BEAR STEARNS ARM TRUST 2006-1 Issuing Entity WELLS FARGO BANK, N.A. Securities Administrator and Indenture Trustee INDENTURE Dated as of February 28, 2006 MORTGAGE-BACKED NOTES
BEAR
XXXXXXX ARM TRUST 2006-1
Issuing
Entity
XXXXX
FARGO BANK, N.A.
Securities
Administrator
and
U.S.
BANK
NATIONAL ASSOCIATION
Indenture
Trustee
________________________________
Dated
as
of February 28, 2006
________________________________
MORTGAGE-BACKED
NOTES
________________________________
TABLE
OF
CONTENTS
|
ARTICLE
I
|
|
|
Definitions
|
|
|
Section
1.01
|
Definitions
|
|
Section
1.02
|
Incorporation
by Reference of Trust Indenture Act
|
|
Section
1.03
|
Rules
of Construction
|
|
ARTICLE
II
|
|
|
Original
Issuance of Notes
|
|
|
Section
2.01
|
Form
|
|
Section
2.02
|
Execution,
Authentication and Delivery
|
|
ARTICLE
III
|
|
|
Covenants
|
|
|
Section
3.01
|
Payment
Account
|
|
Section
3.02
|
Existence
|
|
Section
3.03
|
Payment
of Principal and Interest
|
|
Section
3.04
|
Protection
of Trust Estate
|
|
Section
3.05
|
Opinions
as to Trust Estate
|
|
Section
3.06
|
Performance
of Obligations.
|
|
Section
3.07
|
Negative
Covenants
|
|
Section
3.08
|
Annual
Statement as to Compliance
|
|
Section
3.09
|
[Reserved].
|
|
Section
3.10
|
Representations
and Warranties Concerning the Mortgage Loans
|
|
Section
3.11
|
Investment
Company Act
|
|
Section
3.12
|
Issuing
Entity May Consolidate, etc
|
|
Section
3.14
|
No
Other Business
|
|
Section
3.15
|
No
Borrowing
|
|
Section
3.16
|
Guarantees,
Loans, Monthly Advances and Other Liabilities
|
|
Section
3.17
|
Capital
Expenditures
|
|
Section
3.18
|
Determination
of Note Index
|
|
Section
3.19
|
Restricted
Payments
|
|
Section
3.20
|
Notice
of Events of Default
|
|
Section
3.21
|
Further
Instruments and Acts
|
|
Section
3.22
|
Reserved.
|
|
Section
3.23
|
Certain
Representations Regarding the Trust Estate
|
|
Section
3.24
|
Allocation
of Realized Losses
|
|
Section
3.25
|
Permitted
Withdrawals and Transfers from the Payment Account
|
|
ARTICLE
IV
|
|
|
The
Notes; Satisfaction and Discharge of Indenture
|
|
|
Section
4.01
|
The
Notes
|
|
Section
4.02
|
Registration
of and Limitations on Transfer and Exchange of Notes; Appointment
of Note
Registrar and Certificate Registrar
|
|
Section
4.03
|
Mutilated,
Destroyed, Lost or Stolen Notes
|
|
Section
4.04
|
Persons
Deemed Owners
|
|
Section
4.05
|
Cancellation
|
|
Section
4.06
|
Book-Entry
Notes
|
|
Section
4.07
|
Notices
to Depository
|
|
Section
4.08
|
Definitive
Notes
|
|
Section
4.09
|
Tax
Treatment
|
|
Section
4.10
|
Satisfaction
and Discharge of Indenture
|
|
Section
4.11
|
Application
of Trust Money
|
|
Section
4.12
|
[Reserved].
|
|
Section
4.13
|
Repayment
of Monies Held by Paying Agent
|
|
Section
4.14
|
Temporary
Notes
|
|
Section
4.15
|
ERISA
Treatment
|
|
ARTICLE
V
|
|
|
Default
and Remedies
|
|
|
Section
5.01
|
Events
of Default
|
|
Section
5.02
|
Acceleration
of Maturity; Rescission and Annulment
|
|
Section
5.03
|
Collection
of Indebtedness and Suits for Enforcement by Indenture
Trustee
|
|
Section
5.04
|
Remedies;
Priorities
|
|
Section
5.05
|
Optional
Preservation of the Trust Estate
|
|
Section
5.06
|
Limitation
of Suits
|
|
Section
5.07
|
Unconditional
Rights of Noteholders To Receive Principal and Interest
|
|
Section
5.08
|
Restoration
of Rights and Remedies
|
|
Section
5.09
|
Rights
and Remedies Cumulative
|
|
Section
5.10
|
Delay
or Omission Not a Waiver
|
|
Section
5.11
|
Control
By Noteholders
|
|
Section
5.12
|
Waiver
of Past Defaults
|
|
Section
5.13
|
Undertaking
for Costs
|
|
Section
5.14
|
Waiver
of Stay or Extension Laws
|
|
Section
5.15
|
Sale
of Trust Estate
|
|
Section
5.16
|
Action
on Notes
|
|
ARTICLE
VI
|
|
|
The
Indenture Trustee and The Securities Administrator
|
|
|
Section
6.01
|
Duties
of Indenture Trustee and Securities Administrator
|
|
Section
6.02
|
Rights
of Indenture Trustee and Securities Administrator
|
|
Section
6.03
|
Individual
Rights of Indenture Trustee
|
|
Section
6.04
|
[Reserved].
|
|
Section
6.05
|
Indenture
Trustee’s and Securities Administrator’s Disclaimer
|
|
Section
6.06
|
Notice
of Event of Default
|
|
Section
6.07
|
Reports
to Holders and Tax Administration
|
|
Section
6.08
|
Compensation
|
|
Section
6.09
|
Replacement
of Indenture Trustee and the Securities Administrator
|
|
Section
6.10
|
Successor
Indenture Trustee and Securities Administrator by
Xxxxxx
|
|
Section
6.11
|
Appointment
of Co-Indenture Trustee or Separate Indenture Trustee
|
|
Section
6.12
|
Eligibility;
Disqualification
|
|
Section
6.13
|
[Reserved]
|
|
Section
6.14
|
Representations
and Warranties
|
|
Section
6.15
|
Directions
to Indenture Trustee and the Securities Administrator.
|
|
Section
6.16
|
The
Agents
|
|
ARTICLE
VII
|
|
|
Noteholders’
Lists and Reports
|
|
|
Section
7.01
|
Issuing
Entity To Furnish Securities Administrator Trustee Names and Addresses
of
Noteholders
|
|
Section
7.02
|
Preservation
of Information; Communications to Noteholders
|
|
Section
7.03
|
Financial
Information
|
|
Section
7.04
|
Statements
to Noteholders
|
|
ARTICLE
VIII
|
|
|
Accounts,
Disbursements and Releases
|
|
|
Section
8.01
|
Collection
of Money
|
|
Section
8.02
|
Officer’s
Certificate
|
|
Section
8.03
|
Termination
Upon Distribution to Noteholders
|
|
Section
8.04
|
Termination
Upon REMIC Conversion
|
|
Section
8.05
|
Release
of Trust Estate
|
|
Section
8.06
|
Surrender
of Notes Upon Final Payment or Receipt of REMIC
Securities
|
|
Section
8.07
|
Optional
Redemption of the Mortgage Loans
|
|
ARTICLE
IX
|
|
|
Supplemental
Indentures
|
|
|
Section
9.01
|
Supplemental
Indentures Without Consent of Noteholders
|
|
Section
9.02
|
Supplemental
Indentures With Consent of Noteholders
|
|
Section
9.03
|
Execution
of Supplemental Indentures
|
|
Section
9.04
|
Effect
of Supplemental Indenture
|
|
Section
9.05
|
Conformity
with Trust Indenture Act
|
|
Section
9.06
|
Reference
in Notes to Supplemental Indentures
|
|
ARTICLE
X
|
|
|
Miscellaneous
|
|
|
Section
10.01
|
Compliance
Certificates and Opinions, etc
|
|
Section
10.02
|
Form
of Documents Delivered to Indenture Trustee
|
|
Section
10.03
|
Acts
of Noteholders
|
|
Section
10.04
|
Notices
etc., to Indenture Trustee Issuing Entity, Securities Administrator
and
Rating Agencies
|
|
Section
10.05
|
Notices
to Noteholders; Waiver
|
|
Section
10.06
|
Conflict
with Trust Indenture Act
|
|
Section
10.07
|
Effect
of Headings
|
|
Section
10.08
|
Successors
and Assigns
|
|
Section
10.09
|
Separability
|
|
Section
10.10
|
Legal
Holidays.
|
|
Section
10.11
|
GOVERNING
LAW
|
|
Section
10.12
|
Counterparts
|
|
Section
10.13
|
Recording
of Indenture
|
|
Section
10.14
|
Issuing
Entity Obligation
|
|
Section
10.15
|
No
Petition
|
|
Section
10.16
|
Inspection
|
|
ARTICLE
XI
|
|
|
TMP
TRIGGER EVENT AND REMIC CONVERSION
|
|
|
Section
11.01
|
Events
to Occur Upon TMP Trigger Event
|
EXHIBITS
|
Exhibit
A-1
|
Form
of Class A Notes
|
|
Exhibit
A-2
|
Form
of Class X Notes
|
|
Exhibit
A-3
|
Form
of Class B Notes
|
|
Exhibit
B
|
Mortgage
Loan Schedule
|
|
Exhibit
C
|
Form
of Rule 144A Investment Representation Letter
|
|
Exhibit
D
|
Form
of Transferee Letter
|
|
Exhibit
E
|
Form
of Transferor Certificate
|
|
Exhibit
F
|
Form
of Transferee Certificate (REIT)
|
|
Exhibit
G
|
Form
of Lender Transferor Certificate
|
|
Appendix
A
|
Definitions
|
RECONCILIATION
AND TIE BETWEEN TRUST INDENTURE
ACT
OF
1939 AND INDENTURE PROVISIONS*
Act
Section Indenture
Section
|
Trust
Indenture Act Section
|
Indenture
Section
|
|
310(a)(1)
|
6.11
|
|
(a)(2)
|
6.11
|
|
(a)(3)
|
6.10
|
|
(a)(4)
|
Not
Applicable
|
|
(a)(5)
|
6.11
|
|
(b)
|
6.08,
6.11
|
|
(c)
|
Not
Applicable
|
|
311(a)
|
6.12
|
|
(b)
|
6.12
|
|
(c)
|
Not
Applicable
|
|
312(a)
|
7.01,
7.02(a)
|
|
(b)
|
7.02(b)
|
|
(c)
|
7.02(c)
|
|
313(a)
|
Not
Applicable
|
|
(b)
|
Not
Applicable
|
|
(c)
|
Not
Applicable
|
|
(d)
|
Not
Applicable
|
|
314(a)
|
3.10
|
|
(b)
|
3.07
|
|
(c)(1)
|
8.05(c),
10.01(a)
|
|
(c)(2)
|
8.05(c),
10.01(a)
|
|
(c)(3)
|
Not
Applicable
|
|
(d)(1)
|
8.05(c),
10.01(b)
|
|
(d)(2)
|
8.05(c),
10.01(b)
|
|
(d)(3)
|
8.05(c),
10.01(b)
|
|
(e)
|
10.01(a)
|
|
315(a)
|
6.01(b)
|
|
(b)
|
6.05
|
|
(c)
|
6.01(a)
|
|
(d)
|
6.01(c)
|
|
(d)(1)
|
6.01(c)
|
|
(d)(2)
|
6.01(c)
|
|
(d)(3)
|
6.01(c)
|
|
(e)
|
5.13
|
|
316(a)(1)(A)
|
5.11
|
|
316(a)(1)(B)
|
5.12
|
|
316(a)(2)
|
Not
Applicable
|
|
316(b)
|
5.07
|
|
317(a)(1)
|
5.04
|
|
317(a)(2)
|
5.03(d)
|
|
317(b)
|
3.03(a)(i)
|
|
318(a)
|
10.07
|
This
Indenture, dated as of February 28, 2006, is entered into among Bear Xxxxxxx
ARM
Trust 2006-1, a Delaware statutory trust, as Issuing Entity (the “Issuing
Entity”), Xxxxx Fargo Bank, N.A., as Securities Administrator (the “Securities
Administrator”) and U.S. Bank National Association, as Indenture Trustee (the
“Indenture Trustee”).
WITNESSETH
THAT:
Each
party hereto agrees as follows for the benefit of the other party and for the
equal and ratable benefit of the Holders of the Issuing Entity’s Mortgage-Backed
Notes, Series 2006-1 (the “Notes”).
GRANTING
CLAUSE
The
Issuing Entity hereby Grants to the Indenture Trustee at the Closing Date,
as
trustee for the benefit of the Holders of the Notes, all of the Issuing Entity's
right, title and interest in and to, whether now existing or hereafter created,
(a) the Mortgage Loans and Substitute Mortgage Loans and the proceeds thereof
and all rights under the Related Documents; (b) all funds on deposit from time
to time in the Master Servicer Collection Account, excluding any investment
income from such funds; (c) all
funds
on deposit from time to time in the Payment Account and in all proceeds thereof;
(d) any
REO
Property; (e) all rights under (I) the Mortgage Loan Purchase Agreement as
assigned to the Issuing Entity, with respect to the Mortgage Loans as assigned
to the Issuing Entity, (II) the Required Insurance Policies and any amounts
paid
or payable by the insurer under any Insurance Policy (to the extent the
mortgagee has a claim thereto) and (III) the rights with respect to the Xxxxx
Fargo Servicing Agreement, as assigned to the Issuing Entity by the Assignment
Agreement; and (f) all present and future claims, demands, causes and choses
in
action in respect of any or all of the foregoing and all payments on or under,
and all proceeds of every kind and nature whatsoever in respect of, any or
all
of the foregoing and all payments on or under, and all proceeds of every kind
and nature whatsoever in the conversion thereof, voluntary or involuntary,
into
cash or other liquid property, all cash proceeds, accounts, accounts receivable,
notes, drafts, acceptances, checks, deposit accounts, rights to payment of
any
and every kind, and other forms of obligations and receivables, instruments
and
other property which at any time constitute all or part of or are included
in
the proceeds of any of the foregoing (collectively, the "Trust Estate" or the
"Collateral").
The
foregoing Grant is made in trust to secure the payment of principal of and
interest on, and any other amounts owing in respect of, the Notes, subject
to
the priority set forth herein, and to secure compliance with the provisions
of
this Indenture, all as provided in this Indenture.
The
Indenture Trustee, as trustee on behalf of the Holders of the Notes,
acknowledges such Xxxxx, accepts the trust under this Indenture in accordance
with the provisions hereof and each of the Indenture Trustee and the Securities
Administrator agree to perform their respective duties as Indenture Trustee
and
Securities Administrator as required herein.
In
connection with REMIC Conversion, the Issuing Entity, concurrently with the
execution and delivery of the new REMIC Class A Indenture and new Underlying
REMIC Trust Pooling and Servicing Agreement and the transfer by the Depositor
of
the same, shall transfer and assign to the Underlying REMIC Trust without
recourse all its right, title and interest in and to the Collateral then
remaining in the Trust Estate for the benefit of the holders of the REMIC
Certificates. At such time, the Issuing Entity shall also Grant to the Indenture
Trustee all of the Issuing Entity’s right, title and interest in and to the
REMIC Class A Certificates for the benefit of the holders of the REMIC Class
A
Notes and the new certificate then issued by the Issuing Entity representing
the
residual interest in the REMIC elected by the Issuing Entity. The Indenture
Trustee shall declare that it holds and will hold the same in trust for the
exclusive use and benefit of the holders of the REMIC Class A Notes and such
new
residual certificate.
ARTICLE
I
DEFINITIONS
Section
1.01 Definitions.
For all
purposes of this Indenture, 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 the Definitions
attached hereto as Appendix A which is incorporated by reference herein. All
other capitalized terms used herein shall have the meanings specified
herein.
Section
1.02 Incorporation
by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the Trust Indenture Act (the
“TIA”), the provision is incorporated by reference in and made a part of this
Indenture. The following TIA terms used in this Indenture have the following
meanings:
“Commission”
means the Securities and Exchange Commission.
“indenture
securities” means the Notes.
“indenture
security holder” means a Noteholder.
“indenture
to be qualified” means this Indenture.
“indenture
trustee” or “institutional trustee” means the Indenture Trustee.
“obligor”
on the indenture securities means the Issuing Entity and any other obligor
on
the indenture securities.
All
other
TIA terms used in this Indenture that are defined by the TIA, defined by TIA
reference to another statute or defined by Commission rules have the meanings
assigned to them by such definitions.
Section
1.03 Rules
of Construction.
Unless
the context otherwise requires:
(i) a
term
has the meaning assigned to it;
(ii) an
accounting term not otherwise defined has the meaning assigned to it in
accordance with generally accepted accounting principles as in effect from
time
to time;
(iii) “or”
is
not exclusive;
(iv) “including”
means including without limitation;
(v) words
in
the singular include the plural and words in the plural include the singular;
and
(vi) 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
ORIGINAL
ISSUANCE OF NOTES
Section
2.01 Form.
The
Class A-1, Class A-2, Class A-3, Class A-4, Class X, Class B-1, Class B-2,
Class
B-3, Class B-4, Class B-5 and Class B-6 Notes, together with the Securities
Administrator’s certificate of authentication, shall be in substantially the
form set forth in Exhibits A-1, A-2 and A-3 to this Indenture, respectively,
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture.
The
Notes
shall be typewritten, printed, lithographed or engraved or produced by any
combination of these methods (with or without steel engraved
borders).
The
terms
of the Notes set forth in Exhibits A-1, A-2 and A-3 to this Indenture are part
of the terms of this Indenture.
Section
2.02 Execution,
Authentication and Delivery.
The
Notes shall be executed on behalf of the Issuing Entity by any of its Authorized
Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
Notes
bearing the manual or facsimile signature of individuals who were at any time
Authorized Officers of the Issuing Entity shall bind the Issuing Entity,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
The
Securities Administrator shall upon Issuer Request authenticate and deliver
each
Class of Notes for original issue in an aggregate initial principal amount
equal
to the Initial Note Principal Balance or Initial Notional Amount, as applicable,
for such Class of Notes.
Each
of
the Notes shall be dated the date of its authentication. The Class A-1, Class
A-2, Class A-3 and Class A-4 Notes shall be issuable as registered Notes in
book-entry form and the Notes shall be issuable in the minimum initial Note
Principal Balances of $100,000 and in integral multiples of $1 in excess
thereof. The Class X Notes shall be issuable as registered Notes in physical
form and the Notes shall be issuable in the minimum initial Notional Amount
of
$100,000 and in integral multiples of $1 in excess thereof. The Class B-1,
Class
B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Notes shall be issuable
as
registered Notes in physical form and the Notes shall be issuable in the minimum
initial Note Principal Balances or Notional Amounts, as applicable, of $100,000
and in integral multiples of $1 in excess thereof.
No
Note
shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose, unless there appears on such Note a certificate of
authentication substantially in the form provided for herein executed by the
Securities Administrator by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
ARTICLE
III
COVENANTS
Section
3.01 Payment
Account.
(a)
On or
prior to the Closing Date, the Issuing Entity shall cause the Securities
Administrator to establish and maintain, in the name of the Securities
Administrator, for the benefit of the Noteholders and the Certificate Paying
Agent, on behalf of the Certificateholder, the Payment Account.
(b) The
Securities Administrator shall, subject to the terms of this paragraph, deposit
in the Payment Account, on the same day as it is received from the Master
Servicer, each remittance received by the Securities Administrator on each
Payment Date. On each Payment Date, the Securities Administrator shall
distribute all amounts on deposit in the Payment Account (other than amounts
payable to the Holder of the Trust Certificates) to Noteholders in respect
of
the Notes, and in its capacity as Certificate Paying Agent, to the
Certificateholder in the order of priority set forth in Section 3.03 (except
as
otherwise provided in Section 5.04(b)).
(c) All
monies deposited from time to time in the Payment Account pursuant to the Sale
and Servicing Agreement and all deposits therein pursuant to this Indenture
are
for the benefit of the Noteholders and the Certificate Paying Agent, on behalf
of the Certificateholder.
Section
3.02 Existence.
The
Issuing Entity will keep in full effect its existence, rights and franchises
as
a statutory trust under the laws of the State of Delaware (unless it becomes,
or
any successor Issuing Entity hereunder is or becomes, organized under the laws
of any other state or of the United States of America, in which case the Issuing
Entity will keep in full effect its existence, rights and franchises under
the
laws of such other jurisdiction) and will obtain and preserve its qualification
to do business in each jurisdiction in which such qualification is or shall
be
necessary to protect the validity and enforceability of this Indenture, the
Notes and each other instrument or agreement included in the Trust
Estate.
Section
3.03 Payment
of Principal and Interest.
(a) On
each Payment Date, the Securities Administrator shall withdraw from the Payment
Account the Available Funds for such Payment Date and make the following
disbursements and transfers in the order of priority set forth below, in each
case to the extent of Available Funds remaining for such Payment
Date:
| (I) |
| (A) |
first,
to the Class A-1, Class A-2, Class A-3 and Class A-4 Notes, on a
pro rata
basis, the Accrued Note Interest for each such Class for such Payment
Date;
|
| (B) |
second,
to the Class A-1, Class A-2, Class A-3 and Class A-4 Notes, in reduction
of the Note Principal Balances thereof, the Senior Optimal Principal
Amount for such Classes for such Payment Date, on a pro rata basis
based
on the Note Principal Balances thereof, until the Note Principal
Balances
thereof have been reduced to zero;
|
| (C) |
third,
to the Class A-1, Class A-2, Class A-3 and Class A-4 Notes, an amount
equal to any Carryover Shortfall Amounts on each such Class for such
Payment Date, on a pro rata basis based on the amount of Carryover
Shortfall Amounts for each such Class;
and
|
| (D) |
fourth,
to the Class A-1, Class A-2, Class A-3 and Class A-4 Notes, an amount
equal to any previously allocated Realized Losses, on a pro rata
basis
based on the amount of Realized Losses previously allocated to each
such
Class.
|
| (II) |
On
each Payment Date, the Available Funds remaining after the payments
made
in clause (I) above for such Payment Date shall be distributed as
follows:
|
| (A) |
first,
to the Class X Notes, in an amount equal to the Accrued Note Interest
on
such Class for such Payment Date (subject to Net Interest Shortfalls
allocated to such Class), to the extent of the remaining Interest
Funds
for such Payment Date;
|
| (B) |
second,
sequentially to the Class B-1, Class B-2, Class B-3, Class B-4, Class
B-5
and Class B-6 Notes, in that order, up to an amount equal to and
in the
following order with respect to each such Class: (a) the Accrued
Note
Interest thereon for such Payment Date (subject to Net Interest Shortfalls
allocated to such Class) to the extent of any remaining Interest
Funds for
such Payment Date; (b) any Accrued Note Interest thereon remaining
undistributed from previous Payment Dates, with accrued interest
thereon,
to the extent of any remaining Interest Funds for such Payment Date;
and
(c) such Class’s Allocable Share of the Subordinate Optimal Principal
Amount for such Payment Date, in each case to the extent of any remaining
Principal Funds and until the Note Principal Balance thereof has
been
reduced to zero; and
|
| (C) |
third,
to the Certificate Paying Agent for distribution to the Trust Certificate
as set forth in the Trust
Agreement.
|
(b) No
Accrued Note Interest will be payable with respect to any Class of Notes after
the Payment Date on which the Note Principal Balance or Notional Amount of
such
Note has been reduced to zero.
(c) [Reserved].
(d) Each
distribution with respect to a Book-Entry Note shall be paid to the Depository,
as Holder thereof, and the Depository shall be responsible for crediting the
amount of such distribution to the accounts of its Depository Participants
in
accordance with its normal procedures. Each Depository Participant shall be
responsible for disbursing such distribution to the Note Owners that it
represents and to each indirect participating brokerage firm (a “brokerage firm”
or “indirect participating firm”) for which it acts as agent. Each brokerage
firm shall be responsible for disbursing funds to the Note Owners that it
represents. None of the Securities Administrator, the Note Registrar, the Paying
Agent, the Depositor or the Master Servicer shall have any responsibility
therefor.
(e) On
each
Payment Date, the Certificate Paying Agent shall deposit in the Certificate
Distribution Account all amounts it received pursuant to this Section 3.03
for
the purpose of distributing such funds to the Certificateholders. The
Certificate Paying Agent shall make distributions to the Certificateholders
under the Trust Agreement as directed by the Securities Administrator
hereunder.
(f) Any
installment of interest or principal, if any, payable on any Note that is
punctually paid or duly provided for by the Issuing Entity on the applicable
Payment Date shall, if such Holder shall have so requested at least five
Business Days prior to the related Record Date, be paid to each Holder of record
on the preceding Record Date, by wire transfer to an account specified in
writing by such Holder as of the preceding Record Date or in all other cases
or
if no such instructions have been delivered to the Securities Administrator,
by
check to such Noteholder mailed to such Holder’s address as it appears in the
Note Register in the amount required to be distributed to such Holder on such
Payment Date pursuant to such Holder’s Notes; provided, however, that the
Securities Administrator shall not pay to such Holders any amount required
to be
withheld from a payment to such Holder by the Code.
(g) The
Note
Principal Balance of each Note shall be due and payable in full on the Final
Scheduled Payment Date for such Note as provided in the forms of Note set forth
in Exhibits A-1, A-2 and A-3 to this Indenture. All principal payments on the
Notes shall be made to the Noteholders entitled thereto in accordance with
the
Percentage Interests represented by such Notes. Upon notice to the Securities
Administrator by the Issuing Entity, the Securities Administrator shall notify
the Person in whose name a Note is registered at the close of business on the
Record Date preceding the Final Scheduled Payment Date or other final Payment
Date (including any final Payment Date resulting from any redemption pursuant
to
Section 8.06 hereof). Such notice shall to the extent practicable be mailed
no
later than five Business Days prior to such Final Scheduled Payment Date or
other final Payment Date and shall specify that payment of the principal amount
and any interest due with respect to such Note at the Final Scheduled Payment
Date or other final Payment Date will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for such final payment. No interest shall accrue
on
the Notes on or after the Final Scheduled Payment Date or any such other final
Payment Date.
Section
3.04 Protection
of Trust Estate.
(a)
The
Issuing Entity will from time to time prepare, execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(i) maintain
or preserve the lien and security interest (and the priority thereof) of this
Indenture or carry out more effectively the purposes hereof;
(ii) perfect,
publish notice of or protect the validity of any Grant made or to be made by
this Indenture;
(iii) cause
the Issuing Entity or the Indenture Trustee to enforce any of the rights to
the
Mortgage Loans;
or
(iv) preserve
and defend title to the Trust Estate and the rights of the Indenture Trustee
and
the Noteholders in such Trust Estate against the claims of all persons and
parties.
(b) Except
as
otherwise provided in this Indenture, the Indenture Trustee shall not remove
or
permit the Custodian to remove any portion of the Trust Estate that consists
of
money or is evidenced by an instrument, certificate or other writing from the
jurisdiction in which it was held at the date of the most recent Opinion of
Counsel delivered pursuant to Section 3.05 hereof (or from the jurisdiction
in
which it was held as described in the Opinion of Counsel delivered on the
Closing Date pursuant to Section 3.05(a) hereof, if no Opinion of Counsel has
yet been delivered pursuant to Section 3.05(b) hereof), unless the Indenture
Trustee shall have first received an Opinion of Counsel to the effect that
the
lien and security interest created by this Indenture with respect to such
property will continue to be maintained after giving effect to such action
or
actions.
The
Issuing Entity hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.04 upon the
Issuing Entity’s preparation thereof and delivery to the Indenture
Trustee.
Section
3.05 Opinions
as to Trust Estate.
(a)
On the
Closing Date, the Issuing Entity shall furnish to the Indenture Trustee and
the
Owner Trustee an Opinion of Counsel either stating that, in the opinion of
such
counsel, such action has been taken with respect to the recording and filing
of
this Indenture, any indentures supplemental hereto, and any other requisite
documents, and with respect to the execution and filing of any financing
statements and continuation statements, as are necessary to perfect and make
effective the lien and first priority security interest in the Collateral and
reciting the details of such action, or stating that, in the opinion of such
counsel, no such action is necessary to make such lien and first priority
security interest effective.
