part of the Owner Trust Estate to be vested
in a trustee or trustees, in which case title shall be deemed to be vested in
the Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
Section 2.09. Situs of Trust. The Trust will be located and administered
in the State of Delaware. All bank accounts maintained by the Owner Trustee on
behalf of the Trust shall be located in the State of Delaware. The Trust shall
not have any employees in any state other than Delaware; provided, however, that
nothing herein shall restrict or prohibit the Owner Trustee from having
employees within or without the State of Delaware or taking actions outside the
State of Delaware in order to comply with Section 2.03. Payments will be
received by the Trust only in Delaware or New York, and payments will be made by
the Trust only from Delaware or New York. The only office of the Trust will be
at the Corporate Trust Office in Delaware.
Section 2.10. Representations and Warranties of the Company. The Company
hereby represents and warrants to the Owner Trustee and the Note Insurer that:
(i) The Company is duly organized and validly existing as a
corporation in good standing under the laws of the State of Delaware, 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 its
property or the conduct of its business shall require such qualifications
and in which the failure to so qualify would have a material adverse
effect on the business, properties, assets or condition (financial or
other) of the Company.
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(iii) The Company has the power and authority to execute and deliver
this Trust Agreement and to carry out its terms; the Company has full
power and authority to convey and assign the property to be conveyed and
assigned to and deposited with the Trust as part of the Owner Trust Estate
and the Company has duly authorized such conveyance and assignment and
deposit to the Trust by all necessary corporate action; and the execution,
delivery and performance of this Trust Agreement have been duly authorized
by the Company by all necessary corporate action.
(iv) The consummation of the transactions contemplated by this
Trust Agreement and the fulfillment of the terms hereof do not conflict
with, result in any breach of any of the terms and provisions of, or
constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or bylaws of the 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) The Trust is not required to register as an investment company
under the Investment Company Act and is not under the control of a Person
required to so register.
(vi) There is no action, proceeding or investigation by or before
any court, governmental or administrative agency or arbitrator pending or,
to the Company's knowledge, threatened, which would prohibit its entering
into or performing its obligations under this Trust Agreement.
Section 2.11. Payment of Trust Fees. The Owner Trustee Fee shall be paid
pursuant to Section 3.05 of the Indenture. In addition, the Master Servicer
shall pay the Trust's expenses (including expenses of the Owner Trustee and the
Indenture Trustee) incurred with respect to the performance of the Trust's
duties under the Indenture pursuant to Section 5.06 of the Servicing Agreement,
or, if such amounts are insufficient, the Owner Trustee shall be paid pursuant
to Section 5.01 hereof.
Section 2.12. Investment Company. Neither the Company nor any holder of a
Certificate shall take any action which would cause the Trust to become an
"investment company" which would be required to register under the Investment
Company Act.
Section 2.13. Federal Income Tax Allocations. Net income for the Trust for
any month, as determined for federal income tax purposes (and each item of
income, gain, loss and deduction entering into the computation thereof), shall
be allocated to the Certificateholders, pro rata.
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ARTICLE III
Conveyance of the Mortgage Loans;
Certificates
Section 3.01. Conveyance of the Mortgage Loans. The Company, concurrently
with the execution and delivery hereof, does hereby Grant to the Trust, on
behalf of the Holders of the Notes and the Certificates and the Note Insurer,
without recourse, all its right, title and interest in and to the Mortgage
Loans, including all interest and principal received on or with respect to the
Mortgage Loans after the Cut-Off Date (other than payments of principal and
interest due on the Mortgage Loans on or before the Cut-Off Date). In addition,
the Company hereby Grants to the Trust all of its right, title, and interest in,
to, and under the Home Equity Loan Purchase Agreement to the extent of the
Mortgage Loans.
The conveyance of the Mortgage Loans by the Company to the Trust hereunder
is intended to facilitate the simultaneous issuance of the Notes under the
Indenture and issuance of the Certificates hereunder. The parties hereto intend
that the conveyance of the Mortgage Loans by the Company to the Trust hereunder
constitute a sale by the Company to the Trust of all of the Company's right,
title and interest in and to the Mortgage Loans. However, if the transactions
contemplated by this Trust Agreement are determined to constitute a financing,
the Company hereby Grants to the Trust a security interest in the Owner Trust
Estate and all distributions thereon and proceeds thereof, and this Trust
Agreement shall constitute a security agreement under applicable law, and in
such event, the parties hereto acknowledge that the Indenture Trustee, in
addition to holding the Mortgage Loans for the benefit of the Noteholders and
the Note Insurer, holds the Mortgage Loans as designee of the Trust.
Section 3.02. Initial Ownership. Upon the formation of the Trust by the
contribution by the Company pursuant to Section 2.05 and until the conveyance of
the Mortgage Loans pursuant to Section 3.01 and the issuance of the
Certificates, and thereafter except as otherwise permitted hereunder, the
Company shall be the sole Certificateholder.
Section 3.03. The Certificates. The Certificates shall be issued in the
form of one or more Certificates each representing not less than a 10%
Certificate Percentage Interest. The Certificates shall initially be registered
in the name of PacificAmerica Money Center, Inc. The Certificates shall be
executed on behalf of the Trust by manual or facsimile signature of an
authorized officer of the Owner Trustee and authenticated in the manner provided
in Section 3.04. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures shall have been affixed,
authorized to sign on behalf of the Trust, shall be validly issued and entitled
to the benefit of this Trust Agreement, notwithstanding that such individuals or
any of them shall have ceased to be so authorized prior to the authentication
and delivery of such Certificates or did not hold such offices at the date of
authentication and delivery of such Certificates. A Person shall become a
Certificateholder and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder upon such Person's acceptance of a
Certificate duly registered in such Person's name, pursuant to Section 3.05.
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A transferee of a Certificate shall become a Certificateholder and shall
be entitled to the rights and subject to the obligations of a Certificateholder
hereunder upon such transferee's acceptance of a Certificate duly registered in
such transferee's name pursuant to and upon satisfaction of the conditions set
forth in Section 3.05.
Section 3.04. Authentication of Certificates. The Owner Trustee shall
cause all Certificates issued hereunder to be executed and authenticated on
behalf of the Trust, authenticated and delivered to or upon the written order of
the Company, signed by its chairman of the board, its president or any vice
president, without further corporate action by the Company, in authorized
denominations. No Certificate shall entitle its holder to any benefit under this
Trust Agreement or be valid for any purpose unless there shall appear on such
Certificate a certificate of authen tication substantially in the form set forth
in Exhibit A, executed by the Owner Trustee or the Certificate Registrar by
manual signature; such authentication shall constitute conclusive evidence that
such Certificate shall have been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
Section 3.05. Registration of and Limitations on Transfer and Exchange of
Certificates. The Certificate Registrar shall keep or cause to be kept, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Bankers Trust Company of California, N.A. shall be the initial Certificate
Registrar. If the Certificate Registrar resigns or is removed, the Owner Trustee
shall appoint a successor Certificate Registrar.
Subject to satisfaction of the conditions set forth below with respect to
the Certificate, upon surrender for registration of transfer of any Certificate
at the office or agency maintained pursuant to Section 3.09, the Owner Trustee
or the Certificate Registrar shall execute, authenticate and deliver in the name
of the designated transferee or transferees, one or more new Certificates in
authorized denominations of a like aggregate amount dated the date of
authentication by the Owner Trustee or the Certificate Registrar. At the option
of a Holder, Certificates may be exchanged for other Certificates of authorized
denominations of a like aggregate amount upon surrender of the Certificates to
be exchanged at the office or agency maintained pursuant to Section 3.09.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Certificate Registrar duly executed by the Holder or such
Holder's attorney duly authorized in writing. Each Certificate surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Certificate Registrar in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
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No Person shall become a Certificateholder until it shall establish its
non-foreign status by submitting to the Certificate Paying Agent an IRS Form W-9
and the Certificate of Non-Foreign Status set forth in Exhibit F hereto.
No transfer, sale, pledge or other disposition of a Certificate shall be
made unless such transfer, sale, pledge or other disposition is exempt from the
registration requirements of the Securities Act and any applicable state
securities laws or is made in accordance with said Act and laws. In the event of
any such transfer, the Certificate Registrar or the Company shall prior to such
transfer require the transferee to execute (a) either (i) an investment letter
in substantially the form attached hereto as Exhibit C (or in such form and
substance reasonably satisfactory to the Certificate Registrar and the Company)
which investment letter shall not be an expense of the Trust, the Owner Trustee,
the Certificate Registrar, the Master Servicer, the Note Insurer or the Company
and which investment letter states that, among other things, such transferee (A)
is a "qualified institutional buyer" as defined under Rule 144A, acting for its
own account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A and (B) is aware that the proposed transferor intends to rely on
the exemption from registration requirements under the Securities Act of 1933,
as amended, provided by Rule 144A or (ii) (A) a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Certificate
Registrar, the Company and the Note Insurer that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from said Act and laws or is being made pursuant to said Act and laws,
which Opinion of Counsel shall not be an expense of the Trust, the Owner
Trustee, the Certificate Registrar, the Master Servicer, the Note Insurer or the
Company and (B) the transferee executes a representation letter, substantially
in the form of Exhibit D hereto, and the transferor executes a representation
letter, substantially in the form of Exhibit E hereto, each acceptable to and in
form and substance satisfactory to the Certificate Registrar and the Company
certifying the facts surrounding such transfer, which representation letters
shall not be an expense of the Trust, the Owner Trustee, the Certificate
Registrar, the Master Servicer, the Note Insurer or the Company and (b) the
Certificate of Non-Foreign Status (in substantially the form attached hereto as
Exhibit F) acceptable to and in form and substance reasonably satisfactory to
the Certificate Registrar and the Company, which certificate shall not be an
expense of the Trust, the Owner Trustee, the Certificate Registrar, the Master
Servicer, the Note Insurer or the Company. If the Certificateholder is unable to
provide a Certificate of Non-Foreign Status, the Certificateholder must provide
an Opinion of Counsel as described above in this paragraph. The
Certificateholder desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trust, the Owner Trustee, the Certificate Registrar, the
Master Servicer, the Note Insurer and the Company against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws. Neither an Opinion of Counsel nor a certification set
forth in clause (a) of this paragraph will be required in connection with the
initial transfer of any such Certificate by the Company to PacificAmerica Money
Center, Inc. or by the pledge of any such Certificate by PacificAmerica Money
Center, Inc. to Xxxxxxx Xxxxx Mortgage Capital, Inc. ("MLMCI") and the
certification set forth in clause (b) of this paragraph will not be required in
connection with the pledge of any such Certificate by PacificAmerica Money
Center, Inc. to MLMCI.
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No transfer of a Certificate or any interest therein shall be made to any
employee benefit plan or certain other retirement plans and arrangements,
including individual retirement accounts and annuities, Xxxxx plans and bank
collective investment funds and insurance company general or separate accounts
in which such plans, accounts or arrangements are invested, that are subject to
ERISA, or Section 4975 of the Code (collectively, "Plan"), any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with "plan assets" of a Plan within the meaning of the Department
of Labor regulation promulgated at 29 C.F.R. Section 2510.3-101 ("Plan Assets")
unless the Company, the Owner Trustee, the Certificate Registrar and the Master
Servicer are provided with an Opinion of Counsel which establishes to the
satisfaction of the Company, the Owner Trustee, the Certificate Registrar and
the Master Servicer that the purchase of Certificates is permissible under
applicable law, will not constitute or result in any prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Company, the
Owner Trustee, the Certificate Registrar or the Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in this Trust
Agreement, which Opinion of Counsel shall not be an expense of the Company, the
Owner Trustee, the Certificate Registrar, the Note Insurer or the Master
Servicer. In lieu of such Opinion of Counsel, a Plan, any Person acting,
directly or indirectly, on behalf of any such Plan or any Person acquiring such
Certificates with Plan Assets of a Plan may provide a certification in the form
of Exhibit G to this Trust Agreement, which the Company, the Owner Trustee, the
Certificate Registrar and the Master Servicer may rely upon without further
inquiry or investigation. Neither an Opinion of Counsel nor a certification will
be required in connection with the initial transfer or pledge of any such
Certificate by the Company to an affiliate of the Company (in which case, the
Company or any affiliate thereof shall have deemed to have represented that such
affiliate is not a Plan or a Person investing Plan Assets of any Plan) and the
Owner Trustee shall be entitled to conclusively rely upon a representation
(which, upon the request of the Owner Trustee, shall be a written
representation) from the Company of the status of such transferee as an
affiliate of the Company.