(b) On
or
before December 31st in each calendar year, beginning in 2007, the Issuing
Entity shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuing Entity either stating that, in the opinion of such
counsel, such action has been taken with respect to the recording, filing,
rerecording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and with respect to the execution and filing
of any financing statements and continuation statements as is necessary to
maintain the lien and security interest in the Collateral and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion
of
Counsel shall also describe the recording, filing, re-recording and refiling
of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Collateral until December
31
in the following calendar year.
Section
3.06 Performance
of Obligations.
(a)
The
Issuing Entity will punctually perform and observe all of its obligations and
agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Estate.
(b) The
Issuing Entity may contract with other Persons to assist it in performing its
duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer’s Certificate of the Issuing
Entity shall be deemed to be action taken by the Issuing Entity.
(c) The
Issuing Entity will not take any action or permit any action to be taken by
others which would release any Person from any of such Person’s covenants or
obligations under any of the documents relating to the Mortgage Loans or under
any instrument included in the Trust Estate, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any of the documents relating to the Mortgage
Loans or any such instrument, except such actions as the Master Servicer is
expressly permitted to take in the Xxxxx Fargo Servicing Agreement.
(d) The
Issuing Entity may retain an administrator and may enter into contracts with
other Persons for the performance of the Issuing Entity’s obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuing Entity.
Section
3.07 Negative
Covenants.
So long
as any Notes are Outstanding or the Majority Certificateholder owns 100% of
the
Securities, the Issuing Entity shall not:
(i) except
as
expressly permitted by this Indenture, sell, transfer, exchange or otherwise
dispose of the Trust Estate.
(ii) claim
any
credit on, or make any deduction from the principal or interest payable in
respect of, the Notes (other than amounts properly withheld from such payments
under the Code) or assert any claim against any present or former Noteholder,
by
reason of the payment of the taxes levied or assessed upon any part of the
Trust
Estate;
(iii) (A)
permit the validity or effectiveness of this Indenture to be impaired, or permit
the lien of this Indenture to be amended, hypothecated, subordinated, terminated
or discharged, or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise, claim, security
interest, mortgage or other encumbrance (other than the lien of this Indenture)
to be created on or extend to or otherwise arise upon or burden the Trust Estate
or any part thereof or any interest therein or the proceeds thereof or (C)
permit the lien of this Indenture not to constitute a valid first priority
security interest in the Trust Estate; or
(iv) waive
or
impair, or fail to assert rights under, the Mortgage Loans, or impair or cause
to be impaired the Issuing Entity’s interest in the Mortgage Loans, the Mortgage
Loan Purchase Agreement or in any Basic Document, if any such action would
materially and adversely affect the interests of the Noteholders.
Section
3.08 Annual
Statement as to Compliance.
The
Issuing Entity will deliver to the Indenture Trustee, by March 1 of each year
commencing with the calendar year 2007, an Officer’s Certificate stating, as to
the Authorized Officer signing such Officer’s Certificate, that:
(i) a
review
of the activities of the Issuing Entity during the previous calendar year and
of
its performance under this Indenture and the Trust Agreement has been made
under
such Authorized Officer’s supervision; and
(ii) to
the
best of such Authorized Officer’s knowledge, based on such review, the Issuing
Entity has complied with all conditions and covenants under this Indenture
and
the provisions of the Trust Agreement throughout such year, or, if there has
been a default in its compliance with any such condition or covenant, specifying
each such default known to such Authorized Officer and the nature and status
thereof.
Section
3.09 [Reserved].
Section
3.10 Representations
and Warranties Concerning the Mortgage Loans.
The
Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the
representations and warranties made by the Mortgage Loan Seller in the Loan
Sale
Agreement concerning the Mortgage Loan Seller and Xxxxx Fargo, as Seller under
the Xxxxx Fargo Servicing Agreement, and the Mortgage Loans to the same extent
as though such representations and warranties were made directly to the
Indenture Trustee. If a Responsible Officer of the Indenture Trustee has actual
knowledge of any breach of any representation or warranty made by the Mortgage
Loan Seller in the Loan Sale Agreement, the Indenture Trustee shall promptly
notify the Mortgage Loan Seller, or Xxxxx Fargo in the alternative, of such
finding and of the Mortgage Loan Seller’s or Xxxxx Fargo’s obligation, as
applicable, to cure such defect or repurchase or substitute for the related
Mortgage Loan.
Section
3.11 Investment
Company Act.
The
Issuing Entity shall not become an “investment company” or be under the
“control” of an “investment company” as such terms are defined in the Investment
Company Act of 1940, as amended (or any successor or amendatory statute), and
the rules and regulations thereunder (taking into account not only the general
definition of the term “investment company” but also any available exceptions to
such general definition); provided, however, that the Issuing Entity shall
be in
compliance with this Section 3.11 if it shall have obtained an order exempting
it from regulation as an “investment company” so long as it is in compliance
with the conditions imposed in such order.
Section
3.12 Issuing
Entity May Consolidate, etc.
(a)
The
Issuing Entity shall not consolidate or merge with or into any other Person,
unless:
(i) the
Person (if other than the Issuing Entity) formed by or surviving such
consolidation or merger shall be a Person organized and existing under the
laws
of the United States of America or any state or the District of Columbia and
shall expressly assume, by an indenture supplemental hereto, executed and
delivered to the Indenture Trustee, in form reasonably satisfactory to the
Indenture Trustee, the due and punctual payment of the principal of and interest
on all Notes, and all amounts payable to the Indenture Trustee and the
Securities Administrator, the payment to the Certificate Paying Agent of all
amounts due to the Certificateholders, and the performance or observance of
every agreement and covenant of this Indenture on the part of the Issuing Entity
to be performed or observed, all as provided herein;
(ii) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing;
(iii) each
of
the Rating Agencies shall have notified the Issuing Entity that such transaction
shall not cause the rating of the Notes to be reduced, qualified, suspended
or
withdrawn or to be considered by either Rating Agency to be below investment
grade;
(iv) the
Issuing Entity shall have received an Opinion of Counsel (and shall have
delivered a copy thereof to the Indenture Trustee and the Securities
Administrator) to the effect that such transaction will not (A) result in a
“significant modification” of the Class A-1, Class A-2, Class A-3 and Class A-4
Notes or any other classes of Notes with respect to which a “will be debt”
opinion has been rendered by nationally recognized tax counsel and furnished
to
the Securities Administrator under Treasury Regulation Section 1.1001-3, or
adversely affect the indebtedness status of such Notes and (B) cause the Trust
to be subject to an entity level tax for federal income tax
purposes;
(v) any
action that is necessary to maintain the lien and security interest created
by
this Indenture shall have been taken;
(vi) the
Issuing Entity shall have delivered to the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel each stating that such consolidation
or
merger and such supplemental indenture comply with this Article III and that
all
conditions precedent herein provided for or relating to such transaction have
been complied with (including any filing required by the Exchange Act), and
that
such supplemental indenture is enforceable.
(b) The
Issuing Entity shall not convey or transfer any of its properties or assets,
including those included in the Trust Estate, to any Person,
unless:
(1) such
conveyance or transfer is made in connection with a REMIC Conversion or
(2) the
following conditions are satisfied:
(i) the
Person that acquires by conveyance or transfer the properties and assets of
the
Issuing Entity, the conveyance or transfer of which is hereby restricted, shall
(A) be a United States citizen or a Person organized and existing under the
laws
of the United States of America or any state thereof, (B) expressly assume,
by
an indenture supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the part of
the
Issuing Entity to be performed or observed, all as provided herein, (C)
expressly agree by means of such supplemental indenture that all right, title
and interest so conveyed or transferred shall be subject and subordinate to
the
rights of the Holders of the Notes, (D) unless otherwise provided in such
supplemental indenture, expressly agree to indemnify, defend and hold harmless
the Issuing Entity and the Indenture Trustee against and from any loss,
liability or expense arising under or related to this Indenture and the Notes
and (E) expressly agree by means of such supplemental indenture that such Person
(or if a group of Persons, then one specified Person) shall make all filings
with the Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately
after giving effect to such transaction, no Default or Event of Default shall
have occurred and be continuing;
(iii) each
of
the Rating Agencies shall have notified the Issuing Entity that such transaction
shall not cause the ratings of the Notes to be reduced, qualified, suspended
or
withdrawn;
(iv) the
Issuing Entity shall have received an Opinion of Counsel (and shall have
delivered a copy thereof to the Indenture Trustee) to the effect that such
transaction will not (A) result in a “significant modification” of the Class
A-1, Class A-2, Class A-3 and Class A-4 Notes or any other Classes of Notes
with
respect to which a “will be debt” opinion has been rendered by nationally
recognized tax counsel and furnished to the Securities Administrator under
Treasury Regulation Section 1.1001-3, or adversely affect the indebtedness
status of such Notes, and (B) cause the Trust to be subject to an entity level
tax for federal income tax purposes;
(v) any
action that is necessary to maintain the lien and security interest created
by
this Indenture shall have been taken; and
(vi) the
Issuing Entity shall have delivered to the Indenture Trustee an Officer’s
Certificate and an Opinion of Counsel each stating that such conveyance or
transfer and such supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange
Act).
Section
3.13 Successor
or Transferee.
(a)
Upon any
consolidation or merger of the Issuing Entity in accordance with Section
3.12(a), the Person formed by or surviving such consolidation or merger (if
other than the Issuing Entity) shall, following the Issuing Entity’s
satisfaction of all of the conditions precedent set forth therein with respect
thereto, succeed to, and be substituted for, and may exercise every right and
power of, the Issuing Entity under this Indenture with the same effect as if
such Person had been named as the Issuing Entity herein.
(b) Upon
a
conveyance or transfer of all the assets and properties of the Issuing Entity
pursuant to Section 3.12(b), the Issuing Entity, following its satisfaction
of
all of the conditions precedent set forth herein with respect thereto, will
be
released from every covenant and agreement of this Indenture to be observed
or
performed on the part of the Issuing Entity with respect to the Notes
immediately upon the delivery of written notice to the Indenture Trustee of
such
conveyance or transfer.
Section
3.14 No
Other Business.
The
Issuing Entity shall not engage in any business other than as set forth with
respect thereto in the Trust Agreement and other than financing, purchasing,
owning and selling and managing the Mortgage Loans and the issuance of the
Certificates in the manner contemplated by this Indenture and the Basic
Documents and all activities incidental thereto.
Section
3.15 No
Borrowing.
The
Issuing Entity shall not issue, incur, assume, guarantee or otherwise become
liable, directly or indirectly, for any indebtedness except for the Notes under
this Indenture.
Section
3.16 Guarantees,
Loans, Monthly Advances and Other Liabilities.
Except
as contemplated by this Indenture or the Basic Documents, the Issuing Entity
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another’s payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
Section
3.17 Capital
Expenditures.
The
Issuing Entity shall not make any expenditure (by long-term or operating lease
or otherwise) for capital assets (either realty or personalty).
Section
3.18 Determination
of Note Index.
Annually,
on each Interest Determination Date, the Securities Administrator will determine
the One-Year U.S. Treasury Note Index for the next Interest Accrual Period
for
the Class A-1, Class A-2, Class A-3 and Class A-4 Notes.
The
establishment of the One-Year U.S. Treasury Note Index on each Interest
Determination Date by the Securities Administrator and the Securities
Administrator’s calculation of the rate of interest applicable to the Notes for
the related Interest Accrual Period shall (in the absence of manifest error)
be
final and binding.
Section
3.19 Restricted
Payments.
The
Issuing Entity shall not, directly or indirectly, (i) pay any dividend or make
any distribution (by reduction of capital or otherwise), whether in cash,
property, securities or a combination thereof, to the Owner Trustee or any
owner
of a beneficial interest in the Issuing Entity or otherwise with respect to
any
ownership or equity interest or security in or of the Issuing Entity, (ii)
redeem, purchase, retire or otherwise acquire for value any such ownership
or
equity interest or security or (iii) set aside or otherwise segregate any
amounts for any such purpose; provided, however, that the Issuing Entity may
make, or cause to be made, (x) distributions and payments to the Owner Trustee,
the Indenture Trustee, the Securities Administrator, the Master Servicer, the
Servicer, the Certificate Registrar, the Certificate Paying Agent, the
Noteholders and the Certificateholders as contemplated by, and to the extent
funds are available for such purpose under this Indenture and the Basic
Documents and (y) payments to the Master Servicer pursuant to the Sale and
Servicing Agreement and the Servicer pursuant to the terms of the Xxxxx Fargo
Servicing Agreement. The Issuing Entity will not, directly or indirectly, make
payments to or distributions from the Master Servicer Collection Account or
the
Payment Account except in accordance with this Indenture and the Basic
Documents.
Section
3.20 Notice
of Events of Default.
The
Issuing Entity shall give the Indenture Trustee, the Securities Administrator
and each Rating Agency prompt written notice of each Event of Default
hereunder.
Section
3.21 Further
Instruments and Acts.
Upon
request of the Indenture Trustee, the Issuing Entity will execute and deliver
such further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purpose of this
Indenture.
Section
3.22 Reserved.
Section
3.23 Certain
Representations Regarding the Trust Estate.
(a) With
respect to that portion of the Collateral described in clauses (a) through
(c)
of the definition of Trust Estate, the Issuing Entity represents to the
Indenture Trustee that:
(i) This
Indenture creates a valid and continuing security interest (as defined in the
applicable UCC) in the Collateral in favor of the Indenture Trustee, which
security interest is prior to all other liens, and is enforceable as such as
against creditors of and purchasers from the Issuing Entity.
(ii) The
Collateral constitutes “deposit accounts,” “instruments” or “certificated
securities,” as applicable within the meaning of the applicable
UCC.
(iii) The
Issuing Entity owns and has good and marketable title to the Collateral, free
and clear of any lien, claim or encumbrance of any Person.
(iv) The
Issuing Entity has caused or will have caused, within ten days of the Closing
Date, the filing of all appropriate financing statements in the proper filing
office in the appropriate jurisdictions under applicable law in order to perfect
the security interest in the Collateral granted to the Indenture Trustee
hereunder.
(v) Other
than the security interest granted to the Indenture Trustee pursuant to this
Indenture, or the conveyances that the Issuing Entity would be required to
make
at the time of a REMIC Conversion, the Issuing Entity has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Collateral. The Issuing Entity has not authorized the filing of and is not
aware
of any financing statements against the Issuing Entity that include a
description of collateral covering the Collateral other than any financing
statement relating to the security interest granted to the Indenture Trustee
hereunder or that has been terminated.
(vi) The
Collateral is not in the name of any Person other than the Issuing Entity or
the
Indenture Trustee. The Issuing Entity has in its possession all original copies
of the security certificates that constitute or evidence the Collateral. The
security certificates that constitute or evidence the Collateral do not have
any
marks or notations indicating that they have been pledged, assigned or otherwise
conveyed to any Person other than the Indenture Trustee. The Issuing Entity
has
not consented to the bank maintaining the Collateral to comply with instructions
of any Person other than the Indenture Trustee.
(vii) The
foregoing representations may not be waived and shall survive the issuance
of
the Notes.
Section
3.24 Allocation
of Realized Losses.
(a)
On or
prior to each Payment Date, the Master Servicer shall determine, based solely
on
information provided to it by the Servicer the amount of any Realized Loss
in
respect of each Mortgage Loan that occurred during the immediately preceding
calendar month.
(b) With
respect to any Notes (other than the Class X Notes) on any Payment Date, the
principal portion of each Realized Loss on a Mortgage Loan shall be allocated
as
follows:
first,
to the
Class B-6 Notes until the Note Principal Balance thereof has been reduced to
zero;
second,
to the
Class B-5 Notes until the Note Principal Balance thereof has been reduced to
zero;
third,
to the
Class B-4 Notes until the Note Principal Balance thereof has been reduced to
zero;
fourth,
to the
Class B-3 Notes until the Note Principal Balance thereof has been reduced to
zero;
fifth,
to the
Class B-2 Notes until the Note Principal Balance thereof has been reduced to
zero;
sixth,
to the
Class B-1 Notes until the Note Principal Balance thereof has been reduced to
zero;
seventh,
to the
Class A-4 Notes until the Note Principal Balance thereof has been reduced to
zero; and
eighth,
to the
Class A-1, Class A-2 and Class A-3 Notes, pro rata, in each case until the
Note
Principal Balance thereof has been reduced to zero, provided, however, that
any
Realized Losses otherwise allocable to the Class A-2 Notes will be allocated
to
the Class A-3 Notes until the Note Principal Balance thereof has been reduced
to
zero.
(c) Notwithstanding
the foregoing clause (b), no such allocation of any Realized Loss shall be
made
on a Payment Date to any Class or Classes of Notes to the extent that such
allocation would result in the reduction of the aggregate Note Principal Balance
of all of the Classes of Notes as of such Payment Date, after giving effect
to
all distributions and prior allocations of Realized Losses on such date, to
an
amount less than the aggregate Scheduled Principal Balance of the Mortgage
Loans
as of the related Due Date (such limitation, the “Loss Allocation
Limitation”).
(d) The
principal portion of any Realized Losses allocated to a Class of Notes shall
be
allocated among the Notes of such Class (other than the Class X Notes) in
proportion to their respective Note Principal Balances. Any allocation of
Realized Losses shall be accomplished by reducing the Note Principal Balance
of
the Notes on the related Payment Date.
(e) Realized
Losses shall be allocated on the Payment Date in the month following the month
in which such loss was incurred and, in the case of the principal portion
thereof, after giving effect to distributions made on such Payment
Date.
(f) On
each
Payment Date, the Securities Administrator shall determine the Subordinate
Writedown Amount. Any such Subordinate Writedown Amount shall effect a
corresponding reduction in the Note Principal Balance of (i) with respect to
the
Subordinate Writedown Amount, if prior to the Cross-Over Date, the Class B-6,
Class B-5, Class B-4, Class B-3, Class B-2 and Class B-1 Notes, in that order,
and (ii) from and after the Cross-Over Date, to the Senior Notes, in accordance
with priorities set forth in clause (b) above, in each case, on such Payment
Date after giving effect to distributions made on such Payment
Date.
(g) The
interest portion of any Realized Losses with respect to the Mortgage Loans
occurring on or prior to the Cross-Over Date will be borne sequentially to
the
Class B-6, Class B-5, Class B-4, Class B-3, Class B-2, Class B-1 and Class
X
Notes, in that order. Once the aggregate Note Principal Balance or Notional
Amount, as applicable, of the Subordinate Notes have been reduced to zero,
the
interest portion of Realized Losses on the Mortgage Loans will be allocated
first to the Class A-4 Notes and then to the Class A-1, Class A-2 and Class
A-3
Notes, pro rata, in each case in reduction Accrued Note Interest on such Class;
provided, however, any Realized Losses otherwise allocable to the Class A-2
Notes will first be allocated to the Class A-3 Notes until the Note Principal
Balance thereof is reduced to zero.
(h) In
addition, in the event that the Securities Administrator receives any Subsequent
Recoveries from the Servicer or Master Servicer, the Securities Administrator
shall deposit such funds into the Payment Account pursuant to Section 3.01
of
this Indenture. If, after taking into account such Subsequent Recoveries, the
amount of a Realized Loss is reduced, the amount of such Subsequent Recoveries
will be applied to increase the Note Principal Balance of the Notes with the
highest payment priority to which Realized Losses have been allocated, but
not
by more than the amount of Realized Losses previously allocated to that Class
or
Classes of Notes pursuant to this Section 3.24. The amount of any Subsequent
Recoveries following the application set forth in the immediately preceding
sentence will be applied to sequentially increase the Note Principal Balance
of
the Notes, beginning with the Class of Notes with the next highest payment
priority, up to the amount of such Realized Losses previously allocated to
such
Class or Classes of Notes pursuant to this Section 3.24. Holders of such Notes
will not be entitled to any payments in respect of Accrued Note Interest on
the
amount of such increases for any Interest Accrual Period preceding the Payment
Date on which such increase occurs. Any such increases shall be applied to
the
Note Principal Balance of the Notes of such Class in accordance with its
respective Percentage Interest.
Section
3.25 Permitted
Withdrawals and Transfers from the Payment Account.
(a)
The
Securities Administrator will, from time to time on demand of the Master
Servicer, make or cause to be made such withdrawals or transfers from the
Payment Account as the Master Servicer has designated for such transfer or
withdrawal pursuant to the Sale and Servicing Agreement or as the Securities
Administrator has instructed hereunder for the following purposes (limited
in
the case of amounts due the Master Servicer to those not withdrawn from the
Master Servicer Collection Account) but not in any order of
priority:
(i) to
reimburse the Master Servicer or the Servicer for any Monthly Advance of its
own
funds, the right of the Master Servicer or the Servicer to reimbursement
pursuant to this subclause (i) being limited to amounts received on a particular
Mortgage Loan (including, for this purpose, the Repurchase Price therefor,
Insurance Proceeds and Liquidation Proceeds) which represent late payments
or
recoveries of the principal of or interest on such Mortgage Loan respecting
which such Monthly Advance was made;
(ii) to
reimburse the Master Servicer or the Servicer from Insurance Proceeds or
Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended
by the Master Servicer or such Servicer in good faith in connection with the
restoration of the related Mortgaged Property which was damaged by an Uninsured
Cause or in connection with the liquidation of such Mortgage Loan;
(iii) to
reimburse the Master Servicer or the Servicer from Insurance Proceeds relating
to a particular Mortgage Loan for insured expenses incurred with respect to
such
Mortgage Loan and to reimburse the Master Servicer or the Servicer from
Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses
incurred with respect to such Mortgage Loan; provided that the Master Servicer
shall not be entitled to reimbursement for Liquidation Expenses with respect
to
a Mortgage Loan to the extent that (i) any amounts with respect to such Mortgage
Loan were paid as Excess Liquidation Proceeds pursuant to clause (viii) of
this
Subsection 3.25 (a) to the Master Servicer; and (ii) such Liquidation Expenses
were not included in the computation of such Excess Liquidation
Proceeds;
(iv) to
reimburse the Master Servicer or the Servicer for advances of funds (other
than
Monthly Advances) made with respect to the Mortgage Loans, and the right to
reimbursement pursuant to this subclause being limited to amounts received
on
the related Mortgage Loan (including, for this purpose, the Repurchase Price
therefor, Insurance Proceeds and Liquidation Proceeds) which represent late
recoveries of the payments for which such advances were made;
(v) to
reimburse the Master Servicer or the Servicer for any Monthly Advance or
advance, after a Realized Loss has been allocated with respect to the related
Mortgage Loan if the Monthly Advance or advance has not been reimbursed pursuant
to clauses (i) and (iv);
(vi) to
pay
the Master Servicer as set forth in Section 3.13 of the Sale and Servicing
Agreement; provided however, that the Master Servicer shall be obligated to
pay
from its own funds any amounts which it is required to pay under Section 5.03
of
the Sale and Servicing Agreement;
(vii) to
reimburse the Master Servicer for expenses, costs and liabilities incurred by
and reimbursable to it pursuant to Sections 3.02, 5.04(c) and (d) of the Sale
and Servicing Agreement, to the extent that the Master Servicer has not already
reimbursed itself for such amounts from the Master Servicer Collection
Account;
(viii) to
pay to
the Master Servicer, as additional servicing compensation, any Excess
Liquidation Proceeds to the extent not retained by the Servicer;
(ix) to
reimburse or pay the Servicer any such amounts as are due thereto under the
Xxxxx Fargo Servicing Agreement and have not been retained by or paid to the
Servicer, to the extent provided in the Xxxxx Fargo Servicing Agreement;
(x) to
reimburse or pay the Indenture Trustee, the Owner Trustee, the Securities
Administrator and the Master Servicer any amounts due or expenses, costs and
liabilities incurred by or reimbursable to such Persons pursuant to this
Indenture or any other Basic Documents, to the extent such amounts have not
already been previously paid or reimbursed to such party from the Master
Servicer Collection Account;
(xi) to
remove
amounts deposited in error; and
(xii)
to pay
to the Holder of the Trust Certificates any investment income due and payable
to
it pursuant to this Indenture.
ARTICLE
IV
THE
NOTES; SATISFACTION AND DISCHARGE OF INDENTURE
Section
4.01 The
Notes.
Each
Class of Class A-1, Class A-2, Class A-3 and Class A-4 Notes shall be registered
in the name of a nominee designated by the Depository. Beneficial Owners will
hold interests in the Class A-1, Class A-2, Class A-3 and Class A-4 Notes
through the book-entry facilities of the Depository in minimum initial Note
Principal Balances of $100,000 and integral multiples of $1 in excess thereof.
Registered Holders will hold interests in the Class X Notes in physical form
in
minimum initial Notional Amount of $100,000 and integral multiples of $1 in
excess thereof. Registered Holders will hold interests in the Class X, Class
B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Notes in physical
form in minimum initial Note Principal Balances of $100,000 and integral
multiples of $1 in excess thereof.
The
Indenture Trustee and Securities Administrator may for all purposes (including
the making of payments due on the Notes) deal with the Depository as the
authorized representative of the Beneficial Owners with respect to the Notes
for
the purposes of exercising the rights of Holders of the Notes hereunder. Except
as provided in the next succeeding paragraph of this Section 4.01, the rights
of
Beneficial Owners with respect to the Notes shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08
hereof, Beneficial Owners shall not be entitled to definitive certificates
for
the Notes as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Notes shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners.
The
Securities Administrator may establish a reasonable record date in connection
with solicitations of consents from or voting by Noteholders and give notice
to
the Depository of such record date. Without the consent of the Issuing Entity
and the Securities Administrator, no Note may be transferred by the Depository
except to a successor Xxxxxxxxxx that agrees to hold such Note for the account
of the Beneficial Owners.
In
the
event the Depository Trust Company resigns or is removed as Depository, the
Depositor may appoint a successor Depository. If no successor Depository has
been appointed within 30 days of the effective date of the Depository’s
resignation or removal, each Beneficial Owner shall be entitled to certificates
representing the Notes it beneficially owns in the manner prescribed in Section
4.08.
The
Notes
shall, on original issue, be executed on behalf of the Issuing Entity by the
Owner Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated by the Securities Administrator and delivered by the Securities
Administrator to or upon the order of the Issuing Entity.
Section
4.02 Registration
of and Limitations on Transfer and Exchange of Notes; Appointment of Note
Registrar and Certificate Registrar.
The
Issuing Entity shall cause to be kept at the Corporate Trust Office of the
Securities Administrator a Note Register in which, subject to such reasonable
regulations as it may prescribe, the Note Registrar shall provide for the
registration of Notes and of transfers and exchanges of Notes as herein
provided.
Subject
to the restrictions and limitations set forth below, upon surrender for
registration of transfer of any Note at the Corporate Trust Office of the
Securities Administrator, the Issuing Entity shall execute and the Note
Registrar shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes in authorized initial Note
Principal Balances evidencing the same Class and aggregate Percentage
Interests.
No
transfer, sale, pledge or other disposition of any Privately Offered Note or
interest therein shall be made unless that transfer, sale, pledge or other
disposition is exempt from the registration and/or qualification requirements
of
the Securities Act and any applicable state securities laws, or is otherwise
made in accordance with the Securities Act and such state securities laws.
If a
transfer of any Privately Offered Note is to be made without registration under
the Securities Act (other than in connection with the initial issuance thereof
or a transfer thereof to the Depositor or one of its Affiliates), then the
Note
Registrar shall refuse to register such transfer unless (i) it receives (and
upon receipt, may conclusively rely upon) a certificate substantially in the
form attached as Exhibit C hereto (provided, however, that in the case of the
Book-Entry Notes, the Noteholder and the Noteholder’s prospective transferee
will be deemed to have made the representations set forth in such certification)
or (ii) (a) it receives a written Opinion of Counsel acceptable to and in form
and substance satisfactory to the Note Registrar, the Securities Administrator
and the Indenture Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from
the
Securities Act and any applicable state securities laws or is being made
pursuant to the Securities Act and any applicable state securities laws, which
Opinion of Counsel shall not be an expense of the Issuing Entity, the
Mortgage Loan Seller, the
Seller, the Owner Trustee, the Indenture Trustee, the Securities Administrator,
the Master Servicer or any Servicer and (b) the transferee executes a
representation letter, substantially in the form of Exhibit D attached hereto,
and transferor executes a representation letter, substantially in the form
of
Exhibit E hereto, each acceptable to and in form and substance satisfactory
to
the Note Registrar, the Securities Administrator and the Indenture Trustee
certifying the facts surrounding such transfer, which representation letters
shall not be an expense of the Issuing Entity, the Mortgage Loan Seller, the
Seller, the Owner Trustee, the Indenture Trustee, the Securities Administrator,
the Master Servicer or any Servicer. None of the Issuing Entity, the Depositor,
the Indenture Trustee, the Securities Administrator or the Note Registrar is
obligated to register or qualify any Notes under the Securities Act or any
other
securities law or to take any action not otherwise required under this Indenture
to permit the transfer of any Note or interest therein without registration
or
qualification. Any Noteholder desiring to effect a transfer of Notes or
interests therein shall, and does hereby agree to, indemnify the Issuing Entity,
the Depositor, the Owner Trustee, the Indenture Trustee, the Securities
Administrator and the Note Registrar 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 or in accordance with any restrictions on transfer set forth in
this
Indenture. Notwithstanding the foregoing, the provisions of this paragraph
shall
not apply to the initial transfer of the Notes by the Depositor or any Affiliate
thereof.
Prior
to
a REMIC Conversion, no transfer, sale, pledge or other disposition of any
Privately Offered Notes shall be made, and the Note Registrar shall refuse
to
register any such transfer, sale, pledge or other disposition, unless the
proposed transferee shall have delivered to the Owner Trustee, the Note
Registrar, the Securities Administrator and the Indenture Trustee a certificate
substantially in the form of Exhibit F hereto certifying that, following such
transfer, it will be a Single Owner. In connection with a REMIC Conversion,
all
of the Notes shall be transferred to the trustee under the Underlying REMIC
Pooling and Servicing Agreement in exchange for the corresponding REMIC Class
A
Notes and REMIC Privately Offered Certificates. Notwithstanding the foregoing,
any Privately Offered Notes may be pledged to secure indebtedness and may be
the
subject of repurchase agreements treated by the Single Owner as secured
indebtedness for federal income tax purposes, provided that, for the avoidance
of doubt, none of the Privately Offered Notes may be transferred by the related
lender under any such indebtedness or repurchase agreement upon a default under
such indebtedness or agreement except in accordance with the
foregoing.
Subject
to the foregoing and Section 4.08, Notes may be exchanged for other Notes of
like tenor and in authorized initial Note Principal Balances evidencing the
same
Class and aggregate Percentage Interests upon surrender of the Notes to be
exchanged at the Corporate Trust Office of the Note Registrar. Whenever any
Notes are so surrendered for exchange, the Issuing Entity shall execute and
the
Securities Administrator shall authenticate and deliver the Notes which the
Noteholder making the exchange such Noteholder is entitled to receive. Each
Note
presented or surrendered for registration of transfer or exchange shall (if
so
required by the Note Registrar) be duly endorsed by, or be accompanied by a
written instrument of transfer in form reasonably satisfactory to the Note
Registrar duly executed by the Holder thereof or his attorney duly authorized
in
writing with such signature guaranteed by a commercial bank or trust company
located or having a correspondent located in the city of New York. Notes
delivered upon any such transfer or exchange will evidence the same obligations,
and will be entitled to the same rights and privileges, as the Notes
surrendered.
Subject
to the foregoing and Section 4.08, in connection with a REMIC Conversion, each
Noteholder shall surrender all of its Notes to the Indenture Trustee and
exchanged for other Notes of like tenor and in authorized initial Note Principal
Balances evidencing the same Class and aggregate Percentage Interests upon
surrender of the Notes to be exchanged at the Corporate Trust Office of the
Note
Registrar. Whenever any Notes are so surrendered for exchange, the Issuing
Entity shall execute and the Securities Administrator shall authenticate and
deliver the Notes which the Noteholder making the exchange such Noteholder
is
entitled to receive. Each Note presented or surrendered for registration of
transfer or exchange shall (if so required by the Note Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer in form
reasonably satisfactory to the Note Registrar duly executed by the Holder
thereof or his attorney duly authorized in writing with such signature
guaranteed by a commercial bank or trust company located or having a
correspondent located in the city of New York. Notes delivered upon any such
transfer or exchange will evidence the same obligations, and will be entitled
to
the same rights and privileges, as the Notes surrendered.
No
service charge shall be made for any registration of transfer or exchange of
Notes, but the Note Registrar shall require payment of a sum sufficient to
cover
any tax or governmental charge that may be imposed in connection with any
registration of transfer or exchange of Notes.
The
Issuing Entity hereby appoints the Securities Administrator as (i) Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.08 of the Trust Agreement 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 thereof pursuant
to
Section 3.04 of the Trust Agreement and (ii) Note Registrar under this
Indenture. The Securities Administrator hereby accepts such
appointments.
Section
4.03 Mutilated,
Destroyed, Lost or Stolen Notes.
If (i)
any mutilated Note is surrendered to the Securities Administrator, or the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Securities Administrator such security or indemnity as may be required by it
to
hold the Issuing Entity and the Securities Administrator harmless, then, in
the
absence of notice to the Issuing Entity, the Note Registrar or the Securities
Administrator that such Note has been acquired by a bona fide purchaser, and
provided that the requirements of Section 8-405 of the UCC are met, the Issuing
Entity shall execute, and upon its request the Securities Administrator shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note; provided, however, that
if
any such destroyed, lost or stolen Note, but not a mutilated Note, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Note, the Issuing Entity may pay such destroyed, lost or stolen
Note
when so due or payable without surrender thereof. If, after the delivery of
such
replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the
proviso to the preceding sentence, a bona fide purchaser of the original Note
in
lieu of which such replacement Note was issued presents for payment such
original Note, the Issuing Entity and the Securities Administrator shall be
entitled to recover such replacement Note (or such payment) from the Person
to
whom it was delivered or any Person taking such replacement Note from such
Person to whom such replacement Note was delivered or any assignee of such
Person, except a bona fide purchaser, and shall be entitled to recover upon
the
security or indemnity provided therefor to the extent of any loss, damage,
cost
or expense incurred by the Issuing Entity, the Indenture Trustee or the
Securities Administrator in connection therewith.
Upon
the
issuance of any replacement Note under this Section 4.03, the Issuing Entity
may
require the payment by the Holder of such Note of a sum sufficient to cover
any
tax or other governmental charge that may be imposed in relation thereto and
any
other reasonable expenses (including the fees and expenses of the Securities
Administrator) connected therewith.
Every
replacement Note issued pursuant to this Section 4.03 in replacement of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuing Entity, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable
by
anyone, and shall be entitled to all the benefits of this Indenture equally
and
proportionately with any and all other Notes duly issued hereunder.
The
provisions of this Section 4.03 are exclusive and shall preclude (to the extent
lawful) all other rights and remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes.
Section
4.04 Persons
Deemed Owners.
Prior
to due presentment for registration of transfer of any Note, the Issuing Entity,
the Securities Administrator, the Paying Agent and any agent of the Issuing
Entity or the Securities Administrator or the Paying Agent may treat the Person
in whose name any Note is registered (as of the day of determination) as the
owner of such Note for the purpose of receiving payments of principal of and
interest, if any, on such Note and for all other purposes whatsoever, whether
or
not such Note be overdue, and none of the Issuing Entity, the Indenture Trustee,
the Securities Administrator, the Paying Agent or any agent of the Issuing
Entity, the Securities Administrator, the Indenture Trustee or the Paying Agent
shall be affected by notice to the contrary.
Section
4.05 Cancellation.
All
Notes surrendered for payment, registration of transfer, exchange or redemption
shall, if surrendered to any Person other than the Securities Administrator,
be
delivered to the Securities Administrator and shall be promptly cancelled by
the
Securities Administrator. The Issuing Entity may at any time deliver to the
Securities Administrator for cancellation any Notes previously authenticated
and
delivered hereunder which the Issuing Entity may have acquired in any manner
whatsoever, and all Notes so delivered shall be promptly cancelled by the
Securities Administrator. No Notes shall be authenticated in lieu of or in
exchange for any Notes cancelled as provided in this Section 4.05, except as
expressly permitted by this Indenture. All cancelled Notes may be held or
disposed of by the Securities Administrator in accordance with its standard
retention or disposal policy as in effect at the time unless the Issuing Entity
shall direct by an Issuer Request that they be destroyed or returned to it;
provided, however, that such Issuer Request is timely and the Notes have not
been previously disposed of by the Securities Administrator.
Section
4.06 Book-Entry
Notes.
The
Class A-1, Class A-2, Class A-3 and Class A-4 Notes, upon original issuance,
will be issued in the form of typewritten Notes representing the Book-Entry
Notes, to be delivered to The Depository Trust Company, the initial Depository,
by, or on behalf of, the Issuing Entity. The Notes shall initially be registered
on the Note Register in the name of Cede & Co., the nominee of the initial
Depository, and no Beneficial Owner will receive a Definitive Note representing
such Beneficial Owner’s interest in such Note, except as provided in Section
4.08. With respect to such Notes, unless and until definitive, fully registered
Notes (the “Definitive Notes”) have been issued to Beneficial Owners pursuant to
Section 4.08:
(i) the
provisions of this Section 4.06 shall be in full force and effect;
(ii) the
Note
Registrar, the Paying Agent, the Indenture Trustee and the Securities
Administrator shall be entitled to deal with the Depository for all purposes
of
this Indenture (including the payment of principal of and interest on the Notes
and the giving of instructions or directions hereunder) as the sole holder
of
the Notes, and shall have no obligation to the Beneficial Owners of the
Notes;
(iii) to
the
extent that the provisions of this Section 4.06 conflict with any other
provisions of this Indenture, the provisions of this Section 4.06 shall
control;
(iv) the
rights of Beneficial Owners shall be exercised only through the Depository
and
shall be limited to those established by law and agreements between such Owners
of Notes and the Depository and/or the Depository Participants. Unless and
until
Definitive Notes are issued pursuant to Section 4.08, the initial Depository
will make book-entry transfers among the Depository Participants and receive
and
transmit payments of principal of and interest on the Notes to such Depository
Participants; and
(v) whenever
this Indenture requires or permits actions to be taken based upon instructions
or directions of Holders of Notes evidencing a specified percentage of the
Note
Principal Balances of the Notes, the Depository shall be deemed to represent
such percentage with respect to the Notes only to the extent that it has
received instructions to such effect from Beneficial Owners and/or Depository
Participants owning or representing, respectively, such required percentage
of
the beneficial interest in the Notes and has delivered such instructions to
the
Securities Administrator and the Indenture Trustee.
None
of
the Depositor, the Issuing Entity, the Master Servicer, the Seller, the
Securities Administrator, the Indenture Trustee, the Note Registrar and the
Owner Trustee shall have any liability for any aspect of the records relating
to
or payments made on account of beneficial ownership interests in the Book-Entry
Notes or for maintaining, supervising or reviewing any records relating to
beneficial ownership interests or transfers thereof.
The
Class
X, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Notes
will be registered in full definitive form.
Section
4.07 Notices
to Depository.
Whenever a notice or other communication to the Note Holders is required under
this Indenture, unless and until Definitive Notes shall have been issued to
Beneficial Owners pursuant to Section 4.08, the Indenture Trustee or Securities
Administrator, as applicable, shall give all such notices and communications
specified herein to be given to Holders of the Notes to the Depository, and
shall have no obligation to the Beneficial Owners.
Section
4.08 Definitive
Notes.
If (i)
the Depositor advises the Securities Administrator in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Book-Entry Notes and the Depositor is
unable to locate a qualified successor within 30 days or (ii) the Depositor,
at
its option (with the consent of the Securities Administrator, such consent
not
to be unreasonably withheld) elects to terminate the book-entry system through
the Depository, then the Securities Administrator shall request that the
Depository notify all Beneficial Owners of the occurrence of any such event
and
of the availability of Definitive Notes to Beneficial Owners requesting the
same. Upon surrender to the Securities Administrator of the typewritten Notes
representing the Book-Entry Notes by the Depository, accompanied by registration
instructions, the Issuing Entity shall execute and the Securities Administrator
shall authenticate the Definitive Notes in accordance with the instructions
of
the Depository. None of the Issuing Entity, the Note Registrar or the Securities
Administrator shall be liable for any delay in delivery of such instructions
and
may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes, the Securities
Administrator shall recognize the Holders of the Definitive Notes as
Noteholders.
In
addition, if an Event of Default has occurred and is continuing, each Note
Owner
materially adversely affected thereby may at its option request a Definitive
Note evidencing such Noteholder's interest in the related Class of Notes. In
order to make such request, such Noteholder shall, subject to the rules and
procedures of the Depository, provide the Depository or the related Depository
Participant with directions for the Securities Administrator to exchange or
cause the exchange of the Noteholder's interest in such Class of Notes for
an
equivalent interest in fully registered definitive form. Upon receipt by the
Securities Administrator of instructions from the Depository directing the
Securities Administrator to effect such exchange (such instructions to contain
information regarding the Class of Notes and the Note Principal Balance being
exchanged, the Depository Participant account to be debited with the decrease,
the registered holder of and delivery instructions for the Definitive Note,
and
any other information reasonably required by the Securities Administrator),
(i)
the Securities Administrator shall instruct the Depository to reduce the related
Depository Participant's account by the aggregate Note Principal Balance of
the
Definitive Note, (ii) the Securities Administrator shall execute, authenticate
and deliver, in accordance with the registration and delivery instructions
provided by the Depository, a Definitive Note evidencing such Noteholder's
interest in such Class of Notes and (iii) the Issuing Entity shall execute
and
the Securities Administrator shall authenticate a new Book-Entry Note reflecting
the reduction in the Note Principal Balance of such Class of Notes by the amount
of the Definitive Notes.
Section
4.09 Tax
Treatment.
The
Issuing Entity has entered into this Indenture, and the Class A-1, Class A-2,
Class A-3 and Class A-4 Notes will be issued with the intention that, for
federal, state and local income, single business and franchise tax purposes,
such Classes of Notes will qualify as indebtedness. The Issuing Entity and
the
Securities Administrator (in accordance with Section 6.07 hereof), by entering
into this Indenture, and each Class A-1, Class A-2, Class A-3 and Class A-4
Noteholder, by its acceptance of its Note (and each Beneficial Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat
such Classes of Notes for federal, state and local income, single business
and
franchise tax purposes as indebtedness.
Section
4.10 Satisfaction
and Discharge of Indenture.
This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution
of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.03,
3.04, 3.06, 3.09, 3.17, 3.19 and 3.20, (v) the rights, obligations and
immunities of the Indenture Trustee and Securities Administrator hereunder
(including the rights of the Securities Administrator under Section 6.08 and
the
obligations of the Securities Administrator under Section 4.11), and (vi) the
rights of Noteholders as beneficiaries hereof with respect to the property
so
deposited with the Securities Administrator payable to all or any of them,
and
the Indenture Trustee, on demand of and at the expense of the Issuing Entity,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to the Notes and shall release and deliver, or
cause
the Custodian to deliver, the Collateral to or upon the order of the Issuing
Entity, when
(A) Any
of
the following occur:
(1) all
Notes
theretofore authenticated and delivered (other than (i) Notes that have been
destroyed, lost or stolen and that have been replaced or paid as provided in
Section 4.03 hereof and (ii) Notes for whose payment money has theretofore
been
deposited in trust or segregated and held in trust by the Issuing Entity and
thereafter repaid to the Issuing Entity or discharged from such trust, as
provided in Section 3.03) have been delivered to the Securities Administrator
for cancellation; or
(2) all
Notes
not theretofore delivered to the Securities Administrator for
cancellation
| a. |
have
become due and payable,
|
| b. |
will
become due and payable at the Final Scheduled Payment Date within
one
year, or
|
| c. |
have
been called for early redemption and the Trust has been terminated
pursuant to Section 8.07 hereof, or
|
(3) the
Notes
are being exchanged for the related Classes of REMIC Class A Notes and/or REMIC
Privately Offered Certificates pursuant to Section 8.06 in connection with
a
REMIC Conversion as described in Article XI, and such Collateral or portion
thereof to be conveyed by the Issuing Entity to the Underlying REMIC
Trust;
and
the
Issuing Entity, in the case of a., b. or c. above, has irrevocably deposited
or
caused to be irrevocably deposited with the Securities Administrator cash or
direct obligations of or obligations guaranteed by the United States of America
(which will mature prior to the date such amounts are payable), in trust for
such purpose, in an amount sufficient to pay and discharge the entire
indebtedness on such Notes then outstanding not theretofore delivered to the
Securities Administrator for cancellation when due on the Final Scheduled
Payment Date or other final Payment Date and has delivered to the Securities
Administrator and the Indenture Trustee a verification report from a nationally
recognized accounting firm certifying that the amounts deposited with the
Securities Administrator are sufficient to pay and discharge the entire
indebtedness of such Notes, or, in the case of c. above, the Issuing Entity
shall have complied with all requirements of Section 8.07 hereof,
(B) the
Issuing Entity has paid or caused to be paid all other sums payable hereunder;
and
(C) the
Issuing Entity has delivered to the Indenture Trustee an Officer’s Certificate
and an Opinion of Counsel, each meeting the applicable requirements of Section
10.01 hereof, each stating that all conditions precedent herein provided for
relating to the satisfaction and discharge of this Indenture have been complied
with and, if the Opinion of Counsel relates to a deposit made in connection
with
Section 4.10(A)(2)b. above, such opinion shall further be to the effect that
such deposit will constitute an “in-substance defeasance” within the meaning of
Revenue Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuing
Entity will be the owner of the assets deposited in trust for federal income
tax
purposes.
Section
4.11 Application
of Trust Money.
All
monies deposited with the Securities Administrator pursuant to Section 4.10
hereof shall be held in trust and applied by it, in accordance with the
provisions of the Notes and this Indenture, to the payment, either directly
or
through any Paying Agent or the Certificate Paying Agent as designee of the
Issuing Entity, as the Securities Administrator may determine, to the Holders
of
Securities, of all sums due and to become due thereon for principal and interest
or otherwise; but such monies need not be segregated from other funds except
to
the extent required herein or required by law.
Section
4.12 [Reserved].
Section
4.13 Repayment
of Monies Held by Paying Agent.
In
connection with the satisfaction and discharge of this Indenture with respect
to
the Notes, all monies then held by any Person other than the Securities
Administrator under the provisions of this Indenture with respect to such Notes
shall, upon demand of the Issuing Entity, be paid to the Securities
Administrator to be held and applied according to Section 3.03 and thereupon
such Person shall be released from all further liability with respect to such
monies.
Section
4.14 Temporary
Notes.
Pending
the preparation of any Definitive Notes, the Issuing Entity may execute and
upon
its written direction, the Securities Administrator may authenticate and make
available for delivery, temporary Notes that are printed, lithographed,
typewritten, photocopied or otherwise produced, in any denomination,
substantially of the tenor of the Definitive Notes in lieu of which they are
issued and with such appropriate insertions, omissions, substitutions and other
variations as the officers executing such Notes may determine, as evidenced
by
their execution of such Notes.
If
temporary Notes are issued, the Issuing Entity will cause Definitive Notes
to be
prepared without unreasonable delay. After the preparation of the Definitive
Notes, the temporary Notes shall be exchangeable for Definitive Notes upon
surrender of the temporary Notes at the Corporate Trust Office of the Securities
Administrator, without charge to the Holder. Upon surrender for cancellation
of
any one or more temporary Notes, the Issuing Entity shall execute and the
Securities Administrator shall authenticate and make available for delivery,
in
exchange therefor, Definitive Notes of authorized denominations and of like
tenor, class and aggregate principal amount. Until so exchanged, such temporary
Notes shall in all respects be entitled to the same benefits under this
Indenture as Definitive Notes.
Section
4.15 ERISA
Treatment.
No
Note
may be sold or transferred to a Person unless such Person certifies in the
form
of Exhibit E to this Agreement (which in the case of the Book-Entry Notes,
such
Person will be deemed to have made the representations contained in such
certificates, respectively), which certification the Indenture Trustee may
rely
upon without further inquiry or investigation, that:
(i) Such
Person is neither (A) an employee benefit plan or other retirement arrangement,
including individual retirement accounts and annuities, Xxxxx plans and
collective investment funds and separate accounts in which such plans, accounts
or arrangements are invested, including, without limitation, insurance company
general accounts, that is subject to ERISA or the Code (each, a “Plan”), nor (B)
any Person who is directly or indirectly purchasing such Note or interest
therein on behalf of, as named fiduciary of, as trustee of, or with “Plan
Assets” (as defined under the DOL Regulation at 29 C.F.R. Section 2510.3-101) of
a Plan;
(ii) (A)
Such
Person is a Plan or a Person purchasing such Note with Plan Assets and
represents that, as of the date of the transfer, the Notes are rated investment
grade or better, (B) such Person believes that the Notes are properly treated
as
indebtedness without substantial equity features for purposes of the DOL
Regulations, and agrees to so treat the Notes, and (C) the acquisition and
holding of the Note will not give rise to a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code; or
(iii) Such
Person has provided the Note Registrar with an Opinion of Counsel, which Opinion
of Counsel will not be at the expense of the Trust Estate, the Depositor, the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Securities
Administrator or the Note Registrar, which establishes to the satisfaction
of
the Indenture Trustee that the purchase, holding and transfer of such Note
or
interest therein is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under ERISA or Section 4975 of
the
Code and will not subject the Issuing Entity, the Owner Trustee, the Securities
Administrator, the Depositor, the Note Registrar or the Indenture Trustee to
any
obligation in addition to those undertaken in the Indenture.
Notwithstanding
the foregoing, neither an Opinion of Counsel nor a certification will be
required in connection with the initial transfer of any such Note by the
Depositor to an Affiliate of the Depositor (in which case, the Depositor or
any
Affiliate thereof shall be deemed to have represented that such Affiliate is
not
a Plan or any Person investing “plan assets” of any Plan) and the Note Registrar
shall be entitled to conclusively rely upon a representation (which, upon the
request of the Note Registrar, shall be a written representation) from the
Depositor of the status of such transferee as an Affiliate of the
Depositor.
ARTICLE
V
DEFAULT
AND REMEDIES
Section
5.01 Events
of Default.
The
Issuing Entity shall deliver to the Indenture Trustee, within five days after
learning of the occurrence of a Default, written notice in the form of an
Officer’s Certificate of any event which with the giving of notice and the lapse
of time would become an Event of Default under clause (ii), (iii) or (iv) of
the
definition of “Event of Default”, its status and what action the Issuing Entity
is taking or proposes to take with respect thereto. The Indenture Trustee shall
not be deemed to have knowledge of any Default or Event of Default unless a
Responsible Officer has actual knowledge thereof or unless written notice of
such Default or Event of Default is received by a Responsible Officer and such
notice references the Notes, the Trust Estate or this Indenture.
Section
5.02 Acceleration
of Maturity; Rescission and Annulment.
If an
Event of Default should occur and be continuing, then and in every such case
the
Indenture Trustee at the written direction of the Holders of Notes representing
not less than a majority of the aggregate Note Principal Balance of the Notes
may declare the Notes to be immediately due and payable, by a notice in writing
to the Issuing Entity (and to the Indenture Trustee if such notice is given
by
Noteholders), and upon any such declaration the unpaid Note Principal Balance
of
the Notes, together with accrued and unpaid interest thereon through the date
of
acceleration, shall become immediately due and payable.
At
any
time after such declaration of acceleration of maturity with respect to an
Event
of Default has been made and before a judgment or decree for payment of the
money due has been obtained by the Indenture Trustee as hereinafter in this
Article V provided, Holders of the Notes representing not less than a majority
of the aggregate Note Principal Balance of each Class of Notes, by written
notice to the Issuing Entity and the Indenture Trustee, may, subject to Section
5.12, waive the related Event of Default and rescind and annul such declaration
and its consequences if:
(i) the
Issuing Entity has paid or deposited with the Indenture Trustee or Securities
Administrator a sum sufficient to pay:
(A) all
payments of principal of and interest on the Notes and all other amounts that
would then be due hereunder or under the Notes if the Event of Default giving
rise to such acceleration had not occurred;
(B) all
sums
paid or advanced by the Indenture Trustee hereunder and the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee
and
its agents and counsel; and
(ii) all
Events of Default, other than the nonpayment of the principal of the Notes
that
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.12.
No
such
rescission shall affect any subsequent default or impair any right consequent
thereto.
Section
5.03 Collection
of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) The
Issuing Entity covenants that if (i) default is made in the payment of any
interest on any Note when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment
of
the principal of or any installment of the principal of any Note when the same
becomes due and payable, the Issuing Entity shall, upon demand of the Indenture
Trustee, acting at the direction of the Holders of a majority of the aggregate
Note Principal Balances of the Notes, pay to the Securities Administrator,
for
the benefit of the Holders of Notes, the whole amount then due and payable
on
the Notes for principal and interest, with interest at the applicable Note
Interest Rate upon the overdue principal, and in addition thereto such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances
of
the Indenture Trustee and its agents and counsel.
(b) In
case
the Issuing Entity shall fail forthwith to pay such amounts upon such demand,
the Indenture Trustee, in its own name and as trustee of an express trust,
subject to the provisions of Section 10.15 hereof, may institute a Proceeding
for the collection of the sums so due and unpaid, and may prosecute such
Proceeding to judgment or final decree, and may enforce the same against the
Issuing Entity or other obligor upon the Notes and collect in the manner
provided by law out of the property of the Issuing Entity or other obligor
upon
the Notes, wherever situated, the monies adjudged or decreed to be
payable.
(c) If
an
Event of Default occurs and is continuing, the Indenture Trustee, subject to
the
provisions of Section 10.15 hereof, may, as more particularly provided in
Section 5.04 hereof, in its discretion, proceed to protect and enforce its
rights and the rights of the Noteholders by such appropriate Proceedings as
directed in writing by Holders of a majority of the aggregate Note Principal
Balances of each Class of Notes, to protect and enforce any such rights, whether
for the specific enforcement of any covenant or agreement in this Indenture
or
in aid of the exercise of any power granted herein, or to enforce any other
proper remedy or legal or equitable right vested in the Indenture Trustee by
this Indenture or by law.
(d) In
case
there shall be pending, relative to the Issuing Entity or any other obligor
upon
the Notes or any Person having or claiming an ownership interest in the Trust
Estate, Proceedings under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or other similar law, or
in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for
or
taken possession of the Issuing Entity or its property or such other obligor
or
Person, or in case of any other comparable judicial Proceedings relative to
the
Issuing Entity or other obligor upon the Notes, or to the creditors or property
of the Issuing Entity or such other obligor, the Indenture Trustee, as directed
in writing by Holders of a majority of the aggregate Note Principal Balances
of
each Class of Notes, irrespective of whether the principal of any Notes shall
then be due and payable as therein expressed or by declaration or otherwise
and
irrespective of whether the Indenture Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered,
by
intervention in such Proceedings or otherwise:
(i) to
file
and prove a claim or claims for the whole amount of principal and interest
owing
and unpaid in respect of the Notes and to file such other papers or documents
as
may be necessary or advisable in order to have the claims of the Indenture
Trustee (including any claim for reasonable compensation to the Indenture
Trustee and each predecessor Indenture Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances made, by the Indenture Trustee and each predecessor
Indenture Trustee, except as a result of negligence, willful misconduct or
bad
faith) and of the Noteholders allowed in such Proceedings;
(ii) unless
prohibited by applicable law and regulations, to vote on behalf of the Holders
of Notes in any election of a trustee, a standby trustee or Person performing
similar functions in any such Proceedings;
(iii) to
collect and receive any monies or other property payable or deliverable on
any
such claims and to distribute all amounts received with respect to the claims
of
the Noteholders and of the Indenture Trustee on their behalf, and
(iv) to
file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Indenture Trustee or the Holders
of
Notes allowed in any judicial proceedings relative to the Issuing Entity, its
creditors and its property;
and
any
trustee, receiver, liquidator, custodian or other similar official in any such
Proceeding is hereby authorized by each of such Noteholders to make payments
to
the Securities Administrator, and, in the event that the Indenture Trustee
shall
consent to the making of payments directly to such Noteholders, to pay to the
Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee.
(e) Nothing
herein contained shall be deemed to authorize the Indenture Trustee to authorize
or consent to or vote for or accept or adopt on behalf of any Noteholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Notes or the rights of any Holder thereof or to authorize the Indenture Trustee
to vote in respect of the claim of any Noteholder in any such proceeding except,
as aforesaid, to vote for the election of a trustee in bankruptcy or similar
Person.