In addition, no transfer, sale, assignment, pledge or other disposition of
a Certificate shall be made unless the proposed transferee executes a
representation letter substantially in the form of Exhibit D, or substantially
in the form of Exhibit H hereto, that (1) the transferee is acquiring the
Certificate for its own behalf and is not acting as agent or custodian for any
other person or entity in connection with such acquisition and (2) if the
transferee is a partnership, grantor trust or S corporation for federal income
tax purposes, the Certificates are not more than 50% of the assets of the
partnership, grantor trust or S corporation.
No offer, sale, transfer, pledge, hypothecation or other disposition
(including any pledge, sale or transfer under a repurchase transaction or
securities loan) of any Certificate shall be made to any transferee unless,
prior to such disposition, the proposed transferor delivers to the Owner Trustee
an Opinion of Counsel, rendered by a law firm generally recognized to be
qualified to opine concerning the tax aspects of asset securitization, to the
effect that such transfer (including any disposition permitted following any
default under any pledge or repurchase transaction) will not cause the Trust to
be (i) treated as an association taxable as a corporation for federal income tax
purposes, (ii) taxable as a taxable mortgage pool as defined in Section 7701(i)
of the Code or
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(iii) taxable as a "publicly traded partnership" as defined in Treasury
Regulation section 1.7704-1. Notwithstanding the foregoing, the provisions of
this paragraph shall not apply to the initial transfer of the Certificates by
the Company to PacificAmerica Money Center, Inc.
Section 3.06. Mutilated, Destroyed, Lost or Stolen Certificates. If (a)
any mutilated Certificate shall be surrendered to the Certificate Registrar, or
if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to the Certificate Registrar and the Owner Trustee such security or indemnity as
may be required by them to save each of them harmless, then in the absence of
notice to the Certificate Registrar or the Owner Trustee that such Certificate
has been acquired by a bona fide purchaser, the Owner Trustee or the Certificate
Registrar shall execute on behalf of the Trust and the Owner Trustee or the
Certificate Registrar, shall authenticate and deliver, in exchange for or in
lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and denomination. In connection with the issuance of
any new Certificate under this Section 3.06, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
expenses of the Owner Trustee or the Certificate Registrar (including fees and
expenses of counsel) and any tax or other governmental charge that may be
imposed in connection therewith. Any duplicate Certificate issued pursuant to
this Section 3.06 shall constitute conclusive evidence of ownership in the
Trust, as if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 3.07. Persons Deemed Certificateholders. Prior to due presentation
of a Certificate for registration of transfer, the Owner Trustee, the
Certificate Registrar or any Certificate Paying Agent may treat the Person in
whose name any Certificate is registered in the Certificate Register as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 5.02 and for all other purposes whatsoever, and none of the Trust, the
Owner Trustee, the Certificate Registrar or any Paying Agent shall be bound by
any notice to the contrary.
Section 3.08. Access to List of Certificateholders' Names and Addresses.
The Certificate Registrar shall furnish or cause to be furnished to the Company
or the Owner Trustee, within 15 days after receipt by the Certificate Registrar
of a written request therefor from the Company or the Owner Trustee, a list, in
such form as the Company or the Owner Trustee, as the case may be, may
reasonably require, of the names and addresses of the Certificateholders as of
the most recent Record Date. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Trust, the
Company, the Certificate Registrar or the Owner Trustee accountable by reason of
the disclosure of its name and address, regardless of the source from which such
information was derived.
Section 3.09. Maintenance of Office or Agency. The Owner Trustee on behalf
of the Trust, shall maintain in Wilmington, Delaware, an office or offices or
agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Owner Trustee
in respect of the Certificates and the Basic Documents may be served. The Owner
Trustee initially designates the Corporate Trust Office as its office for such
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purposes. The Owner Trustee shall give prompt written notice to the Company and
the Certif icateholders of any change in the location of the Certificate
Register or any such office or agency.
Section 3.10. Certificate Paying Agent. (a) The Certificate Paying Agent
shall make distributions to Certificateholders from the Certificate Distribution
Account on behalf of the Trust in accordance with the provisions of the
Certificates and Section 5.01 hereof from payments remitted to the Certificate
Paying Agent by the Indenture Trustee pursuant to Section 3.05 of the Indenture.
The Trust hereby appoints Bankers Trust Company of California, N.A. as
Certificate Paying Agent and Bankers Trust Company of California, N.A. hereby
accepts such appointment and further agrees that it will be bound by the
provisions of this Trust Agreement relating to the Certificate Paying Agent and
shall:
(i) hold all sums held by it for the payment of amounts due with
respect to the Certificates in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(ii) give the Owner Trustee notice of any default by the Trust of
which it has actual knowledge in the making of any payment required to be
made with respect to the Certificates;
(iii) at any time during the continuance of any such default, upon
the written request of the Owner Trustee forthwith pay to the Owner
Trustee on behalf of the Trust all sums so held in Trust by such
Certificate Paying Agent;
(iv) immediately resign as Certificate Paying Agent and forthwith
pay to the Owner Trustee on behalf of the Trust all sums held by it in
trust for the payment of Certificates if at any time it ceases to meet the
standards under this Section 3.10 required to be met by the Certificate
Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Certificates of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith;
(vi) deliver to the Owner Trustee a copy of the report to
Certificateholders; and
(vii) not institute bankruptcy proceedings against the Issuer in
connection with this Trust Agreement.
(b) The Trust may revoke such power and remove the Certificate Paying
Agent if it determines in its sole discretion that the Certificate Paying Agent
shall have failed to perform its obligations under this Trust Agreement in any
material respect. Bankers Trust Company of California, N.A. shall be permitted
to resign as Certificate Paying Agent upon 30 days written notice to the Owner
Trustee and the Note Insurer; provided Bankers Trust Company of California,
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N.A. is also resigning as Paying Agent under the Indenture at such time. In the
event that Bankers Trust Company of California, N.A. shall no longer be the
Certificate Paying Agent under this Trust Agreement and Paying Agent under the
Indenture, the Owner Trustee shall appoint a successor to act as Certificate
Paying Agent (which shall be a bank or trust company) and which shall also be
the successor Paying Agent under the Indenture. The Owner Trustee shall cause
such successor Certificate Paying Agent or any additional Certificate Paying
Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee
an instrument accepting the terms of this Section 3.10 as it relates to the
Certificate Paying Agent. The Certificate Paying Agent shall return all
unclaimed funds to the Trust and upon removal of a Certificate Paying Agent such
Certificate Paying Agent shall also return all funds in its possession to the
Trust. The provisions of Sections 6.01, 6.03, 6.04 and 7.01 shall apply to the
Certificate Paying Agent to the extent applicable. Any reference in this Trust
Agreement to the Certificate Paying Agent shall include any co-paying agent
unless the context requires otherwise.
(c) The Certificate Paying Agent shall establish and maintain with
itself a trust account (the "Certificate Distribution Account") in which the
Certificate Paying Agent shall deposit, on the same day as it is received from
the Indenture Trustee, each remittance received by the Certificate Paying Agent
with respect to payments made pursuant to the Indenture. The Certificate Paying
Agent shall make all distributions to Certificates, from moneys on deposit in
the Certificate Distribution Account.
ARTICLE IV
Authority and Duties of Owner Trustee
Section 4.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver the Basic Documents to which the Trust is to be
a party and each certificate or other document attached as an exhibit to or
contemplated by the Basic Documents to which the Trust is to be a party and any
amendment or other agreement or instrument described herein, as evidenced
conclusively by the Owner Trustee's execution thereof. In addition to the
foregoing, the Owner Trustee is authorized, but shall not be obligated, except
as otherwise provided in this Trust Agreement, to take all actions required of
the Trust pursuant to the Basic Documents.
Section 4.02. General Duties. It shall be the duty of the Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Trust Agreement and the Basic Documents to which the Trust is
a party and to administer the Trust in the interest of the Certificateholders,
subject to the Basic Documents and in accordance with the provisions of this
Trust Agreement.
Section 4.03. Action upon Instruction. (a) Subject to this Article IV and
in accordance with the terms of the Basic Documents, the Certificateholders may
by written instruction direct the Owner Trustee in the management of the Trust.
Such direction may be exercised at any time by written instruction of the
Certificateholders pursuant to this Article IV.
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(b) Notwithstanding the foregoing, the Owner Trustee shall not be
required to take any action hereunder or under any Basic Document if the Owner
Trustee shall have reasonably determined, or shall have been advised by counsel,
that such action is likely to result in liability on the part of the Owner
Trustee or is contrary to the terms hereof or of any Basic Document or is
otherwise contrary to law.
(c) Whenever the Owner Trustee is required to decide between alternative
courses of action permitted or required by the terms of this Trust Agreement or
under any Basic Document, or in the event that the Owner Trustee is unsure as to
the application of any provision of this Trust Agreement or any Basic Document
or any such provision is ambiguous as to its application, or is, or appears to
be, in conflict with any other applicable provision, or in the event that this
Trust Agreement permits any determination by the Owner Trustee or is silent or
is incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Certificateholders (with a copy to the Note Insurer) requesting instruction
as to the course of action to be adopted, and to the extent the Owner Trustee
acts in good faith in accordance with any written instruction of the
Certificateholders (with the consent of the Note Insurer), the Owner Trustee
shall not be liable on account of such action to any Person. If the Owner
Trustee shall not have received appropriate instruction within 10 days of such
notice (or within such shorter period of time as reasonably may be specified in
such notice or may be necessary under the circumstances) it may, but shall be
under no duty to, take or refrain from taking such action not inconsistent with
this Trust Agreement or the Basic Documents, as it shall deem to be in the best
interests of the Certificateholders, the Noteholders and the Note Insurer, and
the Owner Trustee shall have no liability to any Person for such action or
inaction.
Section 4.04. No Duties Except as Specified under Specified Documents or
in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided (a) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Trust Agreement, (b) in accordance with the Basic
Documents and (c) in accordance with any document or instruction delivered to
the Owner Trustee pursuant to Section 4.03; and no implied duties or obligations
shall be read into this Trust Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility (i) to file any
financing or continuation statement in any public office at any time, (ii) to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder, (iii) to record this Trust Agreement or any Basic
Document or (iv) to prepare or file any Securities and Exchange Commission
filing for the Trust, provided, that if necessary, the Owner Trustee will
execute any documents required to effectuate such filings. The Owner Trustee
nevertheless agrees that it will, at its own cost and expense, promptly take all
action as may be necessary to discharge any liens on any part of the Owner Trust
Estate that result from actions by, or claims against, the Owner Trustee that
are not related to the ownership or the administration of the Owner Trust
Estate.