(f) All
rights of action and of asserting claims under this Indenture, or under any
of
the Notes, may be enforced by the Indenture Trustee without the possession
of
any of the Notes or the production thereof in any trial or other Proceedings
relative thereto, and any such action or proceedings instituted by the Indenture
Trustee shall be brought in its own name as trustee of an express trust, and
any
recovery of judgment, subject to the payment of the expenses, disbursements
and
compensation of the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents and attorneys, shall be for the ratable benefit of
the
Holders of the Notes, subject to Section 5.05 hereof.
In
any
Proceedings brought by the Indenture Trustee (and also any Proceedings involving
the interpretation of any provision of this Indenture to which the Indenture
Trustee shall be a party), the Indenture Trustee shall be held to represent
all
the Holders of the Notes, and it shall not be necessary to make any Noteholder
a
party to any such Proceedings.
Section
5.04 Remedies;
Priorities.
(a)
If an
Event of Default shall have occurred and be continuing and if an acceleration
has been declared and not rescinded pursuant to Section 5.02 hereof, the
Indenture Trustee, subject to the provisions of Section 10.15 hereof, may,
and
shall, at the written direction of the Holders of a majority of the aggregate
Note Principal Balances of the Notes, do one or more of the following (subject
to Section 5.05 hereof):
(i) institute
Proceedings in its own name and as trustee of an express trust for the
collection of all amounts then payable on the Notes or under this Indenture
with
respect thereto, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuing Entity and any other obligor upon such
Notes monies adjudged due;
(ii) institute
Proceedings from time to time for the complete or partial foreclosure of this
Indenture with respect to the Trust Estate;
(iii) exercise
any remedies of a secured party under the UCC and take any other appropriate
action to protect and enforce the rights and remedies of the Indenture Trustee
and the Holders of the Notes; and
(iv) sell
the
Trust Estate or any portion thereof or rights or interest therein, at one or
more public or private sales called and conducted in any manner permitted by
law;
provided,
however, that the Indenture Trustee may not sell or otherwise liquidate the
Trust Estate following an Event of Default, unless (A) the Indenture Trustee
obtains the consent of the Holders of 100% of the aggregate Note Principal
Balance of the Notes then outstanding, (B) the proceeds of such sale or
liquidation distributable to the Holders of the Notes are sufficient to
discharge in full all amounts then due and unpaid upon such Notes for principal
and interest or (C) the Indenture Trustee determines that the Mortgage Loans
will not continue to provide sufficient funds for the payment of principal
of
and interest on the applicable Notes as they would have become due if the Notes
had not been declared due and payable, and the Indenture Trustee obtains the
consent of the Holders of 66 2/3% of the aggregate Note Principal Balance of
each Class of Notes then outstanding, voting separately. In determining such
sufficiency or insufficiency with respect to clause (B) and (C), the Indenture
Trustee may, but need not, obtain and rely upon an opinion (obtained at the
expense of the Trust) of an Independent investment banking or accounting firm
of
national reputation as to the feasibility of such proposed action and as to
the
sufficiency of the Trust Estate for such purpose. Notwithstanding the foregoing,
any Sale of the Trust Estate shall be made subject to the continued servicing
of
the Mortgage Loans by the Servicer (other than any Servicer as to which an
Event
of Servicer Termination has occurred and is continuing) as provided in the
Sale
and Servicing Agreement.
(b) If
the
Indenture Trustee or the Securities Administrator collects any money or property
pursuant to this Article V, the Securities Administrator shall pay out the
money
or property in the following order:
FIRST:
to
the Indenture Trustee, the Securities Administrator, Master Servicer, the Owner
Trustee, the Custodian and the Servicer for amounts due and not previously
paid
pursuant to the Indenture and the other Basic Documents;
SECOND:
to the Class A-1, Class A-2, Class A-3 and Class A-4 Noteholders, pro rata,
for
amounts due and unpaid on such Notes with respect to interest (not including
any
Carryover Shortfall Amounts), according to the amounts due and payable on each
such Notes for interest;
THIRD:
to
the Class A-1, Class A-2, Class A-3 and Class A-4 Noteholders, pro rata, for
amounts due and unpaid on such Notes with respect to principal, and to each
such
Noteholder ratably, without preference or priority of any kind, according to
the
amounts due and payable on such Notes for principal, until the Note Principal
Balance of each such Class is reduced to zero;
FOURTH:
to the Class A-1, Class A-2, Class A-3 and Class A-4 Noteholders, pro rata,
in
each case based on the amount of any Carryover Shortfall Amounts not previously
paid;
FIFTH:
to
the Class A-1, Class A-2, Class A-3 and Class A-4 Noteholders, an amount equal
to any previously allocated Realized Losses, on a pro rata, in each case based
on the amount of Realized Losses previously allocated to each such
Class;
SIXTH:
to
the Class X Noteholders, the Accrued Note Interest thereon for such Payment
Date
(subject to any Net Interest Shortfalls allocated to such Class) to the extent
of the remaining Interest Funds for such Payment Date;
SEVENTH:
sequentially to the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and
Class B-6 Notes, in that order, up to an amount equal to and in the following
order with respect to each such Class: (a) the Accrued Note Interest thereon
for
such Payment Date (subject to Net Interest Shortfalls allocated to such Class)
to the extent of any remaining Interest Funds for such Payment Date; (b) any
Accrued Note Interest thereon remaining undistributed from previous Payment
Dates, with accrued interest thereon, to the extent of any remaining Interest
Funds for such Payment Date; and (c) such Class’s Allocable Share of the
Subordinate Optimal Principal Amount for such Payment Date, in each case to
the
extent of any remaining Principal Funds and until the Note Principal Balance
thereof has been reduced to zero; and
EIGHTH:
to the holders of the Trust Certificates on behalf of the Issuing
Entity.
The
Securities Administrator may fix a record date and Payment Date for any payment
to Noteholders pursuant to this Section 5.04. At least 15 days before such
record date, the Securities Administrator shall mail to each Noteholder a notice
that states the record date, the Payment Date and the amount to be
paid.
Section
5.05 Optional
Preservation of the Trust Estate.
If the
Notes have been declared to be due and payable under Section 5.02 following
an
Event of Default and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may elect to take and maintain
possession of the Trust Estate. It is the desire of the parties hereto and
the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes and other obligations of the Issuing
Entity, and the Indenture Trustee shall take such desire into account when
determining whether or not to take and maintain possession of the Trust Estate.
In determining whether to take and maintain possession of the Trust Estate,
the
Indenture Trustee may, but need not, obtain and rely upon an opinion of an
Independent investment banking or accounting firm of national reputation as
to
the feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
Section
5.06 Limitation
of Suits.
So long
as the Majority Certificateholder owns 100% of the Securities, no Holder of
any
Note shall have any right to institute any Proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee,
or for any other remedy hereunder. No Holder of any Note shall have any right
to
institute any Proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless and subject to the foregoing and the provisions of Section
10.15 hereof:
(i) such
Holder has previously given written notice to the Indenture Trustee of a
continuing Event of Default;
(ii) the
Holders of not less than 25% of the aggregate Note Principal Balance of the
Notes have made a written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as Indenture
Trustee hereunder;
(iii) such
Holder or Holders have offered to the Indenture Trustee reasonable indemnity
against the costs, expenses and liabilities to be incurred in complying with
such request;
(iv) the
Indenture Trustee, for 60 days after its receipt of such notice of request
and
offer of indemnity, has failed to institute such Proceedings; and
(v) no
direction inconsistent with such written request has been given to the Indenture
Trustee during such 60-day period by the Holders of a majority of the Note
Principal Balances of the Notes.
It
is
understood and intended that no one or more Holders of Notes shall have any
right in any manner whatever by virtue of, or by availing of, any provision
of
this Indenture to affect, disturb or prejudice the rights of any other Holders
of Notes or to obtain or to seek to obtain priority or preference over any
other
Holders or to enforce any right under this Indenture, except in the manner
herein provided.
No
Holder
of any Note shall have any right to institute any Proceeding, judicial or
otherwise, with respect to a TMP Trigger Event, with respect to the meeting
of
the conditions for a REMIC Conversion or with respect to a REMIC
Conversion.
Subject
to the last paragraph of Section 5.11 herein, in the event the Indenture Trustee
shall receive conflicting or inconsistent requests and indemnity from two or
more Holders of Notes, each representing less than a majority of the Note
Principal Balances of the Notes, the Indenture Trustee shall take such action
as
requested by the Holders representing the highest amount (in the aggregate)
of
the Note Principal Balances, notwithstanding any other provisions of this
Indenture.
Section
5.07 Unconditional
Rights of Noteholders To Receive Principal and Interest.
Notwithstanding any other provisions in this Indenture, the Holder of any Note
shall have the right, which is absolute and unconditional, to receive payment
of
the principal of and interest, if any, on such Note on or after the respective
due dates thereof expressed in such Note or in this Indenture and to institute
suit for the enforcement of any such payment, and such right shall not be
impaired without the consent of such Holder.
Section
5.08 Restoration
of Rights and Remedies.
If the
Indenture Trustee or any Noteholder has instituted any Proceeding to enforce
any
right or remedy under this Indenture and such Proceeding has been discontinued
or abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuing Entity,
the Indenture Trustee and the Noteholders shall, subject to any determination
in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been
instituted.
Section
5.09 Rights
and Remedies Cumulative.
No
right or remedy herein conferred upon or reserved to the Indenture Trustee
or to
the Noteholders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative
and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section
5.10 Delay
or Omission Not a Waiver.
No
delay or omission of the Indenture Trustee or any Holder of any Note to exercise
any right or remedy accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by
law
to the Indenture Trustee or to the Noteholders may be exercised from time to
time, and as often as may be deemed expedient, by the Indenture Trustee or
by
the Noteholders, as the case may be.
Section
5.11 Control
By Noteholders.
The
Holders of a majority of the aggregate Note Principal Balances of Notes shall
have the right to direct the time, method and place of conducting any Proceeding
for any remedy available to the Indenture Trustee with respect to the Notes
or
exercising any trust or power conferred on the Indenture Trustee; provided
that:
(i) such
direction shall not be in conflict with any rule of law or with this
Indenture;
(ii) any
direction to the Indenture Trustee to sell or liquidate the Trust Estate shall
be by Holders of Notes representing not less than 100% of the aggregate Note
Principal Balance of the Notes or the Holders of 66 2/3% of the aggregate Note
Principal Balance of each Class of Notes then outstanding, voting separately
as
set forth in Section 5.04(a) hereof; and
(iii) the
Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction of the Holders of Notes
representing a majority of the Note Principal Balances of the
Notes.
Notwithstanding
the rights of Noteholders set forth in this Section 5.11 the Indenture Trustee
need not take any action that it determines might involve it in
liability.
Section
5.12 Waiver
of Past Defaults.
Prior
to the declaration of the acceleration of the maturity of the Notes as provided
in Section 5.02 hereof, the Holders of Notes representing not less than a
majority of the aggregate Note Principal Balance of each Class of Notes may
waive any past Event of Default and its consequences except an Event of Default
(a) with respect to payment of principal of or interest on any of the Notes,
or
(b) in respect of a covenant or provision hereof which cannot be modified or
amended without the consent of the Holder of each Note. In the case of any
such
waiver, the Issuing Entity, the Indenture Trustee and the Holders of the Notes
shall be restored to their former positions and rights hereunder, respectively,
but no such waiver shall extend to any subsequent or other Event of Default
or
impair any right consequent thereto.
Upon
any
such waiver, any Event of Default arising therefrom shall be deemed to have
been
cured and not to have occurred for every purpose of this Indenture; but no
such
waiver shall extend to any subsequent or other Event of Default or impair any
right consequent thereto.
Section
5.13 Undertaking
for Costs.
All
parties to this Indenture agree, and each Holder of any Note and each Beneficial
Owner of any interest therein by such Xxxxxx’s or Beneficial Owner’s acceptance
thereof shall be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Indenture, or in any suit against the Indenture Trustee for any action taken,
suffered or omitted by it as Indenture Trustee, the filing by any party litigant
in such suit of an undertaking to pay the costs of such suit, and that such
court may in its discretion assess reasonable costs, including reasonable
attorneys’ fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.13 shall not apply to (a) any suit
instituted by the Indenture Trustee, (b) any suit instituted by any Noteholder,
or group of Noteholders, in each case holding in the aggregate more than 10%
of
the Note Principal Balances of the Notes or (c) any suit instituted by any
Noteholder for the enforcement of the payment of principal of or interest on
any
Note on or after the respective due dates expressed in such Note and in this
Indenture.
Section
5.14 Waiver
of Stay or Extension Laws.
The
Issuing Entity covenants (to the extent that it may lawfully do so) that it
will
not at any time insist upon, or plead or in any manner whatsoever, claim or
take
the benefit or advantage of, any stay or extension law wherever enacted, now
or
at any time hereafter in force, that may affect the covenants or the performance
of this Indenture; and the Issuing Entity (to the extent that it may lawfully
do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it shall not hinder, delay or impede the execution of any power
herein granted to the Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been
enacted.
Section
5.15 Sale
of Trust Estate.
(a)
The
power to effect any sale or other disposition (a “Sale”) of any portion of the
Trust Estate pursuant to Section 5.04 hereof is expressly subject to the
provisions of Sections 5.05 and 5.11(ii) hereof and this Section 5.15. The
power
to effect any such Sale shall not be exhausted by any one or more Sales as
to
any portion of the Trust Estate remaining unsold, but shall continue unimpaired
until the entire Trust Estate shall have been sold or all amounts payable on
the
Notes and under this Indenture shall have been paid. The Indenture Trustee
may
from time to time postpone any public Sale by public announcement made at the
time and place of such Sale. The Indenture Trustee hereby expressly waives
its
right to any amount fixed by law as compensation for any Sale.
(b) The
Indenture Trustee shall not in any private Sale sell the Trust Estate, or any
portion thereof, unless
(1) the
Holders of all Notes consent to or direct the Indenture Trustee to make, such
Sale, or
(2) the
proceeds of such Sale would be not less than the entire amount which would
be
payable to the Noteholders under the Notes, in full payment thereof in
accordance with Section 5.02 hereof, on the Payment Date next succeeding the
date of such Sale, or
(3) the
Indenture Trustee determines that the conditions for retention of the Trust
Estate set forth in Section 5.05 hereof cannot be satisfied (in making any
such
determination, the Indenture Trustee may rely upon an opinion of an Independent
investment banking firm obtained and delivered as provided in Section 5.05
hereof), and the Holders of Notes representing at least 100% of the Note
Principal Balances of the Notes consent to such Sale; or
(4) such
Sale
occurs following the occurrence of a TMP Trigger Event as described in Section
11.01 of this Indenture.
The
purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a
private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).
(c) Subject
to this Section 5.15, unless the Holders representing at least 100% of the
aggregate Note Principal Balance of the Notes or the Holders of 66 2/3% of
the
aggregate Note Principal Balance of each Class of Notes then outstanding, voting
separately as set forth in Section 5.04(a) hereof, have otherwise consented
or
directed the Indenture Trustee, at any public Sale of all or any portion of
the
Trust Estate at which a minimum bid equal to or greater than the amount
described in paragraph (2) of subsection (b) of this Section 5.15 has not been
established by the Indenture Trustee and no Person bids an amount equal to
or
greater than such amount, the Indenture Trustee, as trustee for the benefit
of
the Holders of the Notes, shall bid an amount (which shall include the Indenture
Trustee’s right, in its capacity as Indenture Trustee, to credit bid) at least
$1.00 more than the highest other bid in order to preserve the Trust Estate
on
behalf of the Noteholders.
(d) In
connection with a Sale of all or any portion of the Trust Estate,
(1) any
Holder or Holders of Notes may bid for and purchase the property offered for
sale, and upon compliance with the terms of sale may hold, retain and possess
and dispose of such property, without further accountability, and may, in paying
the purchase money therefor, deliver any Notes or claims for interest thereon
in
lieu of cash up to the amount which shall, upon distribution of the net proceeds
of such sale, be payable thereon, and such Notes, in case the amounts so payable
thereon shall be less than the amount due thereon, shall be returned to the
Holders thereof after being appropriately stamped to show such partial
payment;
(2) the
Indenture Trustee may bid for and acquire the property offered for Sale in
connection with any Sale thereof, and, subject to any requirements of, and
to
the extent permitted by, applicable law in connection therewith, may purchase
all or any portion of the Trust Estate in a private sale, and, in lieu of paying
cash therefor, may make settlement for the purchase price by crediting the
gross
Sale price against the sum of (A) the amount which would be distributable to
the
Holders of the Notes and Holders of Certificates on the Payment Date next
succeeding the date of such Sale and (B) the expenses of the Sale and of any
Proceedings in connection therewith which are reimbursable to it, without being
required to produce the Notes in order to complete any such Sale or in order
for
the net Sale price to be credited against such Notes, and any property so
acquired by the Indenture Trustee shall be held and dealt with by it in
accordance with the provisions of this Indenture;
(3) the
Indenture Trustee shall execute and deliver an appropriate instrument of
conveyance, prepared by the Issuing Entity and satisfactory to the Indenture
Trustee, transferring its interest in any portion of the Trust Estate in
connection with a Sale thereof; and
(4) the
Indenture Trustee is hereby irrevocably appointed the agent and attorney-in-fact
of the Issuing Entity to transfer and convey its interest in any portion of
the
Trust Estate in connection with a Sale thereof, and to take all action necessary
to effect such Sale.
(e) So
long
as the Majority Certificateholder owns 100% of the Securities, the Majority
Certificateholder shall not consent to any Sale of the Trust Estate as set
forth
herein.
Section
5.16 Action
on Notes.
The
Indenture Trustee’s right to seek and recover judgment on the Notes or under
this Indenture shall not be affected by the seeking, obtaining or application
of
any other relief under or with respect to this Indenture. Neither the lien
of
this Indenture nor any rights or remedies of the Indenture Trustee or the
Noteholders shall be impaired by the recovery of any judgment by the Indenture
Trustee against the Issuing Entity or by the levy of any execution under such
judgment upon any portion of the Trust Estate or upon any of the assets of
the
Issuing Entity. Any money or property collected by the Indenture Trustee or
the
Securities Administrator shall be applied by the Securities Administrator in
accordance with Section 5.04(b) hereof.
ARTICLE
VI
THE
INDENTURE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section
6.01 Duties
of Indenture Trustee and Securities Administrator.
(a)
If an
Event of Default has occurred and is continuing, the Indenture Trustee shall
exercise the rights and powers vested in it by this Indenture and use the same
degree of care and skill in their exercise as a prudent person would exercise
or
use under the circumstances in the conduct of such person’s own
affairs.
(b) Except
during the continuance of an Event of Default of which the Indenture Trustee
has
actual knowledge or has received written notice, in the case of the Indenture
Trustee and, at any time, in the case of the Securities
Administrator:
(i) the
Indenture Trustee and the Securities Administrator undertakes to perform such
duties and only such duties as are specifically set forth in this Indenture
and
the other Basic Documents to which it is a party and no implied covenants or
obligations shall be read into this Indenture and the other Basic Documents
against the Indenture Trustee or the Securities Administrator; and
(ii) in
the
absence of bad faith on its part, the Indenture Trustee and the Securities
Administrator may conclusively rely, as to the truth of the statements and
the
correctness of the opinions expressed therein, upon certificates, reports,
documents, Issuer Requests or other instruments or opinions furnished to each
of
the Indenture Trustee and the Securities Administrator and conforming to the
requirements of this Indenture or the other Basic Documents; however, the
Indenture Trustee and the Securities Administrator shall examine the
certificates, reports, documents, Issuer Requests or other instruments and
opinions to determine whether or not they conform on their face to the
requirements of this Indenture.
(c) The
Indenture Trustee and the Securities Administrator may not be relieved from
liability for each of its own negligent action, its own negligent failure to
act
or its own willful misconduct, except that:
(i) this
paragraph does not limit the effect of paragraph (b) of this Section
6.01;
(ii) neither
the Indenture Trustee nor the Securities Administrator shall not be liable
for
any error of judgment made in good faith by a Responsible Officer unless it
is
proved that the Indenture Trustee or the Securities Administrator, as
applicable, was negligent in ascertaining the pertinent facts; and
(iii) neither
the Indenture Trustee nor the Securities Administrator shall be liable with
respect to any action it takes or omits to take in good faith in accordance
with
a direction received by it from Noteholders, the Certificateholders or from
the
Issuing Entity, which they are entitled to give under the Basic
Documents.
(d) The
Indenture Trustee shall not be liable for interest on any money received by
it
except as set forth in the Basic Documents and as the Indenture Trustee may
agree in writing with the Issuing Entity.
(e) Money
held in trust by the Indenture Trustee need not be segregated from other trust
funds except to the extent required by law or the terms of this Indenture or
the
Trust Agreement.
(f) No
provision of this Indenture shall require the Indenture Trustee or the
Securities Administrator to expend or risk its own funds or otherwise incur
financial liability in the performance of any of its duties hereunder or in
the
exercise of any of its rights or powers, if it shall have reasonable grounds
to
believe that repayment of such funds or indemnity satisfactory to it against
such risk or liability is not reasonably assured to it.
(g) Every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Indenture Trustee shall be subject to the
provisions of this Section.
(h) The
Indenture Trustee shall not be deemed to have notice or knowledge of any Default
or Event of Default unless a Responsible Officer of the Indenture Trustee has
actual knowledge thereof or unless written notice of any such event that is
in
fact an Event of Default or Default is received by the Indenture Trustee at
its
Corporate Trust Office and such notice references the Notes or Certificates
generally, the Issuing Entity, the Trust Estate or this Indenture.
(i) The
Securities Administrator (i) may not be an originator, Master Servicer,
Servicer, the Depositor or an affiliate of the Depositor unless the Securities
Administrator is in an institutional trust department, (ii) must be authorized
to exercise corporate trust powers under the laws of its jurisdiction of
organization, and (iii) must be rated at least “A/F1” by Fitch, if Fitch is a
Rating Agency, or the equivalent rating by S&P or Xxxxx’x. If no successor
Securities Administrator shall have been appointed and shall have accepted
appointment within 60 days after the Securities Administrator ceases to be
the
Securities Administrator pursuant to Section 6.09, then the Indenture
Trustee
shall perform the duties of the Securities Administrator pursuant to this
Agreement. The Indenture Trustee shall be entitled to all compensation,
reimbursement of expenses and indemnifications that the Securities Administrator
would have been entitled to if it had continued to act hereunder, provided,
however, that the Indenture Trustee shall not be (i) liable for any acts or
omissions of the Securities Administrator, or (ii) responsible for expenses
of
the Securities Administrator. The Indenture Trustee shall notify the Rating
Agencies of any change of Securities Administrator.
Section
6.02 Rights
of Indenture Trustee and Securities Administrator.
(a)
The
Indenture Trustee and the Securities Administrator may rely on any document
believed by it to be genuine and to have been signed or presented by the proper
person. The Indenture Trustee and the Securities Administrator need not
investigate any fact or matter stated in the document.
(b) Before
the Indenture Trustee or the Securities Administrator acts or refrains from
acting, it may require an Officer’s Certificate or an Opinion of Counsel.
Neither the Indenture Trustee nor the Securities Administrator shall be liable
for any action it takes or omits to take in good faith in reliance on and in
accordance with an Officer’s Certificate or Opinion of Counsel.
(c) Neither
the Indenture Trustee nor the Securities Administrator shall be liable for
any
action it takes or omits to take in good faith which it believes to be
authorized or within its rights or powers.
(d) The
Indenture Trustee or the Securities Administrator may consult with counsel,
and
the written advice or Opinion of Counsel (which shall not be at the expense
of
the Indenture Trustee or the Securities Administrator) with respect to legal
matters relating to this Indenture, the other Basic Documents and the Notes
shall be full and complete authorization and protection from liability in
respect to any action taken, omitted or suffered by it hereunder in good faith
and in accordance with the written advice or opinion of such
counsel.
(e) For
the
limited purpose of effecting any action to be undertaken by each of the
Indenture Trustee and the Securities Administrator, but not specifically as
a
duty of the Indenture Trustee or the Securities Administrator in the Indenture,
each of the Indenture Trustee and the Securities Administrator may execute
any
of the trusts or powers hereunder or perform any duties hereunder, either
directly or by or through agents, attorneys, custodians or nominees appointed
with due care, and shall not be responsible for any willful misconduct or
negligence on the part of any agent, attorney, custodian or nominee so
appointed.
(f) The
Securities Administrator or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Securities Administrator’s
economic self-interest for (i) serving as investment adviser, administrator,
shareholder servicing agent, custodian or sub-custodian with respect to certain
of the Permitted Investments, (ii) using Affiliates to effect transactions
in
certain Permitted Investments and (iii) effecting transactions in certain
Permitted Investments. Such compensation shall not be considered an amount
that
is reimbursable or payable to the Securities Administrator (i) as part of the
compensation hereunder or (ii) out of Available Funds.
(g) Anything
in this Indenture to the contrary notwithstanding, in no event shall the
Indenture Trustee or the Securities Administrator be liable for special,
indirect or consequential loss or damage of any kind whatsoever (including
but
not limited to lost profits), even if the Indenture Trustee or the Securities
Administrator has been advised of the likelihood of such loss or damage and
regardless of the form of action.
(h) None
of
the Securities Administrator, the Issuing Entity or the Indenture Trustee shall
be responsible for the acts or omissions of the other, it being understood
that
this Indenture shall not be construed to render them partners, joint venturers
or agents of one another.
(i) Neither
the Indenture Trustee nor the Securities Administrator shall be required to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or indemnity reasonably satisfactory to it against such risk
or
liability is not reasonably assured to it, and none of the provisions contained
in this Indenture shall in any event require the Indenture Trustee or the
Securities Administrator to perform, or be responsible for the manner of
performance of, any of the obligations of the Master Servicer under the Xxxxx
Fargo Servicing Agreement, except during such time, if any, as the Indenture
Trustee shall be the successor to, and be vested with the rights, duties, powers
and privileges of, the Master Servicer in accordance with the terms of the
Xxxxx
Fargo Servicing Agreement.
(j) Except
for those actions that the Indenture Trustee or the Securities Administrator
are
required to take hereunder, neither the Indenture Trustee nor the Securities
Administrator shall have any obligation or liability to take any action or
to
refrain from taking any action hereunder in the absence of written direction
as
provided hereunder.
(k) Neither
the Indenture Trustee nor the Securities Administrator shall be under any
obligation to exercise any of the trusts or powers vested in it by this
Indenture, other than its obligation to give notices pursuant to this Indenture,
or to institute, conduct or defend any litigation hereunder or in relation
hereto at the request, order or direction of any of the Noteholders pursuant
to
the provisions of this Indenture, unless such Noteholders shall have offered
to
the Indenture Trustee or the Securities Administrator, as applicable, reasonable
security or indemnity against the costs, expenses and liabilities which may
be
incurred therein or thereby. Nothing contained herein shall, however, relieve
the Indenture Trustee of the obligation, upon the occurrence of an Event of
Default of which a Responsible Officer of the Indenture Trustee has actual
knowledge (which has not been cured or waived), to exercise such of the rights
and powers vested in it by this Indenture and to use the same degree of care
and
skill in their exercise as a prudent person would exercise under the
circumstances in the conduct of his own affairs.
(l) Neither
the Indenture Trustee nor the Securities Administrator shall be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, bond or other paper or document, unless requested in writing
to
do so by Holders of Notes representing not less than 25% of the Note Principal
Balance of the Notes and provided that the payment within a reasonable time
to
the Indenture Trustee or the Securities Administrator, as applicable, of the
costs, expenses or liabilities likely to be incurred by it in the making of
such
investigation is, in the opinion of the Indenture Trustee or the Securities
Administrator, as applicable, reasonably assured to the Indenture Trustee by
the
security afforded to it by the terms of this Indenture. The Indenture Trustee
or
the Securities Administrator may require reasonable indemnity against such
expense or liability as a condition to taking any such action. The reasonable
expense of every such examination shall be paid by the Noteholders requesting
the investigation.
(m) Should
the Indenture Trustee or the Securities Administrator deem the nature of any
action required on its part to be unclear, the Indenture Trustee or the
Securities Administrator, respectively, may require prior to such action that
it
be provided by the Depositor with reasonable further instructions.