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Section 4.05. Restrictions. (a) The Owner Trustee or the Company (or an
Affiliate thereof) shall not take any action (i) that is inconsistent with the
purposes of the Trust set forth in Section 2.03 or (ii) that, to the actual
knowledge of the Owner Trustee based on an Opinion of Counsel rendered by a law
firm generally recognized to be qualified to opine concerning the tax aspects of
asset securitization, would result in the Trust becoming taxable as a
corporation for federal income tax purposes or (iii) would result in the
amendment or modification of the Basic Documents or this Trust Agreement without
the prior written consent of the Note Insurer. The Certificateholders shall not
direct the Owner Trustee to take action that would violate the provisions of
this Section 4.05.
(b) The Owner Trustee shall not convey or transfer any of the Trust's
properties or assets, including those included in the Trust Estate, to any
person unless (i) it shall have received an Opinion of Counsel rendered by a law
firm generally recognized to be qualified to opine concerning the tax aspects of
asset securitization to the effect that such transaction will not have any
material adverse tax consequence to the Trust or any Certificateholder and (ii)
such conveyance or transfer shall not violate the provisions of Section 3.16(b)
of the Indenture.
(c) The Trust shall not commingle its assets with those of any other
entity. The Trust shall maintain its financial and accounting books and records
separate from those of any other entity. Except as expressly set forth herein,
the Trust shall pay its indebtedness, operating expenses and liabilities from
its own funds, and the Trust shall not pay the indebtedness, operating expenses
and liabilities of any other entity. The Trust shall maintain appropriate
minutes or other records of all appropriate actions and shall maintain its
office separate from the offices of the Company.
Section 4.06. Prior Notice to Certificateholders with Respect to Certain
Matters. With respect to the following matters, the Owner Trustee shall not take
action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders and the Note Insurer in
writing of the proposed action and the Certificateholders and the Note Insurer
shall not have notified the Owner Trustee in writing prior to the 30th day after
such notice is given that such Certificateholders and the Note Insurer have
withheld consent or provided alternative direction (provided, however, that any
direction by the Certificateholders shall require the prior consent of the Note
Insurer):
(a) the initiation of any claim or lawsuit by the Trust (except claims
or lawsuits brought in connection with the collection of cash distributions due
and owing under the Mortgage Loans) and the compromise of any action, claim or
lawsuit brought by or against the Trust (except with respect to the
aforementioned claims or lawsuits for collection of cash distributions due and
owing under the Mortgage Loans);
(b) the election by the Trust to file an amendment to the Certificate of
Trust (unless such amendment is required to be filed under the Business Trust
Statute);
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(c) the amendment or other change to this Trust Agreement or any Basic
Document in circumstances where the consent of any Noteholder or the Note
Insurer is required;
(d) the amendment or other change to this Trust Agreement or any Basic
Document in circumstances where the consent of any Noteholder or the Note
Insurer is not required and such amendment materially adversely affects the
interest of the Certificateholders;
(e) the appointment pursuant to the Indenture of a successor Note
Registrar, Paying Agent or Indenture Trustee or, pursuant to this Trust
Agreement, of a successor Certificate Registrar or Certificate Paying Agent or
the consent to the assignment by the Note Registrar, Paying Agent, Indenture
Trustee, Certificate Registrar or Certificate Paying Agent of its obligations
under the Indenture or this Trust Agreement, as applicable;
(f) the consent to the calling or waiver of any default under any Basic
Document;
(g) the consent to the assignment by the Indenture Trustee or Master
Servicer of their respective obligations under any Basic Document;
(h) except as provided in Article VIII hereof, dissolve, terminate or
liquidate the Trust in whole or in part;
(i) 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;
(j) cause the Trust to incur, assume or guaranty any indebtedness other
than as set forth in this Trust Agreement;
(k) perform any act that conflicts with any other Basic Document;
(l) perform any act which would make it impossible to carry on the
ordinary business of the Trust as described in Section 2.03 hereof;
(m) confess a judgment against the Trust;
(n) possess Trust assets or assign the Trust's right to property for
other than a Trust purpose;
(o) cause the Trust to lend any funds to any entity; or
(p) change the Trust's purpose and powers from those enumerated in this
Trust Agreement.
In addition the Trust shall not commingle its assets with those of any
other entity. The Trust shall maintain its financial and accounting books and
records separate from those of any
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other entity. Except as expressly set forth herein, the Trust shall pay its
indebtedness and any operating expenses from its own funds, and the Trust shall
not pay the indebtedness, operating expenses or liabilities of any other entity.
The Trust shall maintain appropriate minutes or other records of all appropriate
actions and shall maintain its office separate from the offices of the Seller
and the Master Servicer.
Section 4.07. Action by Certificateholders with Respect to Certain
Matters. The Owner Trustee shall not have the power, except upon the direction
of the Certificateholders, and with the consent of the Note Insurer, to (a)
remove or replace the Master Servicer under the Servicing Agreement pursuant to
Sections 6.01 and 6.02 thereof or to remove or replace the Indenture Trustee
under the Indenture pursuant to Section 6.08 thereof, (b) except as expressly
provided in the Basic Documents, sell the Mortgage Loans after the termination
of the Indenture, (c) institute proceedings to have the Trust declared or
adjudicated to be bankrupt or insolvent, (d) consent to the institution of
bankruptcy or insolvency proceedings against the Trust, (e) 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, (f) 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, (g) make any assignment for the benefit of the Trust's creditors, (h)
cause the Trust to admit in writing its inability to pay its debts generally as
they become due, (i) take any action or cause the Trust to take any action, in
furtherance of any of the foregoing clauses (c) through (i) (any of such
clauses, a "Bankruptcy Action"). So long as the Indenture and the Insurance
Agreement remain in effect and no Note Insurer Default exists, no
Certificateholder shall have the power to take, and shall not take, any
Bankruptcy Action with respect to the Trust or the Company or direct the Owner
Trustee to take any Bankruptcy Action with respect to the Trust or the Company.
The Owner Trustee shall take the actions referred to in the preceding sentence
only upon written instructions signed by the Certificateholders and with the
consent of the Note Insurer.
Section 4.08. Action by Certificateholders with Respect to Bankruptcy. The
Owner Trustee shall not have the power to commence a voluntary proceeding in
bankruptcy relating to the Trust without the unanimous prior approval of all
Certificateholders and the consent of the Note Insurer, the Noteholders and the
Owner Trustee and the delivery to the Owner Trustee by each such
Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent. This paragraph shall survive
for one year and one day following termination of this Trust Agreement.
Section 4.09. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or to refrain from
taking any action if such action or inaction would be contrary to any obligation
of the Trust or the Owner Trustee under this Trust Agreement or any of the Basic
Documents or would be contrary to Section 2.03, nor shall the Owner Trustee be
obligated to follow any such direction, if given.
Section 4.10. Majority Control. Except as expressly provided herein, any
action that may be taken by the Certificateholders under this Trust Agreement
may be taken by the Holders of
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Certificates evidencing not less than a majority of the outstanding Certificate
Percentage Interests of the Certificates. Except as expressly provided herein,
any written notice of the Certificateholders delivered pursuant to this Trust
Agreement shall be effective if signed by Holders of Certificates evidencing not
less than a majority of the outstanding Certificate Principal Balance of the
Certificates at the time of the delivery of such notice.
ARTICLE V
Application of Trust Funds
Section 5.01. Distributions. (a) On each Payment Date, the Certificate
Paying Agent shall distribute to the Certificateholders, on a pro rata basis
based on the Certificate Percentage Interests thereof, all funds on deposit in
the Certificate Distribution Account and available therefor (as provided in
Section 3.05 of the Indenture) for such Payment Date as reduced by any amount
owing to the Owner Trustee hereunder and any Expenses of the Trust remaining
unpaid as evidenced by written notice thereof delivered to the Indenture Trustee
prior to the Determination Date.
(b) In the event that any withholding tax is imposed on the
distributions (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to such Certificateholder in
accordance with this Section 5.01. The Certificate Paying Agent is hereby
authorized and directed to retain or cause to be retained from amounts otherwise
distributable to the Certificateholders sufficient funds for the payment of any
tax that is legally owed by the Trust (but such authorization shall not prevent
the Owner Trustee from contesting any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome of
such proceedings). The amount of any withholding tax imposed with respect to a
Certificateholder shall be treated as cash distributed to such Certificateholder
at the time it is withheld by the Certificate Paying Agent and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Certificate Paying Agent may in its sole discretion
withhold such amounts in accordance with this paragraph (b).
(c) Distributions to Certificateholders shall be subordinated to the
creditors of the Trust, including the Noteholders and the Note Insurer.
Section 5.02. Method of Payment. Subject to Section 8.01(c), distributions
required to be made to Certificateholders on any Payment Date as provided in
Section 5.01 shall be made to each Certificateholder of record on the preceding
Record Date either by, in the case of any Certificateholder owning Certificates
having a Certificate Percentage Interest of 100%, wire transfer, in immediately
available funds, to the account of such Holder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have provided
to the Certificate Registrar appropriate written instructions at least five
Business Days prior to such
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Record Date or, if not, by check mailed to such Certificateholder at the address
of such Holder appearing in the Certificate Register.
Section 5.03. Tax Returns. The Indenture Trustee shall (a) maintain (or
cause to be maintained) the books of the Trust on a calendar year basis using
the accrual method of accounting, (b) deliver (or cause to be delivered) to each
Certificateholder as may be required by the Code and applicable Treasury
Regulations, such information as may be required to enable each
Certificateholder to prepare its federal and state income tax returns, (c)
prepare and file or cause to be prepared and filed such tax returns relating to
the Trust as may be required by the Code and applicable Treasury Regulations
(making such elections as may from time to time be required or appropriate under
any applicable state or federal statutes, rules or regulations) and (d) collect
or cause to be collected any withholding tax as described in and in accordance
with Section 5.01 of this Trust Agreement with respect to income or
distributions to Certificateholders and prepare or cause to be prepared the
appropriate forms relating thereto.
Section 5.04. Statements to Certificateholders. On each Payment Date, the
Certificate Paying Agent shall send to each Certificateholder the statement or
statements provided to the Owner Trustee and the Certificate Paying Agent by the
Indenture Trustee pursuant to Section 7.05 of the Indenture with respect to such
Payment Date.
ARTICLE VI
Concerning the Owner Trustee
Section 6.01. Acceptance of Trusts and Duties. The Owner Trustee accepts
the trusts hereby created and agrees to perform its duties hereunder with
respect to such trusts but only upon the terms of this Trust Agreement. Each of
the Owner Trustee and the Certificate Paying Agent also agrees to disburse all
moneys actually received by it constituting part of the Owner Trust Estate upon
the terms of the Basic Documents and this Trust Agreement. The Owner Trustee
shall not be answerable or accountable hereunder or under any Basic Document
under any circumstances, except (i) for its own willful misconduct, gross
negligence or bad faith or grossly negligent failure to act or (ii) in the case
of the inaccuracy of any representation or warranty contained in Section 6.03
expressly made by the Owner Trustee. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):
(a) The Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of the
Certificateholders permitted under this Trust Agreement;
(b) No provision of this Trust Agreement or any Basic Document shall
require the Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights, duties or powers
hereunder or under any Basic Document if the Owner Trustee
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shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured or
provided to it;
(c) Under no circumstances shall the Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(d) The Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Trust Agreement or for the due execution hereof
by the Company or for the form, character, genuineness, sufficiency, value or
validity of any of the Owner Trust Estate, or for or in respect of the validity
or sufficiency of the Basic Documents, the Notes, the Certificates, other than
the certificate of authentication on the Certificates, if executed by the Owner
Trustee and the Owner Trustee shall in no event assume or incur any liability,
duty, or obligation to any Noteholder or to any Certificateholder, other than as
expressly provided for herein or expressly agreed to in the Basic Documents;
(e) The Owner Trustee shall not be liable for the default or misconduct
of the Company, Indenture Trustee, Certificate Registrar or the Master Servicer
under any of the Basic Documents or otherwise and the Owner Trustee shall have
no obligation or liability to perform the obligations of the Trust under this
Trust Agreement or the Basic Documents that are required to be performed by the
Indenture Trustee under the Indenture or the Seller under the Home Equity Loan
Purchase Agreement; and
(f) The Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it or duties imposed by this Trust Agreement, or
to institute, conduct or defend any litigation under this Trust Agreement or
otherwise or in relation to this Trust Agreement or any Basic Document, at the
request, order or direction of any of the Certificateholders, unless such
Certificateholders have offered to the Owner Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner Trustee
to perform any discretionary act enumerated in this Trust Agreement or in any
Basic Document shall not be construed as a duty.