(n) The
right
of the Indenture Trustee or the Securities Administrator to perform any
discretionary act enumerated in this Indenture shall not be construed as a
duty,
and neither the Indenture Trustee nor the Securities Administrator shall be
accountable for other than its negligence or willful misconduct in the
performance of any such act.
(o) Neither
the Indenture Trustee nor the Securities Administrator shall be required to
give
any bond or surety with respect to the execution of the trust created hereby
or
the powers granted hereunder.
(p) Neither
the Indenture Trustee nor the Securities Administrator shall have any duty
to
conduct any affirmative investigation as to the occurrence of any condition
requiring the repurchase of any Mortgage Loan by the Seller pursuant to this
Indenture or the Mortgage Loan Purchase Agreement, as applicable, or the
eligibility of any Mortgage Loan for purposes of this Indenture.
(q) The
Indenture Trustee shall not be deemed to have notice or actual knowledge of
any
Default or Event of Default unless actually known to a Responsible Officer
of
the Indenture Trustee or written notice thereof (making reference to this
Indenture or the Notes) is received by the Indenture Trustee at the Corporate
Trust Office.
Section
6.03 Individual
Rights of Indenture Trustee.
The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuing Entity or its
Affiliates with the same rights it would have if it were not Indenture Trustee,
subject to the requirements of the Trust Indenture Act. Any Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However,
the
Indenture Trustee must comply with Section 6.12 hereof.
Section
6.04 [Reserved].
Section
6.05 Indenture
Trustee’s and Securities Administrator’s Disclaimer.
Neither
the Indenture Trustee nor the Securities Administrator shall be responsible
for
and makes no representation as to the validity or adequacy of this Indenture,
the Notes or any other Basic Document, it shall not be accountable for the
Issuing Entity’s use of the proceeds from the Notes, and it shall not be
responsible for any statement of the Issuing Entity in the Indenture or in
any
document issued in connection with the sale of the Notes or in the Notes other
than the Securities Administrator’s certificate of authentication.
Section
6.06 Notice
of Event of Default.
Subject
to Section 5.01, the Indenture Trustee shall promptly mail to each Noteholder
notice of the Event of Default after it is known to a Responsible Officer of
the
Indenture Trustee, unless such Event of Default shall have been waived or cured.
Except in the case of an Event of Default in payment of principal of or interest
on any Note, the Indenture Trustee may withhold the notice if and so long as
a
committee of its Responsible Officers in good faith determines that withholding
the notice is in the best interests of Noteholders.
Section
6.07 Reports
to Holders and Tax Administration.
The
Securities Administrator shall deliver to each Noteholder such information
as
may be required and such other customary information as the Securities
Administrator may determine and/or be required by the Internal Revenue Service
or by a federal or state law or rules or regulations to enable such holder
to
prepare its federal and state income tax returns.
The
Securities Administrator shall prepare and file (or cause to be prepared and
filed), on behalf of the Owner Trustee, all tax returns (if any) and information
reports, tax elections and such annual or other reports of the Issuing Entity
as
are necessary for preparation of tax returns and information reports as provided
in Section 5.03 of the Trust Agreement, including without limitation Form 1099.
All tax returns and information reports shall be signed by the Owner Trustee
or
to the extent permitted by law, the Securities Administrator as provided in
Section 5.03 of the Trust Agreement.
Section
6.08 Compensation.
An
annual fee shall be paid to the Indenture Trustee by the Master Servicer
pursuant to a separate agreement between the Indenture Trustee and the Master
Servicer. In addition, the Indenture Trustee and the Securities Administrator
will each be entitled to recover from the Payment Account pursuant to Section
3.25 of this Indenture all reasonable out-of-pocket expenses, disbursements
and
advances and the expenses of the Indenture Trustee and the Securities
Administrator, respectively, in connection with any breach of this Indenture
or
any claim or legal action (including any pending or threatened claim or legal
action) or otherwise incurred or made by the Indenture Trustee or the Securities
Administrator, respectively, in the administration of the trusts hereunder
(including the reasonable compensation, expenses and disbursements of its
counsel) except any such expense, disbursement or advance as may arise from
its
own negligence or intentional misconduct or which is the responsibility of
the
Noteholders as provided herein. Such compensation and reimbursement obligation
shall not be limited by any provision of law in regard to the compensation
of a
trustee of an express trust. Additionally, each of the Indenture Trustee and
the
Securities Administrator and any director, officer, employee or agent of the
Indenture Trustee or the Securities Administrator shall be indemnified by the
Trust and held harmless against any loss, liability or expense (including
reasonable attorney's fees and expenses) incurred in the administration of
this
Indenture (other than its ordinary out of pocket expenses incurred hereunder)
or
in connection with any claim or legal action relating to (a) the Basic Documents
or (b) the Notes, other than any loss, liability or expense incurred by reason
of its own negligence or intentional misconduct, or which is the responsibility
of the Noteholders as provided herein.
The
Issuing Entity's payment obligations to the Indenture Trustee and Securities
Administrator pursuant to this Section 6.08 shall survive the discharge of
this
Indenture and the termination or resignation of the Indenture Trustee or
Securities Administrator. When the Indenture Trustee or the Securities
Administrator incurs expenses after the occurrence of an Event of Default with
respect to the Issuing Entity, the expenses are intended to constitute expenses
of administration under Title 11 of the United States Code or any other
applicable federal or state bankruptcy, insolvency or similar law.
Section
6.09 Replacement
of Indenture Trustee and the Securities Administrator.
No
resignation or removal of the Indenture Trustee or the Securities Administrator
and no appointment of a successor Indenture Trustee or a successor Securities
Administrator shall become effective until the acceptance of appointment by
the
successor Indenture Trustee pursuant to this Section 6.09. The Indenture Trustee
or the Securities Administrator may resign at any time by so notifying the
Issuing Entity. In the event that the Indenture Trustee determines that a
conflict of interest exists between the Holders of the Class A Notes and the
Holders of any Class of Subordinate Notes, then the Indenture Trustee shall
be
entitled to resign as the indenture trustee for all Classes of Notes other
than
the Class A Notes. In such event the Holders of a majority of Note Principal
Balances of all of the Subordinate Notes shall designate a separate indenture
trustee to represent their interests hereunder. Holders of a majority of Note
Principal Balances of each Class of Notes may remove the Indenture Trustee
by so
notifying the Indenture Trustee and may appoint a successor Indenture Trustee.
The Issuing Entity shall remove the Indenture Trustee or the Securities
Administrator, as applicable, if:
(i) the
Indenture Trustee or the Securities Administrator fails to comply with or
qualify pursuant to the provisions of Section 6.12 hereof;
(ii) the
Indenture Trustee or the Securities Administrator is adjudged a bankrupt or
insolvent;
(iii) a
receiver or other public officer takes charge of the Indenture Trustee or the
Securities Administrator or its property;
(iv) the
Indenture Trustee or the Securities Administrator otherwise becomes incapable
of
acting; or
(v) the
Master Servicer is terminated pursuant to Section 5.01 of the Xxxxx Fargo
Servicing Agreement.
If
the
Indenture Trustee or the Securities Administrator resigns or is removed or
if a
vacancy exists in the office of the Indenture Trustee or the Securities
Administrator for any reason (the Indenture Trustee or the Securities
Administrator in such event being referred to herein as the retiring Indenture
Trustee or the retiring Securities Administrator ), the Issuing Entity shall
promptly appoint a successor Indenture Trustee or successor Securities
Administrator.
Each
of a
successor Indenture Trustee or successor Securities Administrator shall deliver
a written acceptance of its appointment to the retiring Indenture Trustee or
the
retiring Securities Administrator, as applicable, and to the Issuing Entity.
Thereupon, the resignation or removal of the retiring Indenture Trustee or
the
retiring Securities Administrator shall become effective, and the successor
Indenture Trustee or successor Securities Administrator shall have all the
rights, powers and duties of the Indenture Trustee or the Securities
Administrator, as applicable, under this Indenture. The successor Indenture
Trustee or successor Securities Administrator shall each mail a notice of its
succession to Noteholders. The retiring Indenture Trustee or the retiring
Securities Administrator shall promptly transfer all property held by it as
Indenture Trustee or Securities Administrator, as applicable, to the successor
Indenture Trustee or successor Securities Administrator.
If
a
successor Indenture Trustee or successor Securities Administrator does not
take
office within 60 days after the retiring Indenture Trustee or the retiring
Securities Administrator, as applicable, resigns or is removed, the retiring
Indenture Trustee or the retiring Securities Administrator, the Issuing Entity
or the Holders of a majority of Note Principal Balances of the Notes may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee or successor Securities Administrator.
Notwithstanding
the replacement of the Indenture Trustee or the Securities Administrator
pursuant to this Section, the Issuing Entity's obligations under Section 6.07
shall continue for the benefit of the retiring Indenture Trustee or the retiring
Securities Administrator.
Section
6.10 Successor
Indenture Trustee and Securities Administrator by Xxxxxx.
If the
Indenture Trustee or the Securities Administrator consolidates with, merges
or
converts into, or transfers all or substantially all of its corporate trust
business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation, without any further act, shall
be the successor Indenture Trustee or successor Securities Administrator, as
applicable; provided, that such corporation or banking association shall be
otherwise qualified and eligible under Section 6.12 hereof. The Indenture
Trustee and the Securities Administrator shall provide the Rating Agencies
and
the Issuing Entity with prior written notice, and the Noteholders with prompt
written notice, of any such transaction.
If
at the
time such successor or successors by merger, conversion or consolidation to
the
Indenture Trustee shall succeed to the trusts created by this Indenture and
any
of the Notes shall have been authenticated but not delivered, any such successor
to the Indenture Trustee may adopt the certificate of authentication of any
predecessor trustee and deliver such Notes so authenticated; and if at that
time
any of the Notes shall not have been authenticated, any successor to the
Indenture Trustee may authenticate such Notes either in the name of any
predecessor hereunder or in the name of the successor to the Indenture Trustee;
and in all such cases such certificates shall have the full force which is
in
the Notes or in this Indenture provided that the certificate of the Indenture
Trustee shall have.
Section
6.11 Appointment
of Co-Indenture Trustee or Separate Indenture Trustee.
(a)
Notwithstanding any other provisions of this Indenture, at any time, for the
purpose of meeting any legal requirement of any jurisdiction in which any part
of the Trust Estate may at the time be located, the Indenture Trustee shall
have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the Trust Estate, and to vest in such Person
or
Persons, in such capacity and for the benefit of the Noteholders, such title
to
the Trust Estate, or any part hereof, and, subject to the other provisions
of
this Section, such powers, duties, obligations, rights and trusts as the
Indenture Trustee may consider necessary or desirable. No co-trustee or separate
trustee hereunder shall be required to meet the terms of eligibility as a
successor trustee under Section 6.12 hereof.
(b) Every
separate trustee and co-trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and
conditions:
(i) all
rights, powers, duties and obligations conferred or imposed upon the Indenture
Trustee shall be conferred or imposed upon and exercised or performed by the
Indenture 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 Indenture 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 Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust 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 Indenture Trustee;
(ii) no
trustee hereunder shall be personally liable by reason of any act or omission
of
any other trustee hereunder; and
(iii) the
Indenture Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee.
(c) Any
notice, request or other writing given to the Indenture 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 Indenture and the conditions
of this Article VI. 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 Indenture Trustee or
separately, as may be provided therein, subject to all the provisions of this
Indenture, specifically including every provision of this Indenture relating
to
the conduct of, affecting the liability of, or affording protection to, the
Indenture Trustee. Every such instrument shall be filed with the Indenture
Trustee.
(d) Any
separate trustee or co-trustee may at any time constitute the Indenture Trustee,
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 Indenture
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
Indenture Trustee, to the extent permitted by law, without the appointment
of a
new or successor trustee.
Section
6.12 Eligibility;
Disqualification.
The
Indenture Trustee shall at all times be an entity that meets the requirements
of
Section 3(c)(3) under the Investment Company Act of 1940 applicable to a
trustee, and shall have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published annual report of condition and it
or
its parent shall have a long-term debt rating of Baa3 or better by
Xxxxx’x.
Section
6.13 [Reserved].
Section
6.14 Representations
and Warranties.
The
Indenture Trustee hereby represents that:
(i) The
Indenture Trustee is duly organized and validly existing as a national banking
association in good standing under the laws of the United States 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
Indenture Trustee has the power and authority to execute and deliver this
Indenture and to carry out its terms; and the execution, delivery and
performance of this Indenture have been duly authorized by the Indenture Trustee
by all necessary corporate action;
(iii) The
consummation of the transactions contemplated by this Indenture 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
Indenture Trustee or any agreement or other instrument to which the Indenture
Trustee is a party or by which it is bound; and
(iv) To
the
Indenture Trustee’s knowledge, there are no proceedings or investigations
pending or threatened before any court, regulatory body, administrative agency
or other governmental instrumentality having jurisdiction over the Indenture
Trustee or its properties: (A) asserting the invalidity of this Indenture,
(B)
seeking to prevent the consummation of any of the transactions contemplated
by
this Indenture or (C) seeking any determination or ruling that might materially
and adversely affect the performance by the Indenture Trustee of its obligations
under, or the validity or enforceability of, this Indenture.
Section
6.15 Directions
to Indenture Trustee and the Securities Administrator.
The
Indenture Trustee is hereby directed:
(a) to
accept
the pledge of the Mortgage Loans and hold the assets of the Trust in trust
for
the Noteholders;
(b) the
Securities Administrator is hereby directed to (i) authenticate and deliver
the
Notes substantially in the form prescribed by Exhibits A-1, A-2 and A-3 to
this
Indenture in accordance with the terms of this Indenture; and
(c) to
take
all other actions as shall be required to be taken by the Securities
Administrator pursuant to the terms of this Indenture and the other Basic
Documents.
Section
6.16 The
Agents.
The
provisions of this Indenture relating to the limitations of the Indenture
Trustee’s liability and to its rights and protections shall inure also to the
Paying Agent, Note Registrar and Certificate Registrar.
ARTICLE
VII
NOTEHOLDERS’
LISTS AND REPORTS
Section
7.01 Issuing
Entity To Furnish Securities Administrator Trustee Names and Addresses of
Noteholders.
The
Issuing Entity will furnish or cause to be furnished to the Securities
Administrator (a)
not more
than five days after each Record Date, a list, in such form as the Securities
Administrator may reasonably require, of the names and addresses of the Holders
of Notes as of such Record Date, and (b) at such other times as the Securities
Administrator may request in writing, within 30 days after receipt by the
Issuing Entity of any such request, a list of similar form and content as of
a
date not more than 10 days prior to the time such list is furnished; provided,
however, that so long as the Securities Administrator is the Note Registrar,
no
such list shall be required to be furnished to the Securities
Administrator.
Section
7.02 Preservation
of Information; Communications to Noteholders.
(a)
The
Securities Administrator shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Notes contained in the
most recent list furnished to the Securities Administrator as provided in
Section 7.01 hereof and the names and addresses of Holders of Notes received
by
the Securities Administrator in its capacity as Note Registrar. The Securities
Administrator may destroy any list furnished to it as provided in such Section
7.01 upon receipt of a new list so furnished.
(b) Noteholders
may communicate with other Noteholders with respect to their rights under this
Indenture or under the Notes.
Section
7.03 Financial
Information.
For so
long as any of the Notes bearing a restrictive legend remains outstanding and
is
a “restricted security” within the meaning of Rule 144(a)(3) under the
Securities Act, the Issuing Entity shall, during any period in which it is
not
subject to Section 13 or 15(d) of the Exchange Act nor exempt from reporting
pursuant to Rule 12g3-2(b) under such Act, cause the Securities Administrator
to
make available to any Holder of any such Note in connection with any sale
thereof and to any prospective purchaser of any such Note from such Holder,
in
each case upon request, the information specified in, and meeting the
requirements of, Rule 144A(d)(4) under the Securities Act that is in the
Securities Administrator’s possession or reasonably obtainable by it, if
requested, from the Master Servicer (and to the extent such information is
in
the Master Servicer’s possession or is reasonably obtainable by it from the
Servicer).
Unless
the Issuing Entity otherwise determines, the fiscal year of the Issuing Entity
shall end on December 31 of each year.
Section
7.04 Statements
to Noteholders.
(a)
With respect to each Payment Date, the Securities Administrator shall make
available via the Securities Administrator’s website, initially located at
xxx.xxxxxxx.xxx, to each Noteholder and each Certificateholder, the Depositor,
the Issuing Entity, the Seller, the Owner Trustee, the Certificate Paying Agent
and the Rating Agencies, a statement setting forth the following information
as
to the Notes, to the extent applicable:
(i) the
Available Funds, the Carryover Shortfall Amount on each Class of Notes (other
than the Class X Notes and Class B Notes) for such Payment Date;
(ii) (a)
the
amount of such distribution to each Class of Notes (other than the Class X
Notes) applied to reduce the Note Principal Balance thereof, and (b) the
aggregate amount included therein representing Principal
Prepayments;
(iii) the
amount of such distribution to Holders of each Class of Notes allocable to
interest;
(iv) the
amount of any distribution to the Certificates;
(v) if
the
distribution to the Holders of any Class of Notes is less than the full amount
that would be distributable to such Holders if there were sufficient funds
available therefor, the amount of the shortfall;
(vi) the
number and the aggregate Scheduled Principal Balance of the Mortgage Loans
as of
the end of the related Due Period;
(vii) the
aggregate Note Principal Balance of each Class of Notes, after giving effect
to
the amounts distributed on such Payment Date, separately identifying any
reduction thereof due to Realized Losses and the aggregate Note Principal
Balance of the Notes after giving effect to the distribution of principal on
such Payment Date;
(viii) the
number and aggregate Scheduled Principal Balance of Mortgage Loans (a) as to
which the Monthly Payment is delinquent for 31-60 days, 61-90 days, 91 or more
days, respectively, (b) in foreclosure and (c) that have become REO Property,
in
each case as of the end of the preceding calendar month;
(ix) the
amount of any Monthly Advances and Compensating Interest payments;
(x) the
aggregate Realized Losses with respect to the related Payment Date and
cumulative Realized Losses since the Closing Date;
(xi) the
number and aggregate Scheduled Principal Balance of Mortgage Loans repurchased
pursuant to the Mortgage Loan Purchase Agreement for the related Payment Date
and cumulatively since the Closing Date;
(xii) the
book
value (if available) of any REO Property;
(xiii) the
amount of any Prepayment Interest Shortfalls or Relief Act Shortfalls for such
Payment Date;
(xiv) [reserved];
(xv) the
aggregate Scheduled Principal Balance of Mortgage Loans purchased pursuant
to
Section 2.04 of the Sale and Servicing Agreement for the related Payment Date
and cumulatively since the Closing Date;
(xvi) information
regarding any new issuance of securities backed by the same asset pool, any
pool
asset changes, such as additions or removals of Mortgage Loans from the Trust
Estate, if applicable; and
(xvii) any
material changes in the solicitation, credit-granting, underwriting,
origination, acquisition or Mortgage Loan selection criteria or procedures,
as
applicable, used to originate, acquire or select Mortgage Loans for the Trust
Estate.
The
Depositor covenants that if there is a material change in the solicitation,
credit-granting, underwriting, origination, acquisition or Mortgage Loan
selection criteria or procedures, as applicable, used to originate, acquire
or
select Mortgage Loans for the Trust Estate that it will notify the Securities
Administrator five calendar days before each Payment Date, and if no such
notification occurs, the Securities Administrator has no obligation to report
with respect to (xvii). The Depositor covenants to the Securities Administrator
that there will be no new issuance of securities backed by the same asset pool,
so the Securities Administrator will only be responsible in (xvi) above for
reporting any pool asset changes, such as additions or removals of Mortgage
Loans from the Trust Estate.
Items
(iii) and (iv) above shall be presented on the basis of a Note having a $1,000
denomination. In addition, by January 31 of each calendar year following any
year during which the Notes are outstanding, the Securities Administrator shall
furnish a report to each Noteholder of record if so requested in writing at
any
time during each calendar year as to the aggregate of amounts reported pursuant
to (iii) and (iv) with respect to the Notes for such calendar year.
The
Securities Administrator may conclusively rely upon the information provided
by
the Master Servicer to the Securities Administrator in its preparation of
monthly statements to Noteholders.
The
Securities Administrator will make the monthly statements provided for in this
section (and, at its option, any additional files containing the same
information in an alternative format) available each month to Noteholders,
each
Noteholder and each Certificateholder, the Depositor, the Issuing Entity, the
Seller, the Owner Trustee, the Certificate Paying Agent and the Rating Agency
via the Securities Administrator's website. The Securities Administrator’s
website shall initially be located at “xxx.xxxxxxx.xxx.” Assistance in using the
website can be obtained by calling the Securities Administrator’s customer
service desk at (000) 000-0000. Parties that are unable to use the website
are
entitled to have a paper copy mailed to them via first class mail by calling
the
Securities Administrator’s customer service desk and indicating such. The
Securities Administrator may have the right to change the way the monthly
statements are distributed in order to make such distribution more convenient
and/or more accessible to the above parties and the Securities Administrator
shall provide timely and adequate notification to all above parties regarding
any such changes.
The
Securities Administrator shall be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing the monthly statement, and may affix thereto
any disclaimer it deems appropriate in its reasonable discretion (without
suggesting liability on the part of any other party hereto).
ARTICLE
VIII
ACCOUNTS,
DISBURSEMENTS AND RELEASES
Section
8.01 Collection
of Money.
Except
as otherwise expressly provided herein, the Securities Administrator may demand
payment or delivery of, and shall receive and collect, directly and without
intervention or assistance of any fiscal agent or other intermediary, all money
and other property payable to or receivable by the Securities Administrator
pursuant to this Indenture. The Securities Administrator shall apply all such
money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of
any
payment or performance under any agreement or instrument that is part of the
Trust Estate, the Indenture Trustee may take such action as may be appropriate
to enforce such payment or performance, including the institution and
prosecution of appropriate Proceedings. Any such action shall be without
prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article
V.
Section
8.02 Officer’s
Certificate.
The
Indenture Trustee shall receive at least seven Business Days’ notice when
requested by the Issuing Entity to take any action pursuant to Section 8.06(a)
hereof, accompanied by copies of any instruments to be executed, and the
Indenture Trustee shall also require, as a condition to such action, an
Officer’s Certificate, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent
to
the taking of such action have been complied with.
Section
8.03 Termination
Upon Distribution to Noteholders.
This
Indenture and the respective obligations and responsibilities of the Issuing
Entity, the Securities Administrator and the Indenture Trustee created hereby
shall terminate upon the distribution to Noteholders, the Certificate Paying
Agent on behalf of the Certificateholders, the Securities Administrator and
the
Indenture Trustee of all amounts required to be distributed pursuant to Article
III; provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States
to
the Court of St. Xxxxx, living on the date hereof.
Section
8.04 Termination
Upon REMIC Conversion.
Notwithstanding anything to the contrary herein, this Indenture and the
respective obligations and responsibilities of the Issuer, the Securities
Administrator, the Note Registrar, the Paying Agent, the Authenticating Agent
and the Indenture Trustee created hereby shall terminate upon the surrender
of
Notes by the Holders thereof in exchange for the corresponding Classes of REMIC
Class A Notes or REMIC Privately Offered Certificates pursuant to Section 8.06
below in connection with the REMIC Conversion as described in Article XI hereof
and the discharge of this Indenture pursuant to Section 4.10
hereof.
Section
8.05 Release
of Trust Estate.
(a)
Subject
to the payment of its fees and expenses, the Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey the Indenture
Trustee’s interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture, including for the purposes
of any purchase of a Mortgage Loan by the Majority Certificateholder pursuant
to
Section 8.06 of this Indenture. No party relying upon an instrument executed
by
the Indenture Trustee as provided in Article VIII hereunder shall be bound
to
ascertain the Indenture Trustee’s authority, inquire into the satisfaction of
any conditions precedent, or see to the application of any monies.
(b) The
Indenture Trustee shall, at such time as (i) it is notified by the Securities
Administrator that there are no Notes Outstanding and (ii) all sums then due
and
unpaid to the Indenture Trustee pursuant to this Indenture have been paid,
release any remaining portion of the Trust Estate that secured the Notes from
the lien of this Indenture.
(c) The
Indenture Trustee shall release property from the lien of this Indenture
pursuant to this Section 8.05 only upon receipt of a request from the Issuing
Entity or in conjunction with a sale or other transfer of such property required
to occur for the proposed transfer of Privately Offered Notes or Certificates
in
connection with a REMIC Conversion, as described in Section 11.01 herein and
in
the Trust Agreement.
Section
8.06 Surrender
of Notes Upon Final Payment or Receipt of REMIC Securities.
By
acceptance of any Note, the Holder thereof agrees to surrender such Note to
the
Securities Administrator promptly prior to such Noteholder’s receipt of the
final payment thereon or promptly upon receipt of the corresponding Class of
REMIC Class A Note or REMIC Privately Offered Certificate following the
occurrence of the REMIC Conversion as described in Article XI.
Section
8.07 Optional
Redemption of the Mortgage Loans.
(a)
The
Majority Certificateholder shall have the option to purchase the assets of
the
Trust and thereby cause the redemption of the Notes, in whole, but not in part,
on or after the Payment Date on which the aggregate Scheduled Principal Balance
of the Mortgage Loans as of the end of the prior Due Period is 10% or less
of
the Cut-off Date Balance. The aggregate redemption price (the “Redemption
Price”) for the Notes will be equal to 100% of the aggregate outstanding Note
Principal Balance of the Notes as of the Payment Date on which the proposed
redemption will take place in accordance with the foregoing, together with
accrued and unpaid interest thereon at the applicable Note Interest Rate through
such Payment Date (including any related Net Interest Shortfall and Carryover
Shortfall Amount), plus an amount sufficient to pay in full all amounts owing
to
the Indenture Trustee, the Master Servicer and the Securities Administrator,
pursuant to any Basic Document (which amounts shall be specified in writing
upon
request of the Issuing Entity, the Indenture Trustee, the Master Servicer and
the Securities Administrator, as applicable).
(b) In
order
to exercise the foregoing option, the Majority Certificateholder shall provide
written notice of its exercise of such option to the Securities Administrator,
the Issuing Entity, the Owner Trustee and the Master Servicer at least 15 days
prior to its exercise. Following receipt of the notice, the Securities
Administrator shall provide written notice to the Noteholders of the final
payment on the Notes. In addition, the Majority Certificateholder shall, not
less than one Business Day prior to the proposed Payment Date on which such
redemption is to be made, deposit the Redemption Price specified in (a) above
with the Securities Administrator, who shall deposit the Redemption Price into
the Payment Account and shall, on the Payment Date after receipt of the funds,
apply such funds to make final payments of principal and interest on the Notes
in accordance with Section 3.03 hereof and payment to the Securities
Administrator and the Master Servicer as set forth in (a) above, and this
Indenture shall be discharged subject to the provisions of Section 4.10 hereof.
If for any reason the amount deposited by the Majority Certificateholder is
not
sufficient to make such redemption or such redemption cannot be completed for
any reason, (a) the amount so deposited by the Majority Certificateholder with
the Securities Administrator shall be immediately returned to the Majority
Certificateholder in full and shall not be used for any other purpose or be
deemed to be part of the Trust Estate and (b) the Note Principal Balance of
the
Notes shall continue to bear interest at the related Note Interest
Rate.
ARTICLE
IX
SUPPLEMENTAL
INDENTURES
Section
9.01 Supplemental
Indentures Without Consent of Noteholders.