Section 6.02. Furnishing of Documents. The Owner Trustee shall furnish to
the Securityholders promptly upon receipt of a written reasonable request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Trust under the Basic Documents.
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Section 6.03. Representations and Warranties. The Owner Trustee, in its
individual capacity, hereby represents and warrants to the Company, for the
benefit of the Certificateholders and the Note Insurer that:
(a) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of Delaware. It has all requisite
corporate power and authority to execute, deliver and perform its obligations
under this Trust Agreement;
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Trust Agreement, and this Trust Agreement
will be executed and delivered by one of its officers who is duly authorized to
execute and deliver this Trust Agreement on its behalf;
(c) The execution, delivery, authentication and performance by it of
this Trust Agreement will not require the authorization, consent or approval of,
the giving of notice to, the filing or registration with, or the taking of any
other action with respect to, any governmental authority or agency;
(d) Neither the execution nor the delivery by it of this Trust
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or bylaws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound;
(e) This Trust Agreement, assuming due authorization, execution and
delivery by the Owner Trustee and the Company, constitutes a valid, legal and
binding obligation of the Owner Trustee, enforceable against it in accordance
with the terms hereof subject to applicable bankruptcy, insolvency,
reorganization, moratorium and other laws affecting the enforcement of
creditors' rights generally and to general principles of equity, regardless of
whether such enforcement is considered in a proceeding in equity or at law;
(f) The Owner Trustee is not in default with respect to any order or
decree of any court or any order, regulation or demand of any Federal, state,
municipal or governmental agency, which default might have consequences that
would materially and adversely affect the condition (financial or other) or
operations of the Owner Trustee or its properties or might have consequences
that would materially adversely affect its performance hereunder; and
(g) No litigation is pending or, to the best of the Owner Trustee's
knowledge, threatened against the Owner Trustee which would prohibit its
entering into this Trust Agreement or performing its obligations under this
Trust Agreement.
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Section 6.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall
incur no liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, Note, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a certified
copy of a resolution of the board of directors or other governing body of any
corporate party as conclusive evidence that such resolution has been duly
adopted by such body and that the same is in full force and effect. As to any
fact or matter the method of determination of which is not specifically
prescribed herein, the Owner Trustee may for all purposes hereof rely on a
certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter
and such certificate shall constitute full protection to the Owner Trustee for
any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the Trust hereunder and in the
performance of its duties and obligations under this Trust Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents,
attorneys, custodians or nominees (including persons acting under a power of
attorney) if such persons have been selected by the Owner Trustee with
reasonable care and (ii) may consult with counsel, accountants and other skilled
persons to be selected with reasonable care and employed by it. The Owner
Trustee shall not be liable for anything done, suffered or omitted in good faith
by it in accordance with the written opinion or advice of any such counsel,
accountants or other such Persons and not contrary to this Trust Agreement or
any Basic Document.
Section 6.05. Not Acting in Individual Capacity. Except as provided in
this Article VI, in accepting the trusts hereby created Wilmington Trust Company
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Trust Agreement or any Basic Document shall
look only to the Owner Trust Estate for payment or satisfaction thereof.
Section 6.06. Owner Trustee Not Liable for Certificates or Related
Documents. The recitals contained herein and in the Certificates (other than the
signatures of the Owner Trustee on the Certificates) shall be taken as the
statements of the 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 Trust Agreement, of any Basic Document or of the
Certificates (other than the signatures of the Owner Trustee on the
Certificates) or the Notes, or of any Related Documents. The Owner Trustee shall
at no time have any responsibility or liability with respect to the sufficiency
of the Owner Trust Estate or its ability to generate the payments to be
distributed to Certificateholders under this Trust Agreement or the Noteholders
under the Indenture, including compliance by the Company or the Seller with any
warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation, or any action
of the Certificate Paying Agent, the Certificate Registrar or the Indenture
Trustee taken in the name of the Owner Trustee.
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Section 6.07. Owner Trustee May Own Certificates and Notes. The Owner
Trustee in its individual or any other capacity may, subject to Section 3.05,
become the owner or pledgee of Certificates or Notes and may deal with the
Company, the Seller, the Certificate Paying Agent, the Certificate Registrar and
the Indenture Trustee in transactions with the same rights as it would have if
it were not Owner Trustee.
Section 6.08. Payments from Owner Trust Estate. All payments to be made by
the Owner Trustee under this Trust Agreement or any of the Basic Documents to
which the Owner Trustee is a party shall be made only from the income and
proceeds of the Owner Trust Estate or from other amounts required to be provided
by the Certificateholders and only to the extent that the Owner Trust shall have
received income or proceeds from the Owner Trust Estate or the
Certificateholders to make such payments in accordance with the terms hereof.
Wilmington Trust Company, in its individual capacity, shall not be liable for
any amounts payable under this Trust Agreement or any of the Basic Documents to
which the Owner Trustee is a party.
Section 6.09. Doing Business in Other Jurisdictions. Notwithstanding
anything contained herein to the contrary, neither Wilmington Trust Company nor
the Owner Trustee shall be required to take any action in any jurisdiction other
than in the State of Delaware if the taking of such action will, even after the
appointment of a co-trustee or separate trustee in accordance with Section 9.05
hereof, (i) require the consent or approval or authorization or order of or the
giving of notice to, or the registration with or the taking of any other action
in respect of, any state or other governmental authority or agency of any
jurisdiction other than the State of Delaware; (ii) result in any fee, tax or
other governmental charge under the laws of the State of Delaware becoming
payable by Wilmington Trust Company; or (iii) subject Wilmington Trust Company
to personal jurisdiction in any jurisdiction other than the State of Delaware
for causes of action arising from acts unrelated to the consummation of the
transactions by Wilmington Trust Company or the Owner Trustee, as the case may
be, contemplated hereby.
Section 6.10. Liability of Certificate Registrar and Certificate Paying
Agent. All provisions of this Trust Agreement affording protection to or
limiting the liability of the Owner Trustee shall inure as well to the
Certificate Registrar and Certificate Paying Agent. Such protection shall
survive the termination of this Trust Agreement and the resignation or removal
of either the Certificate Registrar or Certificate Paying Agent.
ARTICLE VII
Compensation of Owner Trustee
Section 7.01. Owner Trustee's Fees and Expenses. The Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon before the date hereof and as set forth in Appendix A to
the Indenture, and the Owner Trustee shall be reimbursed by the Trust Estate
pursuant to Section 3.05(a) of the Indenture for its reasonable expenses
hereunder and under the Basic Documents, including the reasonable compensation,
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expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may reasonably employ in connection with the exercise and
performance of its rights and its duties hereunder and under the Basic
Documents. The amount of the Owner Trustee Fee shall be paid to the Owner
Trustee pursuant to Section 3.05 of the Indenture.
Section 7.02. Indemnification. The Master Servicer shall indemnify, defend
and hold harmless the Owner Trustee and its 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 Trust Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, provided, that:
(i) the Master Servicer shall not be liable for or required to
indemnify an Indemnified Party from and against Expenses arising or
resulting from the Owner Trustee's willful misconduct, gross negligence or
bad faith or as a result of any inaccuracy of a representation or warranty
contained in Section 6.03 expressly made by the Owner Trustee;
(ii) with respect to any such claim, the Indemnified Party shall
have given the Master Servicer written notice thereof promptly after the
Indemnified Party shall have actual knowledge thereof;
(iii) while maintaining control over its own defense, the Master
Servicer shall consult with the Indemnified Party in preparing such
defense; and
(iv) notwithstanding anything in this Trust Agreement to the
contrary, the Master Servicer shall not be liable for settlement of any
claim by an Indemnified Party entered into without the prior consent of
the Master Servicer which consent shall not be unreasonably withheld.
The indemnities contained in this Section shall survive the resignation or
termination of the Owner Trustee or the termination of this Trust Agreement. In
the event of any claim, action or proceeding for which indemnity will be sought
pursuant to this Section 7.02, the Owner Trustee's choice of legal counsel, if
other than the legal counsel retained by the Owner Trustee in connection with
the execution and delivery of this Trust Agreement, shall be subject to the
approval of the Master Servicer, which approval shall not be unreasonably
withheld. In addition, upon written notice to the Owner Trustee and with the
consent of the Owner Trustee which consent shall not be unreasonably withheld,
the Master Servicer has the right to assume the defense of any claim, action or
proceeding against the Owner Trustee.
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ARTICLE VIII
Termination of Trust Agreement
Section 8.01. Termination of Trust Agreement. (a) This Trust Agreement
(other than Article VII) and the Trust shall terminate and be of no further
force or effect upon the earliest of (i) the final distribution of all moneys or
other property or proceeds of the Owner Trust Estate in accordance with the
terms of the Indenture and this Trust Agreement, (ii) the Payment Date in March
2028, or (iii) the distribution of all of the assets of the Owner Trust Estate,
in accordance with written instructions provided to the Owner Trustee by the
Seller, following the optional redemption of the Notes by the Seller pursuant to
Section 8.07 of the Indenture; provided in each case that all amounts owing to
the Noteholders and the Note Insurer to the extent payable from the Owner Trust
Estate or proceeds thereof have been paid in full and that all obligations under
the Indenture have been discharged. The bankruptcy, liquidation, dissolution,
death or incapacity of any Certificateholder shall not (x) operate to terminate
this Trust Agreement or the Trust or (y) entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of all or any part of the
Trust or the Owner Trust Estate or (z) otherwise affect the rights, obligations
and liabilities of the parties hereto.
(b) Except as provided in Section 8.01(a), neither the Company nor any
Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the Payment Date
upon which Certificateholders shall surrender their Certificates to the
Certificate Paying Agent for payment of the final distribution and cancellation,
shall be given by the Certificate Paying Agent by letter to Certificateholders
and the Note Insurer mailed within five Business Days of receipt of notice of
the final payment on the Notes from the Indenture Trustee, stating (i) the
Payment Date upon or with respect to which final payment of the Certificates
shall be made upon presentation and surrender of the Certificates at the office
of the Certificate Paying Agent therein designated, (ii) the amount of any such
final payment and (iii) that the Record Date otherwise applicable to such
Payment Date is not applicable, payments being made only upon presentation and
surrender of the Certificates at the office of the Certificate Payment Agent
therein specified. The Certificate Paying Agent shall give such notice to the
Owner Trustee and the Certificate Registrar at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Certificates, the
Certificate Paying Agent shall cause to be distributed to Certificateholders
amounts distributable on such Payment Date pursuant to Section 5.01.