(a)
Without
the consent of the Holders of any Notes but with prior notice to the Rating
Agencies, the Issuing Entity, the Indenture Trustee and the Securities
Administrator, when authorized by an Issuer Request, at any time and from time
to time, may enter into one or more indentures supplemental hereto, in form
satisfactory to the Indenture Trustee and the Securities Administrator, for
any
of the following purposes:
(i) to
correct or amplify the description of any property at any time subject to the
lien of this Indenture, or better to assure, convey and confirm unto the
Indenture Trustee any property subject or required to be subjected to the lien
of this Indenture, or to subject to the lien of this Indenture additional
property;
(ii) to
evidence the succession, in compliance with the applicable provisions hereof,
of
another person to the Issuing Entity, and the assumption by any such successor
of the covenants of the Issuing Entity herein and in the Notes
contained;
(iii) to
add to
the covenants of the Issuing Entity, for the benefit of the Holders of the
Notes, or to surrender any right or power herein conferred upon the Issuing
Entity;
(iv) to
convey, transfer, assign, mortgage or pledge any property to or with the
Indenture Trustee;
(v) to
cure
any ambiguity, to correct or supplement any provision herein or in any
supplemental indenture that may be inconsistent with any other provision herein
or in any supplemental indenture;
(vi) to
make
any other provisions with respect to matters or questions arising under this
Indenture or in any supplemental indenture; provided, that such action shall
not
materially and adversely affect the interests of the Holders of the Notes;
provided further, that such supplemental indenture will be deemed to not
materially and adversely affect the interests of the Holders of the Notes if
a
Rating Confirmation is received with respect to such supplemental indenture;
(vii) to
evidence and provide for the acceptance of the appointment hereunder by a
successor trustee with respect to the Notes and to add to or change any of
the
provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one trustee, pursuant to
the
requirements of Article VI hereof; or
(viii) to
amend
the provisions hereof to add or eliminate or change any provision relating
to
the REMIC Conversion or activities related thereto;
provided,
however,
that no
such indenture supplements shall be entered into unless the Indenture Trustee
and the Securities Administrator shall have received an Opinion of Counsel
not
at the expense of the Indenture Trustee or the Securities Administrator as
to
the enforceability of any such indenture supplement and to the effect that
(i)
such indenture supplement is permitted hereunder and such indenture supplement
will not materially and adversely affect the Holders of the Notes (other than
in
the case of clause (viii) above) and (ii) entering into such indenture
supplement will not result in a “significant modification” of the Class A-1,
Class A-2, Class A-3 and Class A-4 Notes and any other Classes of Notes with
respect to which a "will be debt" opinion has been rendered by nationally
recognized tax counsel and furnished to the Securities Administrator under
Treasury Regulation Section 1.1001-3 (other than in the case of clause (viii)
above) or adversely affect the indebtedness status of such Notes.
The
Indenture Trustee and the Securities Administrator are hereby authorized to
join
in the execution of any such supplemental indenture and to make any further
appropriate agreements and stipulations that may be therein
contained.
(b) The
Issuing Entity, the Securities Administrator and the Indenture Trustee, when
authorized by an Issuer Request, in the case of the Securities Administrator
and
the Indenture Trustee may, also without the consent of any of the Holders of
the
Notes and prior notice to the Rating Agency, enter into an indenture or
indentures supplemental hereto for the purpose of adding any provisions to,
or
changing in any manner or eliminating any of the provisions of, this Indenture
or of modifying in any manner the rights of the Holders of the Notes under
this
Indenture; provided, however, that such action as evidenced by an Opinion of
Counsel, (i) is permitted by this Indenture, (ii) shall not adversely affect
in
any material respect the interests of any Noteholder and (iii) shall not cause
the Issuing Entity to be subject to an entity level tax for federal income
tax
purposes.
Section
9.02 Supplemental
Indentures With Consent of Noteholders.
The
Issuing Entity, the Securities Administrator and the Indenture Trustee, when
authorized by an Issuer Request in the case of the Securities Administrator
and
the Indenture Trustee, also may, with prior notice to the Rating Agencies and,
with the consent Holders of not less than a majority of the Note Principal
Balance of each Class of Notes affected thereby, by Act (as defined in Section
10.03 hereof) of such Holders delivered to the Issuing Entity, the Securities
Administrator and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing
in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that no such supplemental indenture shall, without
the consent of the Holder of each Note affected thereby:
(i) change
the date of payment of any installment of principal of or interest on any Note,
or reduce the principal amount thereof or the interest rate thereon, change
the
provisions of this Indenture relating to the application of collections on,
or
the proceeds of the sale of, the Trust Estate and to payment of principal of
or
interest on the Notes, or change any place of payment where, or the coin or
currency in which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of the provisions of this Indenture
requiring the application of funds available therefor, as provided in Article
V,
to the payment of any such amount due on the Notes on or after the respective
due dates thereof;
(ii) reduce
the percentage of the Note Principal Balances of the Notes, or any Class of
Notes, the consent of the Holders of which is required for any such supplemental
indenture, or the consent of the Holders of which is required for any waiver
of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture;
(iii) modify
or
alter the provisions of the proviso to the definition of the term “Outstanding”
or modify or alter the exception in the definition of the term
“Holder”;
(iv) reduce
the percentage of the Note Principal Balances of the Notes, or any Class of
Notes, required to direct the Indenture Trustee to direct the Issuing Entity
to
sell or liquidate the Trust Estate pursuant to Section 5.04 hereof;
(v) modify
any provision of this Section 9.02 except to increase any percentage specified
herein or to provide that certain additional provisions of this Indenture or
the
Basic Documents cannot be modified or waived without the consent of the Holder
of each Note affected thereby;
(vi) modify
any of the provisions of this Indenture in such manner as to affect the
calculation of the amount of any payment of interest or principal due on any
Note on any Payment Date (including the calculation of any of the individual
components of such calculation); or
(vii) permit
the creation of any lien ranking prior to or on a parity with the lien of this
Indenture with respect to any part of the Trust Estate or, except as otherwise
permitted or contemplated herein, terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Note of the
security provided by the lien of this Indenture;
and
provided,
further,
that
such action shall not, as evidenced by an Opinion of Counsel, cause the Issuing
Entity to be subject to an entity level tax for federal income tax
purposes.
Any
such
action shall not adversely affect in any material respect the interest of any
Holder (other than a Holder who shall consent to such supplemental indenture)
as
evidenced by an Opinion of Counsel (provided by the Person requesting such
supplemental indenture) delivered to the Indenture Trustee and the Securities
Administrator.
It
shall
not be necessary for any Act of Noteholders under this Section 9.02 to approve
the particular form of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
Promptly
after the execution by the Issuing Entity, the Securities Administrator and
the
Indenture Trustee of any supplemental indenture pursuant to this Section 9.02,
the Securities Administrator shall mail to the Holders of the Notes to which
such amendment or supplemental indenture relates a notice setting forth in
general terms the substance of such supplemental indenture. Any failure of
the
Securities Administrator to mail such notice, or any defect therein, shall
not,
however, in any way impair or affect the validity of any such supplemental
indenture.
Section
9.03 Execution
of Supplemental Indentures.
In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modification thereby of the trusts
created by this Indenture, the Indenture Trustee and the Securities
Administrator shall be entitled to receive, and subject to Sections 6.01 and
6.02 hereof, shall be fully protected in relying upon, an Opinion of Counsel
not
at the expense of the Indenture Trustee or the Securities Administrator stating
that the execution of such supplemental indenture is authorized or permitted
by
this Indenture. The Indenture Trustee and the Securities Administrator each
may,
but shall not be obligated to, enter into any such supplemental indenture that
affects the Indenture Trustee’s or the Securities Administrator’s own rights,
duties, liabilities or immunities under this Indenture or
otherwise.
Section
9.04 Effect
of Supplemental Indenture.
Upon
the execution of any supplemental indenture pursuant to the provisions hereof,
this Indenture shall be and shall be deemed to be modified and amended in
accordance therewith with respect to the Notes affected thereby, and the
respective rights, limitations of rights, obligations, duties, liabilities
and
immunities under this Indenture of the Indenture Trustee, the Securities
Administrator, the Issuing Entity and the Holders of the Notes shall thereafter
be determined, exercised and enforced hereunder subject in all respects to
such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
Section
9.05 Conformity
with Trust Indenture Act.
Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the Trust Indenture
Act
as then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
Section
9.06 Reference
in Notes to Supplemental Indentures.
Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Securities Administrator
shall, bear a notation in form approved by the Securities Administrator as
to
any matter provided for in such supplemental indenture. If the Issuing Entity
or
the Securities Administrator shall so determine, new Notes so modified as to
conform, in the opinion of the Securities Administrator and the Issuing Entity,
to any such supplemental indenture may be prepared and executed by the Issuing
Entity and authenticated and delivered by the Securities Administrator in
exchange for Outstanding Notes.
ARTICLE
X
MISCELLANEOUS
Section
10.01 Compliance
Certificates and Opinions, etc.
(a)
Upon any
application or request by the Issuing Entity to the Indenture Trustee to take
any action under any provision of this Indenture, the Issuing Entity shall
furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with and (ii) an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any,
have
been complied with, except that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.
Every
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a
statement that each signatory of such certificate or opinion has read or has
caused to be read such covenant or condition and the definitions herein relating
thereto;
(2) a
brief
statement as to the nature and scope of the examination or investigation upon
which the statements or opinions contained in such certificate or opinion are
based;
(3) a
statement that, in the opinion of each such signatory, such signatory has made
such examination or investigation as is necessary to enable such signatory
to
express an informed opinion as to whether or not such covenant or condition
has
been complied with;
(4) a
statement as to whether, in the opinion of each such signatory, such condition
or covenant has been complied with; and
(5) if
the
signatory of such certificate or opinion is required to be Independent, the
statement required by the definition of the term “Independent”.
(b) (i)
Prior
to the deposit of any Collateral or other property or securities with the
Indenture Trustee that is to be made the basis for the release of any property
or securities subject to the lien of this Indenture, the Issuing Entity shall,
in addition to any obligation imposed in Section 10.01 (a) or elsewhere in
this
Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying
or stating the opinion of each person signing such certificate as to the fair
value (within 90 days prior to such deposit) to the Issuing Entity of the
Collateral or other property or securities to be so deposited and a report
from
a nationally recognized accounting firm verifying such value.
(ii) Whenever
the Issuing Entity is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the
matters described in clause (i) above, the Issuing Entity shall also deliver
to
the Indenture Trustee an Independent Certificate from a nationally recognized
accounting firm as to the same matters, if the fair value of the securities
to
be so deposited and of all other such securities made the basis of any such
withdrawal or release since the commencement of the then current fiscal year
of
the Issuing Entity, as set forth in the certificates delivered pursuant to
clause (i) above and this clause (ii), is 10% or more of the Note Principal
Balances of the Notes, but such a certificate need not be furnished with respect
to any securities so deposited, if the fair value thereof as set forth in the
related Officer’s Certificate is less than $25,000 or less than one percent of
the then outstanding Note Principal Balances of the Notes.
(iii) Whenever
any property or securities are to be released from the lien of this Indenture,
the Issuing Entity shall also furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days prior to such release) of
the
property or securities proposed to be released and stating that in the opinion
of such person the proposed release will not impair the security under this
Indenture in contravention of the provisions hereof.
(iv) Whenever
the Issuing Entity is required to furnish to the Indenture Trustee an Officer’s
Certificate certifying or stating the opinion of any signer thereof as to the
matters described in clause (iii) above, the Issuing Entity shall also furnish
to the Indenture Trustee an Independent Certificate as to the same matters
if
the fair value of the property or securities and of all other property or
securities released from the lien of this Indenture since the commencement
of
the then-current calendar year, as set forth in the certificates required by
clause (iii) above and this clause (iv), equals 10% or more of the Note
Principal Balances of the Notes, but such certificate need not be furnished
in
the case of any release of property or securities if the fair value thereof
as
set forth in the related Officer’s Certificate is less than $25,000 or less than
one percent of the then outstanding Note Principal Balances of the
Notes.
Section
10.02 Form
of Documents Delivered to Indenture Trustee.
In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters
be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any
certificate or opinion of an Authorized Officer of the Issuing Entity may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of,
or representations by, counsel, unless such officer knows, or in the exercise
of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based
are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate
or
opinion of, or representations by, an officer or officers of the Seller or
the
Issuing Entity, stating that the information with respect to such factual
matters is in the possession of the Seller or the Issuing Entity, unless such
counsel knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to such matters are
erroneous.
Where
any
Person is required to make, give or execute two or more applications, requests,
consents, certificates, statements, opinions or other instruments under this
Indenture, they may, but need not, be consolidated and form one
instrument.
Whenever
in this Indenture, in connection with any application or certificate or report
to the Indenture Trustee, it is provided that the Issuing Entity shall deliver
any document as a condition of the granting of such application, or as evidence
of the Issuing Entity’s compliance with any term hereof, it is intended that the
truth and accuracy, at the time of the granting of such application or at the
effective date of such certificate or report (as the case may be), of the facts
and opinions stated in such document shall in such case be conditions precedent
to the right of the Issuing Entity to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,
be
construed to affect the Indenture Trustee’s right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
Section
10.03 Acts
of Noteholders.
(a)
Any
request, demand, authorization, direction, notice, consent, waiver or other
action provided by this Indenture to be given or taken by Noteholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Noteholders in person or by agents duly appointed in
writing; and except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Indenture Trustee, and, where it is hereby expressly required, to the Issuing
Entity. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the “Act” of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 6.01 hereof)
conclusive in favor of the Indenture Trustee and the Issuing Entity, if made
in
the manner provided in this Section 10.03 hereof.
(b) The
fact
and date of the execution by any person of any such instrument or writing may
be
proved in any manner that the Indenture Trustee deems sufficient.
(c) The
ownership of Notes shall be proved by the Note Registrar.
(d) Any
request, demand, authorization, direction, notice, consent, waiver or other
action by the Holder of any Notes shall bind the Holder of every Note issued
upon the registration thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuing Entity in reliance thereon, whether or not notation
of
such action is made upon such Note.
Section
10.04 Notices
etc., to Indenture Trustee Issuing Entity, Securities Administrator and Rating
Agencies.
Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Noteholders or other documents provided or permitted by this Indenture shall
be
in writing and if such request, demand, authorization, direction, notice,
consent, waiver or act of Noteholders is to be made upon, given or furnished
to
or filed with:
(i) the
Indenture Trustee by any Noteholder or by the Issuing Entity shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to
or
with the Indenture Trustee at the Corporate Trust Office. The Indenture Trustee
shall promptly transmit any notice received by it from the Noteholders to the
Issuing Entity;
(ii) the
Securities Administrator by any Noteholder or by the Issuing Entity shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with the Securities Administrator at Xxxxx Fargo Bank, N.A.,
P.O.
Box 98, Columbia Maryland 21046 (or, in the case of overnight deliveries, 0000
Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000), Attn: Bear Xxxxxxx ARM Trust
2006-1, or such other address as may hereafter be furnished to the other parties
hereto in writing. The Securities Administrator shall promptly transmit any
notice received by it from the Noteholders to the Issuing Entity;
or
(iii) the
Issuing Entity by the Indenture Trustee or by any Noteholder shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing and
mailed first-class, postage prepaid to the Issuing Entity addressed to: Bear
Xxxxxxx ARM 2006-1, in care of Wilmington Trust Company, Xxxxxx Square North
0000 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000-0000; Attention: Corporate
Trust Services, or at any other address previously furnished in writing to
the
Indenture Trustee by the Issuing Entity. The Issuing Entity shall promptly
transmit any notice received by it from the Noteholders to the Indenture
Trustee.
Notices
required to be given to the Rating Agencies by the Issuing Entity, the Indenture
Trustee, the Securities Administrator or the Owner Trustee shall be in writing,
mailed first-class postage pre-paid: in the case of Moody’s, to Moody’s, at the
following address: Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000; and in the case of Fitch, Xxx Xxxxx Xxxxxx Xxxxx - 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000; or as to each of the foregoing, at such other address
as shall be designated by written notice to the other parties.
Section
10.05 Notices
to Noteholders; Waiver.
Where
this Indenture provides for notice to Noteholders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if
made, given, furnished or filed in writing and mailed, first-class, postage
prepaid to each Noteholder affected by such event, at such Person’s address as
it appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Noteholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Noteholder
shall
affect the sufficiency of such notice with respect to other Noteholders, and
any
notice that is mailed in the manner herein provided shall conclusively be
presumed to have been duly given regardless of whether such notice is in fact
actually received.
Where
this Indenture provides for notice in any manner, such notice may be waived
in
writing by any Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such notice. Waivers
of
notice by Noteholders shall be filed with the Indenture Trustee but such filing
shall not be a condition precedent to the validity of any action taken in
reliance upon such a waiver.
In
case,
by reason of the suspension of regular mail service as a result of a strike,
work stoppage or similar activity, it shall be impractical to mail notice of
any
event to Noteholders when such notice is required to be given pursuant to any
provision of this Indenture, then any manner of giving such notice as shall
be
satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving
of such notice.
Where
this Indenture provides for notice to the Rating Agency, failure to give such
notice shall not affect any other rights or obligations created hereunder,
and
shall not under any circumstance constitute an Event of Default.
Section
10.06 Conflict
with Trust Indenture Act.
If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this Indenture by any of the provisions
of
the Trust Indenture Act, such required provision shall control.
The
provisions of TIA §§ 310 through 317 that impose duties on any Person (including
the provisions automatically deemed included herein unless expressly excluded
by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein.
Section
10.07 Effect
of Headings.
The
Article and Section headings herein are for convenience only and shall not
affect the construction hereof.
Section
10.08 Successors
and Assigns.
All
covenants and agreements in this Indenture and the Notes by the Issuing Entity
shall bind its successors and assigns, whether so expressed or not. All
agreements of the Indenture Trustee in this Indenture shall bind its successors,
co-trustees and agents.
Section
10.09 Separability.
In case
any provision in this Indenture or in the Notes shall be invalid, illegal or
unenforceable, the validity, legality, and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
Section
10.10 Legal
Holidays.
In any
case where the date on which any payment is due shall not be a Business Day,
then (notwithstanding any other provision of the Notes or this Indenture)
payment need not be made on such date, but may be made on the next succeeding
Business Day with the same force and effect as if made on the date on which
nominally due, and no interest shall accrue for the period from and after any
such nominal date.
Section
10.11 GOVERNING
LAW.
THIS
INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS (OTHER THAN SECTIONS
5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAWS, WHICH SHALL APPLY
HERETO), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL
BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section
10.12 Counterparts.
This
Indenture may be executed in any number of counterparts, each of which when
so
executed shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
Section
10.13 Recording
of Indenture.
If this
Indenture is subject to recording in any appropriate public recording offices,
such recording is to be effected by the Issuing Entity and at its expense
accompanied by an Opinion of Counsel at its expense (which may be counsel to
the
Indenture Trustee or any other counsel reasonably acceptable to the Indenture
Trustee) to the effect that such recording is necessary either for the
protection of the Noteholders or any other Person secured hereunder or for
the
enforcement of any right or remedy granted to the Indenture Trustee under this
Indenture.
Section
10.14 Issuing
Entity Obligation.
No
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuing Entity, the Owner Trustee or the Securities Administrator on
the
Notes or under this Indenture or any certificate or other writing delivered
in
connection herewith or therewith, against (i) the Indenture Trustee or the
Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest
in
the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Securities Administrator, the Owner Trustee
in its individual capacity, any holder of a beneficial interest in the Issuing
Entity, the Securities Administrator, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee
in
its individual capacity, except as any such Person may have expressly agreed
(it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes
of
this Indenture, in the performance of any duties or obligations of the Issuing
Entity hereunder, the Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Article VI, VII and VIII of the Trust
Agreement.
Section
10.15 No
Petition.
The
Indenture Trustee and the Securities Administrator, by entering into this
Indenture, each Noteholder, by accepting a Note and each Certificateholder,
by
accepting a Certificate, hereby covenant and agree that they will not at any
time prior to one year from the date of termination hereof, institute against
the Depositor or the Issuing Entity, or join in any institution against the
Depositor or the Issuing Entity 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 Notes, this Indenture or any of the Basic Documents;
provided however, that nothing herein shall prohibit the Indenture Trustee
from
filing proofs of claim in any proceeding.
Section
10.16 Inspection.
The
Issuing Entity agrees that, at its expense, on reasonable prior notice, it
shall
permit any representative of the Indenture Trustee or the Securities
Administrator, during the Issuing Entity’s normal business hours, to examine all
the books of account, records, reports and other papers of the Issuing Entity,
to make copies and extracts therefrom, to cause such books to be audited by
Independent certified public accountants, and to discuss the Issuing Entity’s
affairs, finances and accounts with the Issuing Entity’s officers, employees,
and Independent certified public accountants, all at such reasonable times
and
as often as may be reasonably requested. The Indenture Trustee shall cause
its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee or the Securities Administrator may reasonably determine
that
such disclosure is consistent with its obligations hereunder.
ARTICLE
XI
TMP
TRIGGER EVENT AND REMIC CONVERSION
Section
11.01 Events
to Occur Upon TMP Trigger Event.
(a)
Upon the receipt by the Owner Trustee, the Depositor, the Securities
Administrator and the Indenture Trustee of a written notice substantially in
the
form of Exhibit L to the Trust Agreement from the Single Owner of their intent
to sell or otherwise transfer the Certificates or the Privately Offered Notes
in
a transaction such that, following the sale or other transfer, there will not
be
a Single Owner, a TMP Trigger Event shall occur.
(b) Upon
a
TMP Trigger Event and in furtherance of a REMIC Conversion, the Issuing Entity
shall request that the Indenture Trustee release any REO Properties and any
other Non-REMIC Eligible Assets from the lien of this Indenture and the Issuing
Entity shall transfer such portion of the Trust Estate to the Servicer. The
Indenture Trustee shall execute instruments to release such property from the
lien of this Indenture, or convey the Indenture Trustee’s interest in the same,
in accordance with Section 8.05.
(c) Pursuant
to the Sale and Servicing Agreement and the Xxxxx Fargo Servicing Agreement,
prior to the REMIC Conversion, the Master Servicer shall cause the Servicer
to
(i) solicit at least two bids for the REO Properties and any other Non-REMIC
Eligible Assets then existing in the Trust Estate, at least one of which shall
be sufficient not to result in the allocation of any Realized Losses to any
of
the Senior Notes and (ii) sell such REO Properties and Non-REMIC Eligible Assets
on behalf of the Issuing Entity to a third party at their fair market value.
The
Master Servicer shall, or shall cause the Servicer to, provide the Owner
Trustee, the Indenture Trustee and the Depositor with prompt notice of the
completion of such Sale. Upon completion of such Sale, the Servicer shall remit
any proceeds of such Sale to the Master Servicer pursuant to the Xxxxx Fargo
Servicing Agreement. Immediately upon receipt of any such proceeds, the Master
Servicer shall remit such amounts to the Securities Administrator for deposit
in
the Payment Account.
(d) On
the
Special Payment Date, the Securities Administrator shall distribute the proceeds
from the Sale described in Section 11.01(c) to the Noteholders in the manner
and
order of priority set forth in Article III and shall allocate any Realized
Losses to the Privately Offered Notes as a result of such Sale in accordance
with Section 3.24.
(e) As
a
condition to any REMIC Conversion, the Single Owner shall pay, or cause to
be
paid, any additional and ongoing expenses in connection with, or any expenses
necessary to accomplish, any REMIC Conversion to the extent not otherwise
required to be paid hereunder.
(f) The
Depositor shall cause the formation of a new trust pursuant to the Underlying
REMIC Pooling and Servicing Agreement for which one or more REMIC elections
shall be made. Upon the completion of the transfer and exchange set forth in
Section 11.01(h), the Issuing Entity shall transfer the REMIC Class A
Certificates to the Indenture Trustee in connection with the creation of the
REMIC Class A Indenture under which a REMIC election shall be made with respect
to such REMIC Class A Notes. The Noteholders shall surrender their Notes in
exchange for the corresponding classes of REMIC Class A Notes and REMIC
Privately Offered Certificates pursuant to Section 8.06. The Depositor shall
cause such REMIC Class A Notes to be issued in book-entry form to be registered
in the name of a nominee designated by the Depository, and the REMIC
Certificates to be issued in physical form, in each case in the face amount
of
the corresponding Class A Notes or Privately Offered Notes in accordance with
Section 4.02.
(g) Simultaneously
with a REMIC Conversion, the Indenture shall be discharged in accordance with
Sections 4.10 and 8.04. In connection therewith, the assets remaining in the
Trust Estate shall be released from the lien of this Indenture.
(h) In
connection with a REMIC Conversion, the Issuing Entity concurrently with the
execution and delivery of the new REMIC Class A Indenture and new Underlying
REMIC Trust Pooling and Servicing Agreement shall transfer and assign to the
Underlying REMIC Trust without recourse all its right, title and interest in
and
to the aforementioned items then remaining in the Trust Estate for the benefit
of the holders of the REMIC Certificates. At such time, the Depositor shall
transfer and assign in trust to the Issuing Entity without recourse all the
right, title and interest in and to the REMIC Class A Certificates for the
benefit of the holders of the REMIC Class A Notes and the new certificate then
issued by the Issuing Entity representing the residual interest in the REMIC
elected by the Issuing Entity. The Issuing Entity shall acknowledge receipt
of
the REMIC Class A Certificates and declare that it holds and will hold the
same
in trust for the exclusive use and benefit of the holders of the REMIC Class
A
Notes and such new residual certificate.
Section
11.02. Acts
in Furtherance of REMIC Conversion.
Each of
the parties acknowledges and agrees that the purpose of this Article XI is
to
facilitate any REMIC Conversion upon the occurrence of a TMP Trigger Event.
Therefore, each of the parties hereto agree that it shall comply with reasonable
requests made by any of the other parties hereto and the Single Owner that
provides notice of a TMP Trigger Event to cause such REMIC Conversion. This
Indenture may be amended or supplemented to provide for any act necessary to
cause such REMIC Conversion as agreed upon by the parties hereto in accordance
with Article IX.
IN
WITNESS WHEREOF, the Issuing Entity, the Securities Administrator and the
Indenture 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.
|
BEAR
XXXXXXX ARM TRUST 2006-1, as
Issuing
Entity
|
|
|
By:
|
Wilmington
Trust Company, not in its
individual
capacity but solely as Owner Trustee
|
|
By:
|
/s/
Xxxxxxx X. Xxxx
|
|
Name:
|
Xxxxxxx
X. Xxxx
|
|
Title:
|
Financial
Services Officer
|
|
XXXXX
FARGO BANK, N.A., as
Securities
Administrator
|
|
|
By:
|
/s/
Xxxxxx X. Xxxxxx
|
|
Name:
|
Xxxxxx
X. Xxxxxx
|
|
Title:
|
Vice
President
|
|
U.S.
Bank National Association, as Indenture Trustee
|
|
|
By:
|
/s/
Xxxxx Xxxxx
|
|
Name:
|
Xxxxx
Xxxxx
|
|
Title:
|
Vice
President
|
|
STATE
OF MARYLAND
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF BALTIMORE
|
)
|
|
On
the
28th day of February 2006 before me, a notary public in and for said State,
personally appeared Xxxxxx X. Xxxxxx, known to me to be a Vice President of
Xxxxx Fargo Bank, N.A., the entity that executed the within instrument, and
also
known to me to be the person who executed it on behalf of said entity, and
acknowledged to me that such entity executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
|
Notary
Public
|
[Notarial
Seal]
|
STATE
OF DELAWARE
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF ___________
|
)
|
|
On
this
28th day of February 2006, before me personally appeared Xxxxxxx X. Xxxx to
me
known, who being by me duly sworn, did depose and say, that he/she is a
Financial Services Officer of the Owner Trustee, one of the entities described
in and which executed the above instrument; and that he signed her name thereto
by like order.
|
Notary
Public
|
|
NOTARY
PUBLIC
|
[NOTARIAL
SEAL]
|
STATE
OF MASSACHUSETTS
|
)
|
|
|
)
|
ss.:
|
|
|
COUNTY
OF SUFFOLK
|
)
|
|
On
this
28th day of February 2006, before me personally appeared Xxxxx Xxxxx to me
known, who being by me duly sworn, did depose and say, that she is a Vice
President of the Indenture Trustee, one of the corporations described in and
which executed the above instrument; and that he signed his name thereto by
like
order.
|
Notary
Public
|
|
NOTARY
PUBLIC
|
[NOTARIAL
SEAL]
EXHIBIT
A-1
FORM
OF
CLASS A NOTES
UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE SECURITIES ADMINISTRATOR OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY NOTE ISSUED
IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO
ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN IS DEEMED
TO
REPRESENT THAT EITHER (1) IT IS NOT ACQUIRING THE NOTE WITH PLAN ASSETS OR
(2)
(A) THE ACQUISITION, HOLDING AND TRANSFER OF A NOTE WILL NOT GIVE RISE TO
A
NONEXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975
OF
THE CODE AND (B) THE NOTES ARE RATED INVESTMENT GRADE OR BETTER AND SUCH
PERSON
BELIEVES THAT THE NOTES ARE PROPERLY TREATED AS INDEBTEDNESS WITHOUT SUBSTANTIAL
EQUITY FEATURES FOR PURPOSES OF THE DOL REGULATIONS, AND AGREES TO SO TREAT
THE
NOTES. ALTERNATIVELY, REGARDLESS OF THE RATING OF THE NOTES, SUCH PERSON
MAY
PROVIDE THE INDENTURE TRUSTEE AND THE NOTE REGISTRAR WITH AN OPINION OF COUNSEL,
WHICH OPINION OF COUNSEL WILL NOT BE AT THE EXPENSE OF THE ISSUING ENTITY,
THE
SELLER, THE OWNER TRUSTEE, THE INDENTURE TRUSTEE, THE SECURITIES ADMINISTRATOR,
THE NOTE REGISTRAR, THE MASTER SERVICER OR ANY SERVICER, WHICH OPINES THAT
THE
ACQUISITION, HOLDING AND TRANSFER OF SUCH NOTE OR INTEREST THEREIN IS
PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT
PROHIBITED TRANSACTION UNDER ERISA OR SECTION 4975 OF THE CODE AND WILL NOT
SUBJECT THE ISSUING ENTITY, THE SELLER, THE DEPOSITOR, THE OWNER TRUSTEE,
THE
INDENTURE TRUSTEE, THE SECURITIES ADMINISTRATOR, THE NOTE REGISTRAR, THE
MASTER
SERVICER OR ANY SERVICER TO ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN
IN
THE INDENTURE.
THE
HOLDER OF THIS NOTE OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE DEEMED
TO
REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN THE
INDENTURE.
THIS
NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUING ENTITY, AND IS LIMITED IN
RIGHT
OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE
INDENTURE REFERRED TO BELOW. THE ISSUING ENTITY IS NOT OTHERWISE PERSONALLY
LIABLE FOR PAYMENTS ON THIS NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN
ON THE FACE HEREOF.
BY
ACCEPTANCE OF THIS NOTE, THE HOLDER HEREOF AGREES TO SURRENDER THIS NOTE
TO THE
SECURITIES ADMINISTRATOR PROMPTLY UPON RECEIPT OF THE CORRESPONDING CLASS
OF
REMIC CLASS A NOTES FOLLOWING THE OCCURRENCE OF THE REMIC CONVERSION AS
DESCRIBED IN THE INDENTURE.
BEAR
XXXXXXX ARM TRUST 2006-1
MORTGAGE-BACKED
NOTES, SERIES 2006-1
CLASS
A-[1][2][3][4]
|
AGGREGATE
NOTE PRINCIPAL
BALANCE:
$[________________]
|
NOTE
INTEREST
RATE:
Adjustable Rate
|
|
INITIAL
NOTE PRINCIPAL
BALANCE
OF THIS NOTE: $[_____________]
|
NOTE
NO. 1
|
|
CUSIP
NO: [_______________]
|
|
BEAR
XXXXXXX ARM TRUST 2006-1 (the “Issuing Entity”), a Delaware statutory trust, for
value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of $[____________________] in monthly installments on the
twenty-fifth day of each month or, if such day is not a Business Day, the next
succeeding Business Day (each a “Payment Date”), commencing in March 2006 and
ending on or before the Payment Date occurring in February 2036 (the “Final
Scheduled Payment Date”) and to pay interest on the Note Principal Balance of
this Note (this “Note”) outstanding from time to time as provided
below.
This
Note
is one of a duly authorized issue of the Issuing Entity’s Mortgage-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture dated as of February 28,
2006 (the “Indenture”), among the Issuing Entity, Xxxxx Fargo Bank, N.A., as
Securities Administrator and U.S. Bank National Association, as indenture
trustee (the “Indenture Trustee”, which term includes any successor Indenture
Trustee under the Indenture) to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights
thereunder of the Issuing Entity, the Indenture Trustee, and the Holders of
the
Notes and the terms upon which the Notes are to be authenticated and delivered.
All terms used in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Principal Balance”
of a Note as of any date of determination is equal to the initial Note Principal
Balance thereof, minus (i) all amounts distributed in respect of principal
with
respect to such Class of Notes and (ii) the aggregate amount of any reductions
in the Note Principal Balance thereof deemed to have occurred in connection
with
allocations of Realized Losses on all prior Payment Dates in accordance with
the
Indenture, taking account of its applicable Loss Allocation Limitation, plus
(iii) any Subsequent Recoveries allocated thereto.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note’s pro rata share of the aggregate payments on all Class A-[1][2][3][4]
Notes as described above, and shall be applied as between interest and principal
as provided in the Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Scheduled Payment Date.
By
acceptance of this Note, the Holder hereof agrees to surrender this Note to
the
Securities Administrator promptly upon receipt of the corresponding Class of
REMIC Class A Notes following the occurrence of the REMIC Conversion as
described in the Indenture.
The
Mortgage Loans are subject to purchase in whole, but not in part, by the
Majority Certificateholder on any Payment Date on or after the Payment Date
on
which the aggregate Scheduled Principal Balance of the Mortgage Loans as of
the
end of the prior Due Period is 10% or less of the Cut-off Date Scheduled
Principal Balance of the Mortgage Loans.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class A-[1][2][3][4],
and each Holder hereof, by its acceptance of this Note, agrees that (i) such
Note will be limited in right of payment to amounts available from the Trust
Estate as provided in the Indenture and (ii) such Holder shall have no recourse
to the Issuing Entity, the Owner Trustee, the Indenture Trustee, the Depositor,
the Seller, the Master Servicer, the Securities Administrator or any of their
respective affiliates, or to the assets of any of the foregoing entities, except
the assets of the Issuing Entity pledged to secure the A-[1][2][3][4] Notes
pursuant to the Indenture and the rights conveyed to the Issuing Entity under
the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person’s address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Securities
Administrator at least five Business Days prior to the Record Date, any payment
of principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Note
effected by payments of principal made on any Payment Date shall be binding
upon
all Holders of this Note and of any Note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, whether or not
such
payment is noted on such Note. The final payment of this Note shall be payable
upon presentation and surrender thereof on or after the Payment Date thereof
at
the office designated by the Securities Administrator or the office or agency
of
the Issuing Entity maintained by it for such purpose pursuant to Section 4.02
of
the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note,
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Principal
Balance of the Notes, the amount payable to the Holder of this Note will be
equal to the sum of the unpaid Note Principal Balance of this Note, together
with accrued and unpaid interest thereon as described in the Indenture. The
Indenture provides that, notwithstanding the acceleration of the maturity of
the
Notes, under certain circumstances specified therein, all amounts collected
as
proceeds of the Trust Estate securing the Notes or otherwise shall continue
to
be applied to payments of principal of and interest on the Notes as if they
had
not been declared due and payable.
The
failure to pay any Net Interest Shortfall at any time when funds are not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
The
Holder of this Note or Beneficial Owner of any interest herein is deemed to
represent that either (1) it is not acquiring the Note with Plan Assets or
(2)
(A) the acquisition, holding and transfer of a Note will not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975
of
the Code and (B) the Notes are rated investment grade or better and such person
believes that the Notes are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat
the
Notes. Alternatively, regardless of the rating of the Notes, such person may
provide the Indenture Trustee and the Note Registrar with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuing Entity,
the
Seller, the Owner Trustee, the Indenture Trustee, the Master Servicer, the
Securities Administrator, the Note Registrar or any servicer, which opines
that
the acquisition, holding and transfer of such Note or interest therein is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Issuing Entity, the Seller, the Depositor, the Owner Trustee, the
Indenture Trustee, the Note Registrar, the Securities Administrator, the Master
Servicer or any servicer to any obligation in addition to those undertaken
in
the Indenture and the other Basic Documents.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Securities Administrator,
one or more new Notes of any authorized denominations and of a like aggregate
then outstanding Note Principal Balance, will be issued to the designated
transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee, the Securities Administrator and any agent of
the
Issuing Entity, the Securities Administrator or the Indenture Trustee may treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note, and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and none of the Issuing
Entity, the Securities Administrator, the Indenture Trustee nor any such agent
of the Issuing Entity, the Securities Administrator or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of each Class of Notes affected
thereby. The Indenture also contains provisions permitting the Holders of Notes
representing not less than a majority of the aggregate Note Principal Balance
of
the Notes, to waive any past Event of Default and its consequences except an
Event of Default (a) with respect to payment of principal of or interest on
any
of the Notes, or (b) in respect of a covenant or provision of the Indenture
which cannot be modified or amended without the consent of the Holder of each
Note. Any such waiver by the Holder, at the time of the giving thereof, of
this
Note (or any one or more predecessor Notes) shall bind the Holder of every
Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu
hereof, whether or not notation of such consent or waiver is made upon such
Note. The Indenture also permits the Issuing Entity, the Indenture Trustee
and
the Securities Administrator, following prior notice to the Rating Agencies,
to
amend or waive certain terms and conditions set forth in the Indenture without
the consent of the Holders of the Notes issued thereunder.
Initially,
the Notes will be registered in the name of Cede & Co. as nominee of DTC,
acting in its capacity as the Depository for the Notes. The Notes will be
delivered by the clearing agency in denominations as provided in the Indenture
and subject to certain limitations therein set forth. The Notes are exchangeable
for a like aggregate then outstanding Note Principal Balance of Notes of
different authorized denominations, as requested by the Holder surrendering
same.
Unless
the Certificate of Authentication hereon has been executed by the Securities
Administrator by manual signature, this Note shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any
purpose.
Anything
herein to the contrary notwithstanding, except as expressly provided in the
Basic Documents, neither the Owner Trustee in its individual capacity, nor
any
of its respective partners, beneficiaries, agents, officers, directors,
employees, or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest
on,
or performance of, or omission to perform, any of the covenants, obligations
or
indemnifications contained in this Note, it being expressly understood that
said
covenants, obligations and indemnifications have been made solely by the Trust
to the extent of the assets of the Trust. The holder of this Note by the
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, the Holder shall have no claim against any of the foregoing for
any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Trust Estate for any and all liabilities, obligations and
undertakings contained in this Note.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed.
Dated:
February 28, 2006
|
BEAR
XXXXXXX ARM TRUST 2006-1
|
|||||||||||||
|
BY:
|
WILMINGTON
TRUST COMPANY, not in its individual capacity but solely in its capacity
as Owner Trustee
|
||||||||||||
|
By:
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
SECURITIES
ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Class A-[1][2][3][4] Notes referred to in the within-mentioned
Indenture.
|
BY:
|
XXXXX
FARGO BANK, N.A., as Securities Administrator
|
||||||||||||
|
BY
|
|||||||||||||
|
Authorized
Signatory
|
|||||||||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
UNIF
GIFT MIN ACT
|
--
|
____________
Custodian
|
|
(Cust) (Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
||
|
(State)
|
Additional
abbreviations may also be used though not in the above list.
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 typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints ________________________ attorney to transfer said Note on the books
kept for registration thereof, with full power of substitution in the
premises.
Dated:
Signature
Guaranteed by __________________________________
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-2
FORM
OF
CLASS X NOTES
THIS
NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1, CLASS A-2, CLASS
A-3
AND CLASS A-4 NOTES AS DESCRIBED IN THE INDENTURE.
THIS
NOTE 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 THE INDENTURE.
NO
TRANSFER OF THIS NOTE SHALL BE MADE UNLESS THE TRANSFEREE IS NOT ACQUIRING
THE
NOTE WITH PLAN ASSETS OR UNLESS THE INDENTURE TRUSTEE AND THE NOTE REGISTRAR
ARE
PROVIDED WITH AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OF THE
NOTES
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 INDENTURE TRUSTEE, THE OWNER TRUSTEE, THE DEPOSITOR, THE SECURITIES
ADMINISTRATOR, THE MASTER SERVICER, ANY SERVICER OR THE NOTE REGISTRAR TO ANY
OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS OR LIABILITIES UNDER ERISA OR
SECTION 4975 OF THE CODE) IN ADDITION TO THOSE UNDERTAKEN IN THE INDENTURE,
WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE DEPOSITOR, THE OWNER
TRUSTEE, THE INDENTURE TRUSTEE, THE NOTE REGISTRAR OR THE SECURITIES
ADMINISTRATOR.
PRIOR
TO A REMIC CONVERSION, NO TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION OF THIS
NOTE OR INTEREST THEREIN SHALL BE MADE, AND THE NOTE REGISTRAR SHALL REFUSE
TO
REGISTER ANY SUCH TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION, UNLESS THE
PROPOSED TRANSFEREE SHALL HAVE DELIVERED TO THE OWNER TRUSTEE, THE NOTE
REGISTRAR, THE SECURITIES ADMINISTRATOR AND THE INDENTURE TRUSTEE A CERTIFICATE
CERTIFYING THAT, FOLLOWING THE TRANSFER, IT WILL BE A SINGLE OWNER. IN
CONNECTION WITH THE OCCURRENCE OF A REMIC CONVERSION, THIS NOTE SHALL BE
EXCHANGED FOR THE CORRESPONDING REMIC PRIVATELY OFFERED CERTIFICATES.
NOTWITHSTANDING THE FOREGOING, THIS NOTE MAY BE PLEDGED TO SECURED INDEBTEDNESS
AND MAY BE THE SUBJECT OF REPURCHASE AGREEMENTS TREATED BY THE SINGLE OWNER
AS
SECURED INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES, PROVIDED THAT, FOR THE
AVOIDANCE OF DOUBT, THIS NOTE MAY NOT BE TRANSFERRED BY THE RELATED LENDER
UNDER
ANY SUCH RELATED INDEBTEDNESS OR REPURCHASE AGREEMENT UPON A DEFAULT UNDER
ANY
SUCH INDEBTEDNESS OR AGREEMENT EXCEPT IN ACCORDANCE WITH THE
FOREGOING.
THIS
NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUING ENTITY, AND IS LIMITED IN
RIGHT
OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE
INDENTURE REFERRED TO BELOW. THE ISSUING ENTITY IS NOT OTHERWISE PERSONALLY
LIABLE FOR PAYMENTS ON THIS NOTE.
BY
ACCEPTANCE OF THIS NOTE, THE HOLDER HEREOF AGREES TO SURRENDER THIS NOTE TO
THE
SECURITIES ADMINISTRATOR PROMPTLY UPON RECEIPT OF THE CORRESPONDING CLASS OF
REMIC PRIVATELY OFFERED CERTIFICATES FOLLOWING THE OCCURRENCE OF THE REMIC
CONVERSION AS DESCRIBED IN THE INDENTURE.
BEAR
XXXXXXX ARM TRUST 2006-1
MORTGAGE-BACKED
NOTES, SERIES 2006-1
CLASS
X
|
AGGREGATE
NOTIONAL AMOUNT: :$[______]
|
NOTE
INTEREST
RATE:
Variable Rate
|
|
INITIAL
NOTIONAL AMOUNT OF THIS NOTE:
:
|
NOTE
NO. 1
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO: [______]
|
BEAR
XXXXXXX ARM TRUST 2006-1 (the “Issuing Entity”), a Delaware statutory trust, for
value received, hereby promises to pay to Bear, Xxxxxxx Securities Corp. or
registered assigns, interest hereon in monthly installments on the twenty-fifth
day of each month or, if such day is not a Business Day, the next succeeding
Business Day (each a “Payment Date”), commencing in March 2006 and ending on or
before the Payment Date occurring in February 2036 (the “Final Scheduled Payment
Date”) and to pay interest on the Notional Amount of this Note (this “Note”)
outstanding from time to time as provided below.
This
Note
is one of a duly authorized issue of the Issuing Entity's Mortgage-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture, dated as of February 28,
2006 (the “Indenture”), among the Issuing Entity, Xxxxx Fargo Bank, N.A. as
securities administrator and U.S. Bank National Association as indenture trustee
(the “Indenture Trustee”, which term includes any successor Indenture Trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights thereunder
of
the Issuing Entity, the Indenture Trustee and the Holders of the Notes and
the
terms upon which the Notes are to be authenticated and delivered. All terms
used
in this Note which are defined in the Indenture shall have the meanings assigned
to them in the Indenture.
Payments
of interest on this Note will be made on each Payment Date to the Noteholder
of
record as of the related Record Date. The “Notional Amount” of this Note as of
any date of determination shall be calculated as set forth under the
Indenture.
The
interest on this Note are due and payable as described in the Indenture, in
such
coin or currency of the United States of America as at the time of payment
is
legal tender for payment of public and private debts. All payments made by
the
Issuing Entity with respect to this Note shall be applied as provided in the
Indenture.
By
acceptance of this Note, the Holder hereof agrees to surrender this Note to
the
Securities Administrator promptly upon notice by the Securities Administrator
to
surrender this Note and in exchange for the corresponding Class of REMIC
Privately Offered Certificates, each in connection with the REMIC Conversion
as
described in the Indenture.
The
Mortgage Loans are subject to purchase in whole, but not in part, by the
Majority Certificateholder on any Payment Date on or after the Payment Date
on
which the aggregate Scheduled Principal Balance of the Mortgage Loans as of
the
end of the prior Due Period is 10% or less of the Cut-off Date Scheduled
Principal Balance of the Mortgage Loans.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class X Notes, and
each
Holder hereof, by its acceptance of this Note, agrees that (i) such Note will
be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuing Entity, the Owner Trustee, the Indenture Trustee, the Depositor, the
Seller, the Master Servicer, the Securities Administrator or any of their
respective affiliates, or to the assets of any of the foregoing entities, except
the assets of the Issuing Entity pledged to secure the Class X Notes pursuant
to
the Indenture and the rights conveyed to the Issuing Entity under the
Indenture.
Any
payment of interest payable on this Note which is punctually paid on the
applicable Payment Date shall be paid to the Person in whose name such Note
is
registered at the close of business on the Record Date for such Payment Date
by
check mailed to such person's address as it appears in the Note Register on
such
Record Date, except for the final installment of interest payable with respect
to such Note, which shall be payable as provided below. Notwithstanding the
foregoing, upon written request with appropriate instructions by the Holder
of
this Note delivered to the Securities Administrator at least five Business
Days
prior to the Record Date, any payment of interest, other than the final
installment of interest, shall be made by wire transfer to an account in the
United States designated by such Xxxxxx. All reductions in the principal amount
of a Note (excluding the Class X Notes) effected by payments of principal made
on any Payment Date shall be binding upon all Holders of this Note and of any
note issued upon the registration of transfer thereof or in exchange therefor
or
in lieu thereof, whether or not such payment is noted on such Note. The final
payment of this Note shall be payable upon presentation and surrender thereof
on
or after the Payment Date thereof at the Office designated by the Securities
Administrator or the office or agency of the Issuing Entity maintained by it
for
such purpose pursuant to the Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note,
shall carry the right to unpaid principal (excluding the Class X Notes) and
interest that were carried by such other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. The Indenture provides
that, notwithstanding the acceleration of the maturity of the Notes, under
certain circumstances specified therein, all amounts collected as proceeds
of
the Trust Estate securing the Notes or otherwise shall continue to be applied
to
payments of principal and interest on the Notes as if they had not been declared
due and payable.
The
failure to pay Accrued Note Interest on the Class X Notes, shall not constitute
an Event of Default under the Indenture.
No
transfer, sale, pledge or other disposition of this Note or interest herein
shall be made unless that transfer, sale, pledge or other disposition is exempt
from the registration and/or qualification requirements of the Securities Act
and any applicable state securities laws, or is otherwise made in accordance
with the Securities Act and such state securities laws. If a transfer of this
Note is to be made without registration under the Securities Act (other than
in
connection with the initial issuance thereof or a transfer thereof by the
Depositor or one of its Affiliates), then the Note Registrar shall refuse to
register such transfer unless (i) it receives (and upon receipt, may
conclusively rely upon) a certificate substantially in the form attached as
Exhibit C to the Indenture or (ii) it receives a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Note Registrar
and
the Indenture Trustee and the transferee executes a representation letter
substantially in the form of Exhibit D attached to the Indenture, and transferor
executes a representation letter substantially in the form of Exhibit E attached
to the Indenture, each acceptable to and in form and substance satisfactory
to
the Note Registrar and the Indenture Trustee. None of the Issuing Entity, the
Depositor, the Indenture Trustee or the Note Registrar is obligated to register
or qualify any Notes under the Securities Act or any other securities law or
to
take any action not otherwise required under the Indenture to permit the
transfer of this Note or interest herein without registration or qualification.
Any Noteholder desiring to effect a transfer of this Note or interest herein
shall, and does hereby agree to, indemnify the Issuing Entity, the Depositor,
the Owner Trustee, the Indenture Trustee and the Note Registrar against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No
transfer (other than in connection with the initial issuance thereof or a
transfer thereof by the Depositor or one of its Affiliates) of this Class X
Note
or any interest therein shall be made to any Person unless the Indenture Trustee
and the Note Registrar are provided with an Opinion of Counsel which establishes
to the satisfaction of the Indenture Trustee and the Note Registrar that the
purchase of a Class X Note 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 Depositor, the Owner Trustee, the Indenture
Trustee, the Securities Administrator, the Master Servicer, any Servicer or
the
Note Registrar, to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Indenture, which Opinion of Counsel shall not be an expense
of
the Depositor, the Owner Trustee, the Indenture Trustee, the Securities
Administrator, the Master Servicer, any Servicer and the Note Registrar. In
lieu
of such Opinion of Counsel, a Person acquiring a Class X Note may provide a
certification in the form attached to the Indenture, which the Indenture
Trustee, Depositor, the Owner Trustee, the Master Servicer and the Note
Registrar may rely upon without further inquiry or investigation.
Prior
to
a REMIC Conversion, no transfer, sale, pledge or other disposition of this
Class
X Note or interest therein shall be made, and the Note Registrar shall refuse
to
register any such transfer, sale, pledge or other disposition, unless the
proposed transferee shall have delivered to the Owner Trustee, the Note
Registrar, the Securities Administrator and the Indenture Trustee a certificate
certifying that, following such transfer, it will be a Single Owner. In
connection with the occurrence of a REMIC Conversion, this Class X Note shall
be
exchanged for the corresponding REMIC Privately Offered Certificates.
Notwithstanding the foregoing, this Class X Note may be pledged to secure
indebtedness and may be the subject of repurchase agreements treated by the
Single Owner as secured indebtedness for federal income tax purposes, provided
that, for the avoidance of doubt, this Class X Note may not be transferred
by
the related lender under any such indebtedness or repurchase agreement upon
a
default under such indebtedness or agreement except in accordance with the
foregoing.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Securities Administrator,
one or more new Notes of any authorized denominations and of a like aggregate
then outstanding Note Principal Balance, will be issued to the designated
transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee, the Securities Administrator and any agent of
the
Issuing Entity, the Securities Administrator or the Indenture Trustee may treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note, and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and none of the Issuing
Entity, the Securities Administrator, the Indenture Trustee nor any such agent
of the Issuing Entity, the Securities Administrator or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of each Class of Notes affected
thereby. The Indenture also contains provisions permitting the Holders of Notes
representing not less than a majority of the aggregate Note Principal Balance
of
the Notes, to waive any past Event of Default and its consequences except an
Event of Default (a) with respect to payment of principal of or interest on
any
of the Notes, or (b) in respect of a covenant or provision of the Indenture
which cannot be modified or amended without the consent of the Holder of each
Note. Any such waiver by the Holder, at the time of the giving thereof, of
this
Note (or any one or more predecessor Notes) shall bind the Holder of every
Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu
hereof, whether or not notation of such consent or waiver is made upon such
Note. The Indenture also permits the Issuing Entity, the Indenture Trustee
and
the Securities Administrator, following prior notice to the Rating Agencies,
to
amend or waive certain terms and conditions set forth in the Indenture without
the consent of the Holders of the Notes issued thereunder.
The
Notes
are exchangeable for a like aggregate then outstanding Note Principal Balance
or
Notional Amount, as applicable, of the Notes of different authorized
denominations, as requested by the Holder surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Securities
Administrator by manual signature, this Note shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any
purpose.
Anything
herein to the contrary notwithstanding, except as expressly provided in the
Basic Documents, neither the Owner Trustee in its individual capacity, nor
any
of its respective partners, beneficiaries, agents, officers, directors,
employees, or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest
on,
or performance of, or omission to perform, any of the covenants, obligations
or
indemnifications contained in this Note, it being expressly understood that
said
covenants, obligations and indemnifications have been made solely by the Trust
to the extent of the assets of the Trust. The holder of this Note by the
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, the Holder shall have no claim against any of the foregoing for
any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Trust Estate for any and all liabilities, obligations and
undertakings contained in this Note.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed.
Dated:
February 28, 2006
|
BEAR
XXXXXXX ARM TRUST 2006-1
|
||||||||||||
|
By:
|
WILMINGTON
TRUST COMPANY, not in its individual capacity but solely in its capacity
as Owner Trustee
|
|||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
SECURITIES
ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Class X Notes referred to in the within-mentioned
Indenture.
|
BEAR
XXXXXXX ARM TRUST 2006-1
|
||||||||||||
|
XXXXX
FARGO BANK, N.A.,
as
Securities Administrator
|
||||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
UNIF
GIFT MIN ACT
|
--
|
____________
Custodian
|
|
(Cust) (Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
||
|
(State)
|
Additional
abbreviations may also be used though not in the above list.
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 typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints ________________________ attorney to transfer said Note on the books
kept for registration thereof, with full power of substitution in the
premises.
|
Dated:
|
||||
|
Signature
Guaranteed by
|
||||
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
A-3
THIS
NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1, Class A-2, CLASS
A-3,
CLASS A-4, CLASS X [CLASS B-1][CLASS B-2][CLASS B-3][CLASS B-4] AND [CLASS
B-5]
NOTES AS DESCRIBED IN THE INDENTURE.
THIS
NOTE 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 THE INDENTURE.
NO
TRANSFER OF THIS NOTE SHALL BE MADE UNLESS THE TRANSFEREE IS NOT ACQUIRING
THE
NOTE WITH PLAN ASSETS OR UNLESS THE INDENTURE TRUSTEE AND THE NOTE REGISTRAR
ARE
PROVIDED WITH AN OPINION OF COUNSEL TO THE EFFECT THAT THE PURCHASE OF THE
NOTES
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 INDENTURE TRUSTEE, THE OWNER TRUSTEE, THE DEPOSITOR, THE ISSUING
ENTITY, THE SELLER, THE SECURITIES ADMINISTRATOR, THE MASTER SERVICER, ANY
SERVICER OR THE NOTE REGISTRAR TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE INDENTURE, WHICH OPINION OF COUNSEL SHALL NOT BE
AN
EXPENSE OF THE DEPOSITOR, THE OWNER TRUSTEE, THE INDENTURE TRUSTEE, THE NOTE
REGISTRAR OR THE SECURITIES ADMINISTRATOR.
PRIOR
TO A REMIC CONVERSION, NO TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION OF THIS
NOTE OR INTEREST THEREIN SHALL BE MADE, AND THE NOTE REGISTRAR SHALL REFUSE
TO
REGISTER ANY SUCH TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION, UNLESS THE
PROPOSED TRANSFEREE SHALL HAVE DELIVERED TO THE OWNER TRUSTEE, THE NOTE
REGISTRAR, THE SECURITIES ADMINISTRATOR AND THE INDENTURE TRUSTEE A CERTIFICATE
CERTIFYING THAT, FOLLOWING THE TRANSFER, IT WILL BE A SINGLE OWNER. IN
CONNECTION WITH THE OCCURRENCE OF A REMIC CONVERSION, THIS NOTE SHALL BE
EXCHANGED FOR THE CORRESPONDING REMIC PRIVATELY OFFERED CERTIFICATES.
NOTWITHSTANDING THE FOREGOING, THIS NOTE MAY BE PLEDGED TO SECURED INDEBTEDNESS
AND MAY BE THE SUBJECT OF REPURCHASE AGREEMENTS TREATED BY THE SINGLE OWNER
AS
SECURED INDEBTEDNESS FOR FEDERAL INCOME TAX PURPOSES, PROVIDED THAT, FOR THE
AVOIDANCE OF DOUBT, THIS NOTE MAY NOT BE TRANSFERRED BY THE RELATED LENDER
UNDER
ANY SUCH RELATED INDEBTEDNESS OR REPURCHASE AGREEMENT UPON A DEFAULT UNDER
ANY
SUCH INDEBTEDNESS OR AGREEMENT EXCEPT IN ACCORDANCE WITH THE
FOREGOING.