In the event that all of the Certificateholders shall not surrender their
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Certificate Paying Agent shall give a second
written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. Subject to applicable laws with respect to escheat of funds, if within
one year following the Payment Date on which final payment of the Certificates
was to have been made pursuant to
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Section 3.05 of the Indenture, all the Certificates shall not have been
surrendered for cancellation, the Certificate Paying Agent may take appropriate
steps, or may appoint an agent to take appropriate steps, to contact the
remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Trust Agreement. Any funds remaining in the Certificate
Distribution Account after exhaustion of such remedies shall be distributed by
the Certificate Paying Agent to the Holder of the Certificate.
(d) Upon the winding up of the Trust and its termination, the Owner
Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810(d) of the Business Trust Statute.
ARTICLE IX
Successor Owner Trustees and Additional Owner Trustees
Section 9.01. Eligibility Requirements for Owner Trustee. The Owner
Trustee shall at all times be a corporation reasonably acceptable to the Note
Insurer and satisfying the provisions of Section 3807(a) of the Business Trust
Statute; authorized to exercise corporate trust powers; having a combined
capital and surplus of at least $50,000,000 and subject to supervision or
examination by federal or state authorities; and having (or having a parent that
has) a rating of at least Baa3 or is otherwise acceptable to the Note Insurer,
Moody's and Standard & Poor's. If such corporation shall publish reports of
condition at least annually pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purpose of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Owner Trustee shall cease to be
eligible in accordance with the provisions of this Section 9.01, the Owner
Trustee shall resign immediately in the manner and with the effect specified in
Section 9.02.
Section 9.02. Resignation and Replacement of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created
by giving 30 days prior written notice thereof to the Note Insurer and the
Company. Upon receiving such notice of resignation, the Company shall promptly
appoint a successor Owner Trustee with the consent of the Note Insurer which
will not be unreasonably withheld, by written instrument, in duplicate, one copy
of which instrument shall be delivered to the resigning Owner Trustee and to the
successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Owner Trustee may petition any court of
competent jurisdiction for the appointment of a successor Owner Trustee
reasonably acceptable to the Certificateholders and the Note Insurer.
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If at any time the Owner Trustee shall cease to be eligible in accordance
with the provisions of Section 9.01 and shall fail to resign after written
request therefor by the Company or the Note 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 Company may remove the Owner Trustee with
the consent of the Note Insurer and shall remove the Owner Trustee at the
direction of the Note Insurer.
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 9.03 and payment of all fees and expenses owed to
the outgoing Owner Trustee. The Master Servicer shall provide notice of such
resignation or removal of the Owner Trustee to each of the Rating Agencies and
the Note Insurer.
Section 9.03. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 9.02 shall execute, acknowledge and deliver to the
Indenture Trustee and to its predecessor Owner Trustee an instrument accepting
such appointment under this Trust Agreement, and thereupon the resignation or
removal of the predecessor Owner Trustee shall become effective, and such
successor Owner Trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor under this Trust Agreement, with like effect as if originally named
as Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees
and expenses deliver to the successor Owner Trustee all documents and statements
and monies held by it under this Trust Agreement; and the predecessor Owner
Trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for fully and certainly vesting and confirming in the
successor Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section 9.03 unless at the time of such acceptance such successor Owner Trustee
shall be eligible pursuant to Section 9.01.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section 9.03, the Owner Trustee shall mail notice thereof to all
Certificateholders, the Indenture Trustee, the Noteholders, the Note Insurer and
the Rating Agencies.
Section 9.04. Merger or Consolidation of Owner Trustee. Any Person into
which the Owner Trustee may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Owner Trustee shall be a party, or any Person
succeeding to all or substantially all of the corporate trust business of the
Owner Trustee, shall be the successor of the Owner Trustee hereunder, without
the execution or filing of any instrument or any further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding;
provided, that such Person shall be eligible pursuant to
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Section 9.01 and, provided, further, that the Owner Trustee shall mail notice of
such merger or consolidation to the Rating Agencies and the Note Insurer.
Section 9.05. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Trust Agreement, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Owner Trust Estate may at the time be located, the Owner Trustee
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons to act as co-trustee, jointly with the Owner Trustee, or as
separate trustee or trustees, of all or any part of the Owner Trust Estate, and
to vest in such Person, in such capacity, such title to the Trust or any part
thereof and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Owner Trustee or the Note Insurer
may consider necessary or desirable. No co-trustee or separate trustee under
this Trust Agreement shall be required to meet the terms of eligibility as a
successor Owner Trustee pursuant to Section 9.01 and no notice of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 9.03, except that notice to, and the consent of, the Note Insurer shall
be required for appointment of a co-trustee.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(a) All rights, powers, duties and obligations conferred or imposed upon
the Owner Trustee shall be conferred upon and exercised or performed by the
Owner Trustee and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not authorized to act
separately without the Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Owner Trust Estate or any
portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of
the Owner Trustee;
(b) No trustee under this Trust Agreement shall be personally liable by
reason of any act or omission of any other trustee under this Trust Agreement;
and
(c) The Owner Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee.
Any notice, request or other writing given to the Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Trust Agreement and the
conditions of this Article IX. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Trust Agreement, specifically including every
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provision of this Trust Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Owner Trustee. Each such
instrument shall be filed with the Owner Trustee.
Any separate trustee or co-trustee may at any time appoint the Owner
Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Trust Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor co-trustee or separate trustee.
ARTICLE X
Miscellaneous
Section 10.01. Amendments. (a) This Trust Agreement may be amended from
time to time by the parties hereto (with the prior written consent of the Note
Insurer and the Seller and with prior notice to the Rating Agencies) as
specified in this Section, provided that any amendment, except as provided in
subparagraph (e) below, shall be accompanied by an Opinion of Counsel addressed
to the Owner Trustee and obtained by the party seeking such amendment to the
effect that such amendment (i) complies with the provisions of this Section and
(ii) would not cause the Trust (if PacificAmerica Money Center, Inc. was not the
Holder of 100% of the Certificates or if the Note Insurance Policy is
outstanding) to be subject to an entity level tax for federal income tax
purposes.
(b) If the purpose of the amendment (as detailed therein) is to correct
any mistake, eliminate any inconsistency, cure any ambiguity or deal with any
matter not covered (i.e. to give effect to the intent of the parties and, if
applicable, to the expectations of the Holders), it shall not be necessary to
obtain the consent of any Holders, but the Owner Trustee shall be furnished with
(i) a letter from each of the Rating Agencies that the amendment will not result
in the downgrading or withdrawal of the rating then assigned to any Note or the
rating then assigned to any Note without taking into account the Note Insurance
Policy or (ii) an Opinion of Counsel obtained by the Master Servicer to the
effect that such action will not adversely affect in any material respect the
interests of any Holders or the Note Insurer, and the consent of the Note
Insurer shall be obtained.
(c) If the purpose of the amendment is to prevent the imposition of any
federal or state taxes at any time that any Security is outstanding, it shall
not be necessary to obtain the consent of any Holder, but the Owner Trustee and
the Note Insurer shall be furnished with an Opinion of Counsel obtained by the
Master Servicer that such amendment is necessary or helpful to prevent the
imposition of such taxes and is not materially adverse to any Holder or the Note
Insurer and the consent of the Note Insurer shall be obtained.
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(d) If the purpose of the amendment is to add or eliminate or change any
provision of the Trust Agreement other than as contemplated in (b) and (c)
above, the amendment shall require (i) an Opinion of Counsel obtained by the
party seeking such amendment to the effect that such action will not adversely
affect in any material respect the interests of any Holders or the Note Insurer,
(ii) the consent of the Note Insurer and (iii) either (A) a letter from each of
the Rating Agencies that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to any Note or the rating then assigned
to any Note without taking into account the Note Insurance Policy or (B) the
consent of the Indenture Trustee and the Holders of Certificates evidencing a
majority of the Certificate Principal Balance of the Certificates; provided,
however, that no such amendment shall (1) reduce in any manner the amount of, or
delay the timing of, payments received that are required to be distributed on
any Certificate without the consent of the related Certificateholder and the
Note Insurer, or (2) reduce the aforesaid percentage of Certificates the Holders
of which are required to consent to any such amendment, without the consent of
the Holders of all such Certificates then outstanding.
(e) If the purpose of the amendment is to provide for the holding of any
of the Certificates in book-entry form, it shall require the consent of Holders
of all such Certificates then outstanding; provided, that the Opinion of Counsel
specified in subparagraph (a) above shall not be required.
(f) If the purpose of the amendment is to provide for the issuance of
additional certificates representing an interest in the Trust, it shall not be
necessary to obtain the consent of any Holder, but the Owner Trustee shall be
furnished with (i) an Opinion of Counsel obtained by the party seeking such
amendment to the effect that such action will not adversely affect in any
material respect the interests of any Holders or the Note Insurer and (ii) a
letter from the each of the Rating Agencies that the amendment will not result
in the downgrading or withdrawal of the rating then assigned to any Notes or the
rating then assigned to the Notes without taking into account the Note Insurance
Policy and the consent of the Note Insurer shall be obtained.
(g) Promptly after the execution of any such amendment or consent, the
Master Servicer shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee, the Note
Insurer and each of the Rating Agencies. It shall not be necessary for the
consent of Certificateholders or the Indenture Trustee pursuant to this Section
10.01 to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents (and any other consents of Certificateholders
provided for in this Trust Agreement or in any other Basic Document) and of
evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Owner Trustee may
prescribe.
(h) In connection with the execution of any amendment to any agreement
to which the Trust is a party, other than this Trust Agreement, the Owner
Trustee shall be entitled to receive and conclusively rely upon an Opinion of
Counsel to the effect that such amendment is authorized or permitted by the
documents subject to such amendment and that all conditions
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precedent in the Basic Documents for the execution and delivery thereof by the
Trust or the Owner Trustee, as the case may be, have been satisfied.
Promptly after the execution of any amendment to the Certificate of Trust,
the Owner Trustee shall cause the filing of such amendment with the Secretary of
State of the State of Delaware.
Section 10.02. No Legal Title to Owner Trust Estate. The
Certificateholders shall not have legal title to any part of the Owner Trust
Estate solely by virtue of their status as Certificateholders. The
Certificateholders shall be entitled to receive distributions with respect to
their undivided beneficial interests therein only in accordance with Articles V
and VIII. No transfer, by operation of law or otherwise, of any right, title or
interest of the Certificateholders to and in their ownership interest in the
Owner Trust Estate shall operate to terminate this Trust Agreement or the trusts
hereunder or entitle any transferee to an accounting or to the transfer to it of
legal title to any part of the Owner Trust Estate
Section 10.03. Limitations on Rights of Others. Except for Section 2.07,
the provisions of this Trust Agreement are solely for the benefit of the Owner
Trustee, the Company, the Certificateholders, the Note Insurer and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders, and
nothing in this Trust Agreement (other than Section 2.07), whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of this
Trust Agreement or any covenants, conditions or provisions contained herein.
Section 10.04. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt, to the Owner Trustee at: Wilmington Trust Company,
Xxxxxx Square North, 0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000;
Attention: Corporate Trust Administration; to the Company at: Xxxxxxx Xxxxx
Mortgage Investors, Inc., 000 Xxxxx Xxxxxx, Xxxxx Financial Xxxxxx/Xxxxx Xxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx XxXxxxxx, Legal
Department; to the Indenture Trustee at: Bankers Trust Company of California,
N.A., 0 Xxxx Xxxxx, 00xx Xxxxx, Xxxxxx, Xxxxxxxxxx 00000; Attention: Corporate
Trust Department - PacificAmerica Home Equity Loan Trust Series 1998-1, to the
Note Insurer at: Financial Security Assurance Inc., 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000, Attention: Surveillance Department (telecopy number: (000) 000-0000);
to Moody's at: 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; Attention:
Residential Mortgage Monitoring Unit; to Standard & Poor's at 00 Xxxxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; Attention: Asset Backed Surveillance Group or,
as to each party, at such other address as shall be designated by such party in
a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder
shall be given by first-class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice so mailed within the
time prescribed in this Trust Agreement shall be conclusively presumed to have
been duly given, whether or not the Certificateholder receives such notice.
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(c) A copy of any notice delivered to the Owner Trustee or the Trust
shall also be delivered to the Company.
Section 10.05. Severability. Any provision of this Trust Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.06. Separate Counterparts. This Trust Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 10.07. Successors and Assigns. All representations, warranties,
covenants and agreements contained herein shall be binding upon, and inure to
the benefit of, each of the Company, the Note Insurer, the Owner Trustee and its
successors and each Certificateholder and its successors and permitted assigns,
all as herein provided. Any request, notice, direction, consent, waiver or other
instrument or action by a Certificateholder shall bind the successors and
assigns of such Certificateholder.
Section 10.08. No Petition. The Owner Trustee, by entering into this Trust
Agreement and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not at any time institute against the Company
or the Trust, or join in any institution against the Company or the Trust of,
any bankruptcy proceedings under any United States federal or state bankruptcy
or similar law in connection with any obligations to the Certificates, the
Notes, this Trust Agreement or any of the Basic Documents. This Section shall
survive for one year following the termination of this Trust Agreement.
Section 10.09. No Recourse. Each Certificateholder by accepting a
Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust only and do not represent interests in or
obligations of the Company, the Seller, the Owner Trustee, the Indenture Trustee
or any Affiliate thereof and no recourse may be had against such parties or
their assets, except as may be expressly set forth or contemplated in this Trust
Agreement, the Certificates or the Basic Documents.
Section 10.10. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 10.11. GOVERNING LAW. THIS TRUST AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
37
-32-
Section 10.12. Integration. This Trust Agreement constitutes the entire
agreement among the parties hereto pertaining to the subject matter hereof and
supersedes all prior agreements and understanding pertaining thereto.
Section 10.13. Third-Party Beneficiary. The Note Insurer shall be a third
party beneficiary hereof and shall be entitled to enforce the provisions hereof
as if a party hereto. This provision shall not be construed to limit or modify
in any way the fiduciary obligation of the Owner Trustee to the beneficial
owners of the Trust or to create a fiduciary obligation to any person other than
the beneficial owners of the Trust.
Section 10.14. Suspension and Termination of Note Insurer's Rights. During
the continuation of a Note Insurer Default, rights granted or reserved to the
Note Insurer hereunder shall vest instead in the Certificateholders; provided
that the Note Insurer shall be entitled to any distributions in reimbursement in
accordance with the Indenture.
At such time as either (i) the Note Principal Balance has been reduced to
zero or (ii) the Note Insurance Policy has been terminated and in either case of
(i) or (ii) the Note Insurer has been reimbursed for all Scheduled Payments and
any other amounts owed under the Note Insurance Policy and the Insurance
Agreement (and the Note Insurer no longer has any obligation under the Note
Insurance Policy, except for breach thereof by the Note Insurer), then the
rights and benefits granted or reserved to the Note Insurer hereunder (including
the rights to direct certain actions and receive certain notices) shall
terminate and the Certificateholders shall be entitled to the exercise of such
rights and to receive such benefits of the Note Insurer following such
termination to the extent that such rights and benefits are applicable to the
Certificateholders.
38
-33-
IN WITNESS WHEREOF, the Company and the Owner Trustee have caused their
names to be signed hereto by their respective officers thereunto duly
authorized, all as of the day and year first above written.
XXXXXXX XXXXX MORTGAGE
INVESTORS, INC., as Company,
By:_____________________________________
Name:________________________________
Title:_______________________________
WILMINGTON TRUST COMPANY, as
Owner Trustee,
By:_____________________________________
Name:
Title:
Acknowledged and Agreed:
BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
as Certificate Registrar
and Certificate Paying Agent
By:_____________________________________
Name:
Title:
39
EXHIBIT A
[Form of Certificate]
[Face]
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 3.05 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE REGISTRAR
SHALL HAVE RECEIVED EITHER (I) A REPRESENTATION LETTER FROM THE TRANSFEREE OF
THIS CERTIFICATE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT
PLAN SUBJECT TO THE FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR A PERSON ACTING
ON BEHALF OF ANY SUCH PLAN OR USING THE ASSETS OF ANY SUCH PLAN, OR (II) IF THIS
CERTIFICATE IS PRESENTED FOR REGISTRATION IN THE NAME OF A PLAN SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF ERISA, OR SECTION 4975 OF THE CODE (OR
COMPARABLE PROVISIONS OF ANY SUBSEQUENT ENACTMENTS), OR A TRUSTEE OF ANY SUCH
PLAN, OR ANY OTHER PERSON WHO IS USING THE ASSETS OF ANY SUCH PLAN TO EFFECT
SUCH ACQUISITION, AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OR
HOLDING OF THIS CERTIFICATE WILL NOT RESULT IN THE ASSETS OF THE OWNER TRUST
ESTATE BEING DEEMED TO BE "PLAN ASSETS" AND SUBJECT TO THE FIDUCIARY
RESPONSIBILITY PROVISIONS OF ERISA OR THE PROHIBITED TRANSACTION PROVISIONS OF
THE CODE, WILL NOT CONSTITUTE OR RESULT IN A PROHIBITED TRANSACTION WITHIN THE
MEANING OF SECTION 406 OR SECTION 407 OF ERISA OR SECTION 4975 OF THE CODE, AND
WILL NOT SUBJECT THE OWNER TRUSTEE OR THE COMPANY TO ANY OBLIGATION OR
LIABILITY.
NO TRANSFER OF THIS CERTIFICATE SHALL BE MADE UNLESS THE CERTIFICATE REGISTRAR
SHALL HAVE RECEIVED A CERTIFICATE OF NON-FOREIGN STATUS CERTIFYING AS TO THE
TRANSFEREE'S STATUS AS A U.S. PERSON OR CORPORATION UNDER U.S. LAW.
THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF THE SELLER,
THE COMPANY, THE MASTER SERVICER, THE INDENTURE
40
A-2
TRUSTEE, OR THE OWNER TRUSTEE OR ANY OF THEIR RESPECTIVE AFFILIATES, EXCEPT AS
EXPRESSLY PROVIDED IN THE TRUST AGREEMENT OR THE BASIC DOCUMENTS.
41
A-3
Certificate No.
Certificate Percentage Interest of this Certificate: _______%
Cut-off Date: March 1, 1998
First Payment Date
April 27, 1998
PACIFICAMERICA HOME EQUITY LOAN TRUST SERIES 1998-1
PACIFICAMERICA HOME EQUITY LOAN ASSET-BACKED CERTIFICATES,
SERIES 1998-1
Evidencing a fractional undivided equity interest in the Owner Trust
Estate, the property of which consists primarily of the Mortgage Loans in
PacificAmerica Home Equity Loan Trust Series 1998-1 (the "Trust"), a Delaware
business trust formed by
XXXXXXX XXXXX MORTGAGE INVESTORS, INC., as Company, pursuant to the
Trust Agreement referred to below.
This certifies that [name of Holder] is the registered owner of the
Certificate Percentage Interest represented hereby.
The Trust was created pursuant to a Trust Agreement, dated March __, 1998,
as amended and restated by the Amended and Restated Trust Agreement, dated as of
March 1, 1998 (as amended and supplemented from time to time, the "Trust
Agreement"), between the Company and Wilmington Trust Company, as owner trustee
(as amended and supplemented from time to time, the "Owner Trustee", which term
includes any successor entity under the Trust Agreement), a summary of certain
of the pertinent provisions of which is set forth hereinafter. This Certificate
is issued under and is subject to the terms, provisions and conditions of the
Trust Agreement, to which Trust Agreement the Holder of this Certificate by
virtue of the acceptance hereof assents and by which such Holder is bound.
This Certificate is one of a duly authorized issue of PacificAmerica Home
Equity Loan Asset-Backed Certificates, Series 1998-1 (herein called the
"Certificates") issued under the Trust Agreement to which reference is hereby
made for a statement of the respective rights thereunder of the Company, the
Owner Trustee and the Holders of the Certificates and the terms upon which the
Certificates are executed and delivered. All terms used in this Certificate
which are defined in the Trust Agreement shall have the meanings assigned to
them in the Trust Agreement. The Owner Trust Estate primarily consists of the
Mortgage Loans in the PacificAmerica Home Equity Loan Trust Series 1998-1 and a
Note Insurance Policy. The rights of the Holders of the Certificates are
subordinated to the rights of the Holders of the Notes, as set forth in the
Indenture.
42
A-4
There will be distributed on the 25th day of each month or, if such 25th
day is not a Business Day, the next Business Day (each, a "Payment Date"),
commencing in April 1998, to the Person in whose name this Certificate is
registered (i) with respect to the first Payment Date, on the Closing Date and
(ii) with respect to every other Payment Date, at the close of business on the
last Business Day of the month preceding the month of such Payment Date (the
"Record Date"), such Certificateholder's Certificate Percentage Interest in the
amount to be distributed to Certificateholders on such Payment Date.
The Certificateholder, by its acceptance of this Certificate, agrees that
it will look solely to the funds on deposit in the Payment Account that have
been released from the Lien of the Indenture for payment hereunder and that
neither the Owner Trustee in its individual capacity nor the Company is
personally liable to the Certificateholders for any amount payable under this
Certificate or the Trust Agreement or, except as expressly provided in the Trust
Agreement, subject to any liability under the Trust Agreement.
The Holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights of the Noteholders as described in the Indenture, dated as of March 1,
1998, between the Trust and Bankers Trust Company of California, N.A., as
Indenture Trustee (the "Indenture").
The Company and each Certificateholder, by acceptance of a Certificate,
agree to treat, and to take no action inconsistent with the treatment of, the
Certificates for federal, state and local income tax purposes as an equity
interest in the Trust.
Each Certificateholder, by its acceptance of a Certificate, covenants and
agrees that such Certificateholder will not at any time institute against the
Company, 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
similar law in connection with any obligations relating to the Certificates, the
Notes, the Trust Agreement or any of the Basic Documents.
Distributions on this Certificate will be made as provided in the Trust
Agreement by the Certificate Paying Agent by wire transfer or check mailed to
the Certificateholder of record in the Certificate Register without the
presentation or surrender of this Certificate or the making of any notation
hereon. Except as otherwise provided in the Trust Agreement and notwithstanding
the above, the final distribution on this Certificate will be made after due
notice by the Certificate Paying Agent of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
maintained by the Certificate Registrar for that purpose by the Trust in the
Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
43
A-5
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of the Owner Trustee, or an authenticating agent by
manual signature, this Certificate shall not entitle the Holder hereof to any
benefit under the Trust Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
44
A-6
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not in
its individual capacity, has caused this Certificate to be duly executed.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
Dated: By:_____________________________________
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
[WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner
Trustee
By:_____________________________________
Authorized Signatory
or______________________________________
As Authenticating Agent of the Trustee
By:_____________________________________
Authorized Signatory
[BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., not in its individual
capacity but solely as Owner Trustee
By:_____________________________________
Authorized Signatory
or______________________________________
As Authenticating Agent of the Trustee
By:_____________________________________
Authorized Signatory
45
A-7
46
A-8
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an interest in, the
Company, the Seller, the Master Servicer, the Indenture Trustee, the Owner
Trustee or any Affiliates of any of them and no recourse may be had against such
parties or their assets, except as expressly set forth or contemplated herein or
in the Trust Agreement or the Basic Documents. In addition, this Certificate is
not guaranteed by any governmental agency or instrumentality and is limited in
right of payment to certain collections and recoveries with respect to the
Mortgage Loans, all as more specifically set forth herein and in the Trust
Agreement. A copy of the Trust Agreement may be examined by any
Certificateholder upon written request during normal business hours at the
principal office of the Company and at such other places, if any, designated by
the Company.
The Trust Agreement permits the amendment thereof as specified below,
provided that any amendment be accompanied by the consent of the Note Insurer
and an Opinion of Counsel to the Owner Trustee to the effect that such amendment
complies with the provisions of the Trust Agreement and, if PacificAmerica Money
Center, Inc. was not the Holder of 100% of the Certificates, would not cause the
Trust to be subject to an entity level tax. If the purpose of the amendment is
to correct any mistake, eliminate any inconsistency, cure any ambiguity or deal
with any matter not covered, it shall not be necessary to obtain the consent of
any Holder, but the Owner Trustee shall be furnished with (A) a letter from each
of the Rating Agencies that the amendment will not result in the downgrading or
withdrawal of the rating then assigned to any Note or the rating then assigned
to any Note without taking into account the Note Insurance Policy or (B) an
Opinion of Counsel to the effect that such action will not adversely affect in
any material respect the interests of any Holders, and the consent of the Note
Insurer shall be obtained. If the purpose of the amendment is to prevent the
imposition of any federal or state taxes at any time that any Security is
outstanding, it shall not be necessary to obtain the consent of the any Holder,
but the Owner Trustee shall be furnished with an Opinion of Counsel that such
amendment is necessary or helpful to prevent the imposition of such taxes and is
not materially adverse to any Holder and the consent of the Note Insurer shall
be obtained. If the purpose of the amendment is to add or eliminate or change
any provision of the Trust Agreement, other than as specified in the preceding
two sentences, the amendment shall require (A) an Opinion of Counsel to the
effect that such action will not adversely affect in any material respect the
interests of any Holders, (B) the consent of the Note Insurer and (C) either (a)
a letter from each of the Rating Agencies that the amendment will not result in
the downgrading or withdrawal of the rating then assigned to any Note or the
rating then assigned to any Note without taking into account the Note Insurance
Policy or (b) the consent of the Indenture Trustee and the Holders of the
Certificates evidencing a majority of the Certificate Principal Balance of the
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments received that are
required to be distributed on any Certificate without the consent of the related
Certificateholder and the Note Insurer, or (ii) reduce the aforesaid percentage
of Certificates the Holders of which are required to consent to any such
amendment without the consent of the Holders of all such Certificates then
outstanding.
47
A-9
As provided in the Trust Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registerable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies of the Certificate Registrar maintained by
the Trust in the Borough of Manhattan, The City of New York, accompanied by a
written instrument of transfer in form satisfactory to the Certificate Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of authorized denominations
evidencing the same aggregate interest in the Trust will be issued to the
designated transferee. The initial Certificate Registrar appointed under the
Trust Agreement is Bankers Trust Company of California, N.A..
Except as provided in the Trust Agreement, the Certificates are issuable
only in a minimum Certificate Percentage Interest of 10%. As provided in the
Trust Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same aggregate denomination, as requested by the Holder
surrendering the same. No service charge will be made for any such registration
of transfer or exchange, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge
payable in connection therewith.
The Owner Trustee, the Certificate Paying Agent, the Certificate Registrar
and any agent of the Owner Trustee, the Certificate Paying Agent, or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Owner Trustee,
the Certificate Paying Agent, the Certificate Registrar or any such agent shall
be affected by any notice to the contrary.
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate as and when provided in accordance
with the terms of the Trust Agreement.
48
A-10
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
--------------------------------------------------------------------------------
to transfer said Certificate on the books of the Certificate Registrar, with
full power of substitution in the premises.
Dated:
___________________________________________*/
Signature Guaranteed:
____________________________*/
-----------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
49
A-11
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for the information of the
Certificate Paying Agent:
Distribution shall be made by wire transfer in immediately available funds
to ______________________________________________
_________________________________________________________________ for the
account of ________________________________________, account number
______________, or, if mailed by check, to ______________.
Applicable statements should be mailed to__________________.
________________________________________
Signature of assignee or agent
(for authorization of wire
transfer only)
50
EXHIBIT B
TO THE TRUST AGREEMENT
CERTIFICATE OF TRUST OF
PACIFICAMERICA HOME EQUITY LOAN TRUST SERIES 1998-1
THIS Certificate of Trust of PacificAmerica Home Equity Loan Trust Series
1998-1 (the "Trust"), dated ____________, 1998, is being duly executed and filed
by ______________________, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. Code, Section 3801
et seq.).
1. Name. The name of the business trust formed hereby is PacificAmerica
Home Equity Loan Trust Series 1998-1.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is ______________________,
__________________, __________, ______________, Attention:
______________________________.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust,
has executed this Certificate of Trust as of the date first above written.
______________________,
not in its individual capacity but
solely as owner trustee under a Trust
Agreement dated as of ____________, 1998
By:
-------------------------------------
Name:
Title:
51
EXHIBIT C
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
-----------------------------------------------
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer (the
"Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the Owner
Trustee and the Company (each as defined in the Amended and Restated Trust
Agreement (the "Agreement"), dated as of March 1, 1998, between Xxxxxxx Xxxxx
Mortgage Investors, Inc., as Company, and Wilmington Trust Company, as Owner
Trustee) pursuant to Section 3.05 of the Agreement and Bankers Trust Company of
California, N.A. as indenture trustee, as follows:
a. The Buyer understands that the Rule 144A Securities have not
been registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
52
C-2
c. The Buyer has been furnished with all information regarding
the Rule 144A Securities that it has requested from the Seller, the
Indenture Trustee, the Owner Trustee or the Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any
interest in the Rule 144A Securities or any other similar security with,
any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action,
that would constitute a distribution of the Rule 144A Securities under the
1933 Act or that would render the disposition of the Rule 144A Securities
a violation of Section 5 of the 1933 Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize any
person to act, in such manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2. The Buyer is aware that the sale to it is being made in reliance on
Rule 144A. The Buyer is acquiring the Rule 144A Securities for its own
account or the accounts of other qualified institutional buyers,
understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the 1933 Act.
[3. The Buyer warrants and represents to, and covenants with, the
Seller, the Indenture Trustee, Owner Trustee, Master Servicer and the Company
that either (1) the Buyer is (A) not an employee benefit plan (within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), or a plan (within the meaning of Section 4975(e)(1) of
the Internal Revenue Code of 1986 ("Code")), which (in either case) is subject
to ERISA or Section 4975 of the Code (both a "Plan"), and (B) is not directly or
indirectly purchasing the Rule 144A Securities on behalf of, as investment
manager of, as named fiduciary of, as trustee of, or with "plan assets" of a
Plan, or (2) the Buyer understands that registration of transfer of any Rule
144A Securities to any Plan, or to any Person acting on behalf of any Plan, will
not be made unless such Plan delivers an opinion of its counsel, addressed and
satisfactory to the Certificate Registrar and the Company, to the effect that
the purchase and holding of the Rule 144A Securities by, on behalf of or with
"plan assets" of any Plan would not constitute or result in a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code, and would
not subject the Company, the Master Servicer, the Indenture Trustee or the Trust
to any
53
C-3
obligation or liability (including liabilities under ERISA or Section 4975 of
the Code) in addition to those undertaken in the Agreement or any other
liability.]
4. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
Capitalized terms used herein and not otherwise defined herein have the
meanings assigned to them in the Agreement.
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
----------------------------------- -----------------------------------
Print Name of Seller Print Name of Buyer
By:________________________________ By:________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.________________________________ No.________________________________
Date:______________________________ Date:______________________________
54
C-4
ANNEX 1 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $______________________(1) in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto.
--------
(1) Buyer must own and/or invest on a discretionary basis at least $100,000,000
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $10,000,000 in securities.
55
C-5
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined
by a State or Federal authority having supervision over any such
institutions or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of
Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
___ Investment Adviser. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund that
includes as participants individual retirement accounts or H.R. 10
plans.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan
56
C-6
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
----------------------------------------
Print Name of Buyer
By:_____________________________________
Name:
Title:
Date:__________________________________
57
C-7
ANNEX 2 TO EXHIBIT C
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $______________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) bank deposit notes and certificates of deposit,
(iii) loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
58
C-8
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
----------------------------------------
Print Name of Buyer
By:_____________________________________
Name:________________________________
Title:_______________________________
IF AN ADVISER:
----------------------------------------
Print Name of Buyer
Date:__________________________________
59
EXHIBIT D
FORM OF INVESTOR REPRESENTATION LETTER
, 19
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
World Financial Xxxxxx/Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bankers Trust Company of California, N.A.
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: PacificAmerica Home Equity Loan Trust Series 1998-1
PacificAmerica Home Equity Loan Asset-Backed Certificates,
Series 1998-1 (the "Certificates")
Ladies and Gentlemen:
(the "Purchaser") intends to purchase from (the "Seller") $
of the above-captioned Certificates, issued pursuant to the Amended and Restated
Trust Agreement (the "Trust Agreement"), dated as of March 1, 1998, between
Xxxxxxx Xxxxx Mortgage Investors, Inc., as company (the "Company") and
Wilmington Trust Company, as owner trustee (the "Owner Trustee"), as
acknowledged and agreed by Bankers Trust Company of California, N.A., as
Certificate Registrar. All terms used herein and not otherwise defined shall
have the meanings set forth in the Trust Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Company and the
Certificate Registrar that:
1. The Purchaser understands that (a) the Certificates have
not been and will not be registered or qualified under the
Securities Act of 1933, as amended (the "Act") or any state
securities law, (b) the Company is not required to so register or
qualify the Certificates, (c) the Certificates may be resold only if
registered and qualified pursuant to the provisions of the Act or
any state securities law, or if an exemption from such registration
and qualification is available, (d) the Trust Agreement contains
restrictions regarding the transfer of the Certificates and (e) the
Certificates will bear a legend to the foregoing effect.
60
D-2
2. The Purchaser is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in
financial and business matters, and, in particular, in such matters
related to securities similar to the Certificates, such that it is
capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of
Rule 501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review (a) a copy of the Trust Agreement and (b) such
other information concerning the Certificates, the Mortgage Loans
and the Company as has been requested by the Purchaser from the
Company or the Seller and is relevant to the Purchaser's decision to
purchase the Certificates. The Purchaser has had any questions
arising from such review answered by the Company or the Seller to
the satisfaction of the Purchaser.
5. The Purchaser has not and will not nor has it authorized
or will it authorize any person to (a) offer, pledge, sell, dispose
of or otherwise transfer any Certificate, any interest in any
Certificate or any other similar security to any person in any
manner, (b) solicit any offer to buy or to accept a pledge,
disposition of other transfer of any Certificate, any interest in
any Certificate or any other similar security from any person in any
manner, (c) otherwise approach or negotiate with respect to any
Certificate, any interest in any Certificate or any other similar
security with any person in any manner, (d) make any general
solicitation by means of general advertising or in any other manner
or (e) take any other action, that (as to any of (a) through (e)
above) would constitute a distribution of any Certificate under the
Act, that would render the disposition of any Certificate a
violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto.
The Purchaser will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the Trust
Agreement.
6. The Purchaser represents:
(i) that either (a) or (b) is satisfied, as marked below:
____ a. The Purchaser is not any employee benefit plan subject to
the Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
or the Internal Revenue Code of 1986 (the "Code"), a Person acting,
directly or indirectly, on behalf of any such plan or any Person acquiring
such Certificates with "plan assets" of a
61
D-3
Plan within the meaning of the Department of Labor regulation promulgated
at 29 C.F.R. Section 2510.3- 101; or
____ b. The Purchaser will provide the Company, the Owner Trustee,
the Certificate Registrar and the Master Servicer with either: (x) an
opinion of counsel, satisfactory to the Company, the Owner Trustee, the
Certificate Registrar and the Master Servicer, to the effect that the
purchase and holding of a Certificate by or on behalf of the Purchaser is
permissible under applicable law, will not constitute or result in a
prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code (or comparable provisions of any subsequent enactments) and will not
subject the Company, the Owner Trustee, the Trust, the Certificate
Registrar or the Master Servicer to any obligation or liability (including
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Trust Agreement, which opinion of counsel shall not be
an expense of the Company, the Owner Trustee, the Trust, the Certificate
Registrar or the Master Servicer; or (y) in lieu of such opinion of
counsel, a certification in the form of Exhibit G to the Trust Agreement;
and
(ii) the Purchaser is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406 and
407 of ERISA and Section 4975 of the Code and understands that each of the
parties to which this certification is made is relying and will continue
to rely on the statements made in this paragraph 6.
7. The Purchaser is not a non-United States person.
Very truly yours,
By:
Name:
Title:
62
EXHIBIT E
FORM OF TRANSFEROR REPRESENTATION LETTER
, 19
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
World Financial Xxxxxx/Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Bankers Trust Company of California, N.A.
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Trust Administration
Re: PacificAmerica Home Equity Loan Trust Series 1998-1
PacificAmerica Home Equity Loan Asset-Backed Certificates,
Series 1998-1 (the "Certificates")
Ladies and Gentlemen:
(the "Purchaser") intends to purchase from (the "Seller") a
___% Certificate Percentage Interest of PacificAmerica Home Equity Loan Asset-
Backed Certificates, Series 1998-1 (the "Certificates"), issued pursuant to the
Amended and Restated Trust Agreement (the "Trust Agreement"), dated as of March
1, 1998 between Xxxxxxx Xxxxx Mortgage Investors, Inc., as company (the
"Company"), and Wilmington Trust Company, as owner trustee (the "Owner
Trustee"), as acknowledged and agreed by Bankers Trust Company of California,
N.A., as Certificate Registrar. All terms used herein and not otherwise defined
shall have the meanings set forth in the Trust Agreement. The Seller hereby
certifies, represents and warrants to, and covenants with, the Company and the
Certificate Registrar that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that
63
E-2
would render the disposition of any Certificate a violation of Section 5 of the
Act or any state securities law, or that would require registration or
qualification pursuant thereto. The Seller will not act, in any manner set forth
in the foregoing sentence with respect to any Certificate. The Seller has not
and will not sell or otherwise transfer any of the Certificates, except in
compliance with the provisions of the Trust Agreement.
Very truly yours,
(Seller)
By:
Name:
Title:
64
EXHIBIT F
CERTIFICATE OF NON-FOREIGN STATUS
This Certificate of Non-Foreign Status ("certificate") is delivered
pursuant to Section 3.05 of the Amended and Restated Trust Agreement, dated as
of March 1, 1998 (the "Trust Agreement"), between Xxxxxxx Xxxxx Mortgage
Investors, Inc., as Company and Wilmington Trust Company, as Owner Trustee, in
connection with the acquisition of, transfer to or possession by the
undersigned, whether as beneficial owner (the "Beneficial Owner"), or nominee on
behalf of the Beneficial Owner of the PacificAmerica Home Equity Loan
Asset-Backed Certificates, Series 1998-1 (the "Certificate"). Capitalized terms
used but not defined in this certificate have the respective meanings given them
in the Trust Agreement.
Each holder must complete Part I, Part II (if the holder is a nominee), and in
all cases sign and otherwise complete Part III.
In addition, each holder shall submit with the Certificate an IRS Form W-9
relating to such holder.
To confirm to the Trust that the provisions of Sections 871, 881 or 1446 of the
Internal Revenue Code (relating to withholding tax on foreign partners) do not
apply in respect of the Certificate held by the undersigned, the undersigned
hereby certifies:
Part I - Complete Either A or B
A. Individual as Beneficial Owner
1. I am (The Beneficial Owner is ) not a non-resident alien
for purposes of U.S. income taxation;
2. My (The Beneficial Owner's) name and home address are:
; and
3. My (The Beneficial Owner's) U.S. taxpayer identification
number (Social Security Number) is .
B. Corporate, Partnership or Other Entity as Beneficial Owner
1. (Name of the Beneficial Owner) is not a foreign
corporation, foreign partnership, foreign trust or
foreign estate (as those terms are defined in the Code
and Treasury Regulations;
2. The Beneficial Owner's office address and place of
incorporation (if applicable) is
65
F-2
; and
3. The Beneficial Owner's U.S. employer identification
number is .
Part II - Nominees
If the undersigned is the nominee for the Beneficial Owner, the
undersigned certifies that this certificate has been made in reliance upon
information contained in:
an IRS Form W-9
a form such as this or substantially similar
provided to the undersigned by an appropriate person and (i) the undersigned
agrees to notify the Trust at least thirty (30) days prior to the date that the
form relied upon becomes obsolete, and (ii) in connection with change in
Beneficial Owners, the undersigned agrees to submit a new Certificate of
Non-Foreign Status to the Trust promptly after such change.
Part III - Declaration
The undersigned, as the Beneficial Owner or a nominee thereof, agrees to
notify the Trust within sixty (60) days of the date that the Beneficial Owner
becomes a foreign person. The undersigned understands that this certificate may
be disclosed to the Internal Revenue Service by the Trust and any false
statement contained therein could be punishable by fines, imprisonment or both.
66
F-3
Under penalties of perjury, I declare that I have examined this
certificate and to the best of my knowledge and belief it is true, correct and
complete and will further declare that I will inform the Trust of any change in
the information provided above, and, if applicable, I further declare that I
have the authority* to sign this document.
Name
Title (if applicable)
Signature and Date
*NOTE: If signed pursuant to a power of attorney, the power of attorney must
accompany this certificate.
67
EXHIBIT G
FORM OF ERISA REPRESENTATION LETTER
_____________, 199__
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
World Financial Xxxxxx/Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wilmington Trust Company, as Owner Trustee
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Bankers Trust Company of California, N.A., as Certificate Registrar
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: PacificAmerica Home Equity Loan Trust Series 1998-1
PacificAmerica Home Equity Loan Asset-Backed Certificates,
Series 1998-1
Dear Sirs:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") a ____% Certificate
Percentage Interest of PacificAmerica. Home Equity Loan Asset-Backed
Certificates, Series 1998-1 (the "Certificates"), issued pursuant to an Amended
and Restated Trust Agreement (the "Trust Agreement"), dated as of March 1, 1998,
between Xxxxxxx Xxxxx Mortgage Investors, Inc., as company (the "Company") and
Wilmington Trust Company, as trustee (the "Owner Trustee"). Capitalized terms
used herein and not otherwise defined shall have the meanings assigned thereto
in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to, and covenants
with, the Company, the Owner Trustee, the Certificate Registrar and the Master
Servicer that either:
(1) The Certificates (i) are not being acquired by, and will not
be transferred to, any employee benefit plan within the meaning of section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") or other retirement arrangement, including individual retirement
accounts and annuities, Xxxxx plans and bank collective investment funds
and insurance company general or separate accounts in which such plans,
accounts or arrangements are invested, that is subject to Section 406 of
ERISA or Section 4975 of the Internal Revenue Code of 1986 (the "Code")
(any of the foregoing, a "Plan"), (ii) are not being acquired with "plan
assets" of a Plan within the meaning of
68
G-2
the Department of Labor ("DOL") regulation, 29 C.F.R. Section 2510.3-101,
and (iii) will not be transferred to any entity that is deemed to be
investing in plan assets within the meaning of the DOL regulation, 29
C.F.R. Section 2510.3-101; or
(2) The purchase of the Certificates is permissible under
applicable law, will not constitute or result in any prohibited
transaction under ERISA or Section 4975 of the Code, will not subject the
Company or the Trustee to any obligation in addition to those undertaken
in the Trust Agreement and, with respect to each source of funds being
used by the Transferee to acquire the Certificates (each being referred to
as a "Source") and the following statements in either (a) or (b):
(a) the Transferee is an insurance company and (i) the
Source is assets of its "general account," (ii) the conditions set
forth in PTCE 95-60 issued by the DOL have been satisfied and the
purchase and holding of Certificates by or on behalf of the
Transferee are exempt under PTCE 95-60 and (iii) the amount of
reserves and liabilities for such general account contracts held by
or on behalf of any Plan do not exceed 10% of the total reserves and
liabilities of such general account plus surplus as of the date
hereof (for purposes of this clause, all Plans maintained by the
same employer (or affiliate thereof) or employee organization are
deemed to be a single Plan) in connection with its purchase and
holding of such Certificates; or
(b) the Transferee is an insurance company and (i) the
Source is assets of its "general account," (ii) the requirements of
Section 401(c) of ERISA and the DOL regulations to be promulgated
thereunder ("401(c) Regulations") have been satisfied and will
continue to be satisfied and (iii) the Transferee represents that it
understands that the operation of the general account after December
31, 1998 may affect its ability to continue to hold the Certificates
after the date which is 18 months after the 401(c) Regulations
become final and unless a class exemption issued by the DOL or an
exception under Section 401(c) of ERISA is then available for the
continued holding of Certificates, if the assets of the general
account constitute Plan Assets, it will dispose of the Certificates
prior to the date which is 18 months after the 401(c) Regulations
become final.
69
G-3
(3) The Transferee is familiar with the prohibited transaction
restrictions and fiduciary responsibility requirements of Sections 406 and
407 of ERISA and Section 4975 of the Code and understands that each of the
parties to which this certification is made is relying and will continue
to rely on the statements made herein.
Very truly yours,
By:
Name:
Title:
70
EXHIBIT H
FORM OF REPRESENTATION LETTER
_____________, 199__
Xxxxxxx Xxxxx Mortgage Investors, Inc.
000 Xxxxx Xxxxxx
World Financial Xxxxxx/Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wilmington Trust Company, as Owner Trustee
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Bankers Trust Company of California, N.A., as Certificate Registrar
0 Xxxx Xxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxx 00000
Re: PacificAmerica Home Equity Loan Trust Series 1998-1
PacificAmerica Home Equity Loan Asset-Backed Certificates,
Series 1998-1
Dear Sirs:
__________________________________ (the "Transferee") intends to
acquire from _____________________ (the "Transferor") a ___% Certificate
Percentage Interest of PacificAmerica Home Equity Loan Asset-Backed
Certificates, Series 1998-1 (the "Certificates"), issued pursuant to an Amended
and Restated Trust Agreement (the "Trust Agreement"), dated as of March 1, 1998
among Xxxxxxx Xxxxx Mortgage Investors, Inc., as company (the "Company") and
Wilmington Trust Company, as trustee (the "Owner Trustee"). Capitalized terms
used herein and not otherwise defined shall have the meanings assigned thereto
in the Trust Agreement.
The Transferee hereby certifies, represents and warrants to, and
covenants with, the Company, the Owner Trustee, the Certificate Registrar and
the Master Servicer that:
(1) the Transferee is acquiring the Certificate for its own behalf
and is not acting as agent or custodian for any other person or entity in
connection with such acquisition; and
(2) the Transferee is not a partnership, grantor trust or S
corporation for federal income tax purposes, or, if the Transferee is a
partnership, grantor trust or S corporation
71
H-2
for federal income tax purposes, the Certificates are not more than 50% of
the assets of the partnership, grantor trust or S corporation.
Very truly yours,
By:
Name:
Title:
72
EXHIBIT I
INITIAL TRUST AGREEMENT