THIS
NOTE IS A NON-RECOURSE OBLIGATION OF THE ISSUING ENTITY, AND IS LIMITED IN
RIGHT
OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE
INDENTURE REFERRED TO BELOW. THE ISSUING ENTITY IS NOT OTHERWISE PERSONALLY
LIABLE FOR PAYMENTS ON THIS NOTE.
PRINCIPAL
OF THIS NOTE IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN
ON THE FACE HEREOF.
BY
ACCEPTANCE OF THIS NOTE, THE HOLDER HEREOF AGREES TO SURRENDER THIS NOTE TO
THE
SECURITIES ADMINISTRATOR PROMPTLY UPON RECEIPT OF THE CORRESPONDING CLASS OF
REMIC PRIVATELY OFFERED CERTIFICATES FOLLOWING THE OCCURRENCE OF THE REMIC
CONVERSION AS DESCRIBED IN THE INDENTURE.
BEAR
XXXXXXX ARM TRUST 2006-1
MORTGAGE-BACKED
NOTES, SERIES 2006-1
CLASS
B-[1][2][3][4][5][6]
|
AGGREGATE
NOTE PRINCIPAL
|
NOTE
INTEREST
|
|
BALANCE:
$[_______]
|
RATE:
Variable Rate
|
|
INITIAL
NOTE PRINCIPAL
|
NOTE
NO. 1
|
|
BALANCE
OF THIS NOTE: $[_______]
|
|
|
PERCENTAGE
INTEREST: 100%
|
CUSIP
NO: [_______]
|
BEAR
XXXXXXX ARM TRUST 2006-1 (the “Issuing Entity”), a Delaware statutory trust, for
value received, hereby promises to pay to Bear, Xxxxxxx Securities Corp. or
registered assigns, the principal sum of $[______] in monthly installments
on
the twenty-fifth day of each month or, if such day is not a Business Day, the
next succeeding Business Day (each a “Payment Date”), commencing in March 2006
and ending on or before the Payment Date occurring in February 2036 (the “Final
Scheduled Payment Date”) and to pay interest on the Note Principal Balance of
this Note (this “Note”) outstanding from time to time as provided
below.
This
Note
is one of a duly authorized issue of the Issuing Entity's Mortgage-Backed Notes,
Series 2006-1 (the “Notes”), issued under an Indenture, dated as of February 28,
2006 (the “Indenture”), among the Issuing Entity, Xxxxx Fargo Bank, N.A. as
securities administrator and U.S. Bank National Association as indenture trustee
(the “Indenture Trustee”, which term includes any successor Indenture Trustee),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a statement of the respective rights thereunder of the Issuing Entity,
the Indenture Trustee and the Holders of the Notes and the terms upon which
the
Notes are to be authenticated and delivered. All terms used in this Note which
are defined in the Indenture shall have the meanings assigned to them in the
Indenture.
Payments
of principal and interest on this Note will be made on each Payment Date to
the
Noteholder of record as of the related Record Date. The “Note Principal Balance”
of a Note as of any date of determination is equal to the initial Note Principal
Balance thereof, minus (i) all amounts distributed in respect of principal
with
respect to such Class of Notes, (ii) the aggregate amount of any reductions
in
the Note Principal Balance thereof deemed to have occurred in connection with
allocations of Realized Losses on all prior Payment Dates in accordance with
the
Indenture, taking account of its applicable Loss Allocation Limitation, and
(iii) such Class's pro rata share, if any, of the applicable Subordinate
Writedown Amount for previous Payment Dates, plus (iv) any Subsequent Recoveries
allocated thereto.
The
principal of, and interest on, this Note are due and payable as described in
the
Indenture, in such coin or currency of the United States of America as at the
time of payment is legal tender for payment of public and private debts. All
payments made by the Issuing Entity with respect to this Note shall be equal
to
this Note's pro rata share of the aggregate payments on all Class
B-[1][2][3][4][5][6] Notes as described above, and shall be applied as between
interest and principal as provided in the Indenture.
All
principal and interest accrued on the Notes, if not previously paid, will become
finally due and payable at the Final Scheduled Payment Date.
By
acceptance of this Note, the Holder hereof agrees to surrender this Note to
the
Securities Administrator promptly upon receipt of the corresponding Class of
REMIC Privately Offered Certificates in connection with the REMIC Conversion
as
described in the Indenture.
The
Mortgage Loans are subject to purchase in whole, but not in part, by the
Majority Certificateholder on any Payment Date on or after the Payment Date
on
which the aggregate Scheduled Principal Balance of the Mortgage Loans as of
the
end of the prior Due Period is 10% or less than the Cut-off Date Scheduled
Principal Balance of the Mortgage Loans.
The
Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the
Trust Estate will be the sole source of payments on the Class
B-[1][2][3][4][5][6] Notes, and each Holder hereof, by its acceptance of this
Note, agrees that (i) such Note will be limited in right of payment to amounts
available from the Trust Estate as provided in the Indenture and (ii) such
Holder shall have no recourse to the Issuing Entity, the Owner Trustee, the
Indenture Trustee, the Depositor, the Seller, the Master Servicer, the
Securities Administrator or any of their respective affiliates, or to the assets
of any of the foregoing entities, except the assets of the Issuing Entity
pledged to secure the Class B-[1][2][3][4][5][6] Notes pursuant to the Indenture
and the rights conveyed to the Issuing Entity under the Indenture.
Any
payment of principal or interest payable on this Note which is punctually paid
on the applicable Payment Date shall be paid to the Person in whose name such
Note is registered at the close of business on the Record Date for such Payment
Date by check mailed to such person's address as it appears in the Note Register
on such Record Date, except for the final installment of principal and interest
payable with respect to such Note, which shall be payable as provided below.
Notwithstanding the foregoing, upon written request with appropriate
instructions by the Holder of this Note delivered to the Securities
Administrator at least five Business Days prior to the Record Date, any payment
of principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Note
effected by payments of principal made on any Payment Date shall be binding
upon
all Holders of this Note and of any note issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof, whether or not
such
payment is noted on such Note. The final payment of this Note shall be payable
upon presentation and surrender thereof on or after the Payment Date thereof
at
the Office designated by the Securities Administrator or the office or agency
of
the Issuing Entity maintained by it for such purpose pursuant to the
Indenture.
Subject
to the foregoing provisions, each Note delivered under the Indenture, upon
registration of transfer of or in exchange for or in lieu of any other Note,
shall carry the right to unpaid principal and interest that were carried by
such
other Note.
If
an
Event of Default as defined in the Indenture shall occur and be continuing
with
respect to the Notes, the Notes may become or be declared due and payable in
the
manner and with the effect provided in the Indenture. If any such acceleration
of maturity occurs prior to the payment of the entire unpaid Note Principal
Balance of the Notes, the amount payable to the Holder of this Note will be
equal to the sum of the unpaid Note Principal Balance of this Note, together
with accrued and unpaid interest thereon as described in the Indenture. The
Indenture provides that, notwithstanding the acceleration of the maturity of
the
Notes, under certain circumstances specified therein, all amounts collected
as
proceeds of the Trust Estate securing the Notes or otherwise shall continue
to
be applied to payments of principal of and interest on the Notes as if they
had
not been declared due and payable.
The
failure to pay any Net Interest Shortfall at any time when funds are not
available to make such payment as provided in the Indenture shall not constitute
an Event of Default under the Indenture.
No
transfer, sale, pledge or other disposition of this Note or interest herein
shall be made unless that transfer, sale, pledge or other disposition is exempt
from the registration and/or qualification requirements of the Securities Act
and any applicable state securities laws, or is otherwise made in accordance
with the Securities Act and such state securities laws. If a transfer of this
Note is to be made without registration under the Securities Act (other than
in
connection with the initial issuance thereof or a transfer thereof by the
Depositor or one of its Affiliates), then the Note Registrar shall refuse to
register such transfer unless (i) it receives (and upon receipt, may
conclusively rely upon) a certificate substantially in the form attached as
Exhibit C to the Indenture or (ii) it receives a written Opinion of Counsel
acceptable to and in form and substance satisfactory to the Note Registrar
and
the Indenture Trustee and the transferee executes a representation letter
substantially in the form of Exhibit D attached to the Indenture, and transferor
executes a representation letter substantially in the form of Exhibit E attached
to the Indenture, each acceptable to and in form and substance satisfactory
to
the Note Registrar and the Indenture Trustee. None of the Issuing Entity, the
Depositor, the Indenture Trustee or the Note Registrar is obligated to register
or qualify any Notes under the Securities Act or any other securities law or
to
take any action not otherwise required under the Indenture to permit the
transfer of this Note or interest herein without registration or qualification.
Any Noteholder desiring to effect a transfer of this Note or interest herein
shall, and does hereby agree to, indemnify the Issuing Entity, the Depositor,
the Owner Trustee, the Indenture Trustee and the Note Registrar against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such federal and state laws.
No
transfer (other than in connection with the initial issuance thereof or a
transfer thereof by the Depositor or one of its Affiliates) of this Class
B-[1][2][3][4][5][6] Note or any interest therein shall be made to any Person
unless the Indenture Trustee and the Note Registrar are provided with an Opinion
of Counsel which establishes to the satisfaction of the Indenture Trustee and
the Note Registrar that the purchase of a Class B-[1][2][3][4][5][6] Note 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 Depositor, the Owner Trustee, the Indenture Trustee, the Master
Servicer, any Servicer or the Note Registrar to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Indenture, which Opinion of Counsel
shall
not be an expense of the Depositor, the Owner Trustee, the Indenture Trustee,
the Securities Administrator, the Master Servicer, any Servicer and the Note
Registrar. In lieu of such Opinion of Counsel, a Person acquiring a Class B-1
Note may provide a certification in the form attached to the Indenture, which
the Depositor, the Owner Trustee, the Indenture Trustee, the Note Registrar
and
the Master Servicer may rely upon without further inquiry or
investigation.
Prior
to
a REMIC Conversion, no transfer, sale, pledge or other disposition of this
Class
B-[1][2][3][4][5][6] Note or interest therein shall be made, and the Note
Registrar shall refuse to register any such transfer, sale, pledge or other
disposition, unless the proposed transferee shall have delivered to the Owner
Trustee, the Note Registrar, the Securities Administrator and the Indenture
Trustee a certificate certifying that, following such transfer, it will be
a
Single Owner. In connection with the occurrence of a REMIC Conversion, this
Class B-[1][2][3][4][5][6] Note shall be exchanged for the corresponding REMIC
Privately Offered Certificates. Notwithstanding the foregoing, this Class
B-[1][2][3][4][5][6] Note may be pledged to secure indebtedness and may be
the
subject of repurchase agreements treated by the Single Owner as secured
indebtedness for federal income tax purposes, provided that, for the avoidance
of doubt, this Class B-[1][2][3][4][5][6] Note may not be transferred by the
related lender under any such indebtedness or repurchase agreement upon a
default under such indebtedness or agreement except in accordance with the
foregoing.
As
provided in the Indenture and subject to certain limitations therein set forth,
the transfer of this Note may be registered on the Note Register of the Issuing
Entity. Upon surrender for registration of transfer of, or presentation of
a
written instrument of transfer for, this Note at the office or agency designated
by the Issuing Entity pursuant to the Indenture, accompanied by proper
instruments of assignment in form satisfactory to the Securities Administrator,
one or more new Notes of any authorized denominations and of a like aggregate
then outstanding Note Principal Balance, will be issued to the designated
transferee or transferees.
Prior
to
the due presentment for registration of transfer of this Note, the Issuing
Entity, the Indenture Trustee, the Securities Administrator and any agent of
the
Issuing Entity, the Securities Administrator or the Indenture Trustee may treat
the Person in whose name this Note is registered as the owner of such Note
(i)
on the applicable Record Date for the purpose of making payments and interest
of
such Note, and (ii) on any other date for all other purposes whatsoever, as
the
owner hereof, whether or not this Note be overdue, and none of the Issuing
Entity, the Securities Administrator, the Indenture Trustee nor any such agent
of the Issuing Entity, the Securities Administrator or the Indenture Trustee
shall be affected by notice to the contrary.
The
Indenture permits, with certain exceptions as therein provided, the amendment
thereof and the modification of the rights and obligations of the Issuing Entity
and the rights of the Holders of the Notes under the Indenture at any time
by
the Issuing Entity and the Holders of a majority of each Class of Notes affected
thereby. The Indenture also contains provisions permitting the Holders of Notes
representing not less than a majority of the aggregate Note Principal Balance
of
the Notes, to waive any past Event of Default and its consequences except an
Event of Default (a) with respect to payment of principal of or interest on
any
of the Notes, or (b) in respect of a covenant or provision of the Indenture
which cannot be modified or amended without the consent of the Holder of each
Note. Any such waiver by the Holder, at the time of the giving thereof, of
this
Note (or any one or more predecessor Notes) shall bind the Holder of every
Note
issued upon the registration of transfer hereof or in exchange hereof or in
lieu
hereof, whether or not notation of such consent or waiver is made upon such
Note. The Indenture also permits the Issuing Entity, the Indenture Trustee
and
the Securities Administrator, following prior notice to the Rating Agencies,
to
amend or waive certain terms and conditions set forth in the Indenture without
the consent of the Holders of the Notes issued thereunder.
The
Notes
are exchangeable for a like aggregate then outstanding Note Principal Balance
of
Notes of different authorized denominations, as requested by the Holder
surrendering same.
Unless
the Certificate of Authentication hereon has been executed by the Securities
Administrator by manual signature, this Note shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any
purpose.
Anything
herein to the contrary notwithstanding, except as expressly provided in the
Basic Documents, neither the Owner Trustee in its individual capacity, nor
any
of its respective partners, beneficiaries, agents, officers, directors,
employees, or successors or assigns, shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal of or interest
on,
or performance of, or omission to perform, any of the covenants, obligations
or
indemnifications contained in this Note, it being expressly understood that
said
covenants, obligations and indemnifications have been made solely by the Trust
to the extent of the assets of the Trust. The holder of this Note by the
acceptance hereof agrees that, except as expressly provided in the Basic
Documents, the Holder shall have no claim against any of the foregoing for
any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Trust Estate for any and all liabilities, obligations and
undertakings contained in this Note.
AS
PROVIDED IN THE INDENTURE, THIS NOTE AND THE INDENTURE CREATING THIS NOTE SHALL
BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE STATE OF
NEW
YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.
IN
WITNESS WHEREOF, the Issuing Entity has caused this instrument to be duly
executed.
Dated:
February 28, 2006
|
BEAR
XXXXXXX ARM TRUST 2006-1
|
||||||||||||
|
By:
|
WILMINGTON
TRUST COMPANY, not in its individual capacity but solely in its capacity
as Owner Trustee
|
|||||||||||
|
By:
|
||||||||||||
|
Authorized
Signatory
|
||||||||||||
SECURITIES
ADMINISTRATOR’S CERTIFICATE OF AUTHENTICATION
This
is
one of the Class B-[1][2][3][4][5][6] Notes referred to in the within-mentioned
Indenture.
|
By:
|
XXXXX
FARGO BANK, N.A.,
as
Securities Administrator
|
||||||
|
By:
|
|||||||
|
Authorized
Signatory
|
|||||||
ABBREVIATIONS
The
following abbreviations, when used in the inscription on the face of the Note,
shall be construed as though they were written out in full according to
applicable laws or regulations:
|
TEN
COM
|
--
|
as
tenants in common
|
|
TEN
ENT
|
--
|
as
tenants by the entireties
|
|
JT
TEN
|
--
|
as
joint tenants with right of survivorship and not as tenants in
common
|
|
UNIF
GIFT MIN ACT
|
--
|
____________
Custodian
|
|
(Cust) (Minor)
|
||
|
under
Uniform Gifts to Minor Act
|
||
|
(State)
|
Additional
abbreviations may also be used though not in the above list.
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 typewrite name and address, including zip code, of
assignee)
the
within Note and all rights thereunder, and hereby irrevocably constitutes and
appoints ________________________ attorney to transfer said Note on the books
kept for registration thereof, with full power of substitution in the
premises.
|
Dated:
|
||||
|
Signature
Guaranteed by
|
||||
NOTICE:
The signature(s) to this assignment must correspond with the name as it appears
upon the face of the within Note in every particular, without alteration or
enlargement or any change whatsoever. Signature(s) must be guaranteed by a
commercial bank or by a member firm of the New York Stock Exchange or another
national securities exchange. Notarized or witnessed signatures are not
acceptable.
EXHIBIT
B
MORTGAGE
LOAN SCHEDULE
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 1933 Act.
2.
The
Buyer
warrants and represents to, and covenants with, the Indenture Trustee pursuant
to Section 4.02 of the Indenture (the “Indenture”), dated as of February 28,
2006, among Bear Xxxxxxx ARM Trust 2006-1, as Issuing Entity, and Xxxxx Fargo
Bank, N.A., as Securities Administrator and U.S. Bank National Association,
as
Indenture Trustee, as follows:
a.
The
Buyer
understands that the Rule 144A Securities have not been registered under the
1933 Act or the securities laws of any state.
b.
The
Buyer
considers itself a substantial, sophisticated institutional investor having
such
knowledge and experience in financial and business matters that it is capable
of
evaluating the merits and risks of investment in the Rule 144A
Securities.
c.
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, the Certificate Registrar, Master Servicer and the
Depositor that either (1) the Buyer is (A) not an employee benefit plan (within
the meaning of Section 3(3) of the Employee Retirement Income Security Act
of
1974, as amended (“ERISA”)), or a plan (within the meaning of Section 4975(e)(1)
of the Internal Revenue Code of 1986 (“Code”)), which (in either case) is
subject to ERISA or Section 4975 of the Code (both a “Plan”), and (B) is not
directly or indirectly purchasing the Rule 144A Securities on behalf of, as
investment manager of, as named fiduciary of, as trustee of, or with “plan
assets” of a Plan, or (2) the Buyer understands that registration of transfer of
any Rule 144A Securities to any Plan, or to any Person acting on behalf of
any
Plan, will not be made unless such Plan delivers an opinion of its counsel,
addressed and satisfactory to the Certificate Registrar, the Owner Trustee,
the
Indenture Trustee, the Master Servicer and the Depositor, to the effect that
the
purchase and holding of the Rule 144A Securities by, on behalf of or with “plan
assets” of any Plan is permissible under applicable law, would not constitute or
result in a prohibited transaction under ERISA or Section 4975 of the Code,
and
would not subject the Depositor, the Owner Trustee, the Indenture Trustee,
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 Agreement, which Opinion of Counsel shall not be an
expense of the Depositor, the Owner Trustee, the Indenture Trustee, the
Certificate Registrar or the Master Servicer.
4.
This
document may be executed in one or more counterparts and by the different
parties hereto on separate counterparts, each of which, when so executed, shall
be deemed to be an original; such counterparts, together, shall constitute
one
and the same document.
IN
WITNESS WHEREOF, each of the parties has executed this document as of the date
set forth below.
|
Print
Name of Seller
|
Print
Name of Buyer
|
||
|
By:
|
By:
|
||
|
Name:
|
Name:
|
||
|
Title:
|
Title:
|
||
|
Taxpayer
Identification:
|
Taxpayer
Identification:
|
||
|
No:
|
No:
|
||
|
Date:
|
Date:
|
||
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
|
|
|
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 Issuing Entitys
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 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 Securities only for the Buyer’s own
account?
|
|||
|
Yes
|
No
|
||
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:
|
|
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.
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 Xxxxx, 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 Issuing Entitys 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.
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:
|
|||||||||||||
EXHIBIT
D
FORM
OF
INVESTMENT LETTER [NON-RULE 144A]
[DATE]
Wilmington
Trust Company
Xxxxxx
Square North
0000
Xxxxx Xxxxxx Xxxxxx
Wilmington,
Delaware 19890-0001
Xxxxx
Fargo Bank, N.A.
Sixth
Street and Marquette Avenue
Minneapolis,
Minnesota 55479
|
Re:
|
Bear
Xxxxxxx ARM Trust, Mortgage-Backed Notes, Series 2006-1, [Class A]
[Class
X] [Class B] (the “Notes”)
|
Ladies
and Gentlemen:
In
connection with our acquisition of the above-captioned Notes, we certify that
(a) we understand that the Notes are not being registered under the Securities
Act of 1933, as amended (the “Act”), or any state securities laws and are being
transferred to us in a transaction that is exempt from the registration
requirements of the Act and any such laws, (b) we are an “accredited investor,”
as defined in Regulation D under the Act, and have such knowledge and experience
in financial and business matters that we are capable of evaluating the merits
and risks of investments in the Notes, (c) we have had the opportunity to ask
questions of and receive answers from the Depositor concerning the purchase
of
the Notes and all matters relating thereto or any additional information deemed
necessary to our decision to purchase the Notes, (d) we are not an employee
benefit plan that is subject to the Employee Retirement Income Security Act
of
1974, as amended, or a plan that is subject to Section 4975 of the Internal
Revenue Code of 1986, as amended, nor are we acting on behalf of any such plan
or we have delivered an opinion of counsel as required by the Indenture, (e)
we
are acquiring the Notes for investment for our own account and not with a view
to any distribution of such Notes (but without prejudice to our right at all
times to sell or otherwise dispose of the Notes in accordance with clause (g)
below), (f) we have not offered or sold any Notes to, or solicited offers to
buy
any Notes from, any person, or otherwise approached or negotiated with any
person with respect thereto, or taken any other action which would result in
a
violation of Section 5 of the Act, and (h) we will not sell, transfer or
otherwise dispose of any Notes unless (1) such sale, transfer or other
disposition is made pursuant to an effective registration statement under the
Act or is exempt from such registration requirements, and if requested, we
will
at our expense provide an Opinion of Counsel satisfactory to the addressees
of
this certificate that such sale, transfer or other disposition may be made
pursuant to an exemption from the Act, (2) the purchaser or transferee of such
Note has executed and delivered to you a certificate to substantially the same
effect as this certificate, and (3) the purchaser or transferee has otherwise
complied with any conditions for transfer set forth in the
Indenture.
|
Very
truly yours,
|
|||||||
|
[TRANSFEREE]
|
|||||||
|
By:
|
|||||||
|
Authorized
Officer
|
|||||||
EXHIBIT
E
TRANSFEROR
CERTIFICATE
Wilmington
Trust Company
Xxxxxx
Square North
0000
Xxxxx Xxxxxx Xxxxxx
Wilmington,
Delaware 19890-0001
Xxxxx
Fargo Bank, N.A.
Sixth
Street and Marquette Avenue
Minneapolis,
Minnesota 55479
|
Re:
|
Proposed
Transfer of [Class A] [Class X] [Class B] Bear Xxxxxxx ARM Trust
2006-1
|
Gentlemen:
This
certification is being made by ____________________ (the “Transferor”) in
connection with the proposed Transfer to _____________________ (the
“Transferee”) of the [Class A Notes][Class X Notes] [Class B Notes] (the
“Notes”) issued pursuant to the Indenture, dated February 28, 2006, being
referred to herein as the “Indenture”) among Bear Xxxxxxx ARM Trust 2006-1, as
Issuing Entity, Xxxxx Fargo Bank, N.A., as securities administrator and U.S.
Bank National Association as indenture trustee (the “Indenture”). Initially
capitalized terms used but not defined herein have the meanings assigned to
them
in the Indenture. The Transferor hereby certifies, represents and warrants
to,
and covenants with, the Owner Trustee and the Indenture Trustee
that:
Neither
the Transferor nor anyone acting on its behalf has (a) offered, pledged, sold,
disposed of or otherwise transferred any Note, any interest in any Note 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 Note, any
interest in any Note or any other similar security from any person in any
manner, (c) has otherwise approached or negotiated with respect to any Note,
any
interest in any Note 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 Notes under the
Securities Act of 1933 (the “Act”), that would render the disposition of any
Note a violation of Section 5 of the Act or any state securities law, or that
would require registration or qualification pursuant thereto. The Transferor
will not act in any manner set forth in the foregoing sentence with respect
to
any Note. The Transferor has not and will not sell or otherwise transfer any
of
the Notes, except in compliance with the provisions of the
Indenture.
|
Date:
|
||||||
|
Authorized
Officer
|
||||||
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Signature
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EXHIBIT
F
FORM
OF TRANSFEREE CERTIFICATE
Wilmington
Trust Company
Xxxxxx
Square North
0000
Xxxxx Xxxxxx Xxxxxx
Wilmington,
Delaware 19890-0001
U.S.
Bank
National Association
Xxx
Xxxxxxx Xxxxxx, 3rd Floor
Boston,
MA 02110
Xxxxx
Fargo Bank, N.A.
Sixth
Street and Marquette Avenue
Minneapolis,
Minnesota 55479
Re:
Proposed
Transfer of [Class X] [Class B] Notes, Bear Xxxxxxx ARM Trust
2006-1
Gentlemen:
This
certification is being made by _________ (the “Transferee”) in connection with
the proposed transfer (the “Transfer”) by _________ of a [Class X] [Class B]
Note issued pursuant to the Indenture, dated as of February 28, 2006 (the
“Indenture”), among Bear Xxxxxxx ARM Trust 2006-1, as Issuing Entity, Xxxxx
Fargo Bank, N.A., as securities administrator (the “Securities Administrator”),
and U.S. Bank National Association, as indenture trustee (the “Indenture
Trustee”). Initially capitalized terms used but not defined herein have the
meanings assigned to them in the Indenture. The Transferee hereby certifies,
represents and warrants to, and covenants with, the Owner Trustee, the Note
Registrar, the Securities Administrator and the Indenture Trustee that following
the Transfer, 100% of the Certificates and Class X Notes and Class B Notes
will
be owned by the Transferee, directly or indirectly through one or more entities
disregarded as entities separate from the Transferee.
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APPENDIX
A
DEFINITIONS
Accepted
Master Servicing Practices:
With
respect to any Mortgage Loan, those customary mortgage servicing practices
of
prudent mortgage servicing institutions that master service Mortgage Loans
of
the same type and quality as such Mortgage Loan in the jurisdiction where the
related Mortgaged Property is located, to the extent applicable to the Master
Servicer (except in its capacity as successor to the Servicer).
Account:
The
Master Servicer Collection Account, the Payment Account and the Protected
Account, as the context may require.
Accrued
Note Interest:
With
respect to any Class of Senior Notes and any Payment Date, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Note Interest Rate on the Note Principal Balance or Notional Amount of such
Note
immediately prior to such Payment Date, less in the case of a Subordinate Note
or Class X Note, such Class’s share of (a) Prepayment Interest Shortfalls on the
Mortgage Loans, to the extent not covered by Compensating Interest paid by
the
Servicer or the Master Servicer, (b) interest shortfalls on the Mortgage Loans
resulting from the application of the Relief Act or similar state law and (c)
the interest portion of any Realized Losses on the Mortgage Loans. Prepayment
Interest Shortfalls and interest shortfalls resulting from the application
of
the Relief Act will be allocated among the Class X Notes and the Subordinate
Notes in proportion to the amount of Accrued Note Interest that would have
been
allocated thereto in the absence of such shortfalls. Accrued Note Interest
on
the Notes will be calculated on the basis of a 360-day year consisting of 30-day
months.
Additional
Disclosure:
The
meaning specified in Section 3.17 of the Sale and Servicing Agreement.
Additional
Form 10-D Disclosure:
The
meaning specified in Section 3.17 of the Sale and Servicing Agreement.
Additional
Form 10-K Disclosure:
The
meaning specified in Section 3.17 of the Sale and Servicing
Agreement.
Administration
Agreement:
The
Administration Agreement, dated as of February 28, 2006, among the Issuing
Entity, the Depositor, the Owner Trustee and the Securities
Administrator.
Adjustment
Date:
As to
each Mortgage Loan, each date set forth in the related Mortgage Note on which
an
adjustment to the interest rate on such Mortgage Loan becomes
effective.
Affiliate:
With
respect to any Person, any other Person controlling, controlled by or under
common control with such Person. For purposes of this definition, “control”
means the power to direct the management and policies of a Person, directly
or
indirectly, whether through ownership of voting securities, by contract or
otherwise and “controlling” and “controlled” shall have meanings correlative to
the foregoing.
Allocable
Share:
With
respect to each Class of Class B Notes:
(a)
as to
any Payment Date and amounts distributable pursuant to clauses (i) and (iv)
of
the definition of Subordinate Optimal Principal Amount, the fraction, expressed
as a percentage, the numerator of which is the Note Principal Balance of such
Class and the denominator of which is the aggregate Note Principal Balance
of
all Classes of Class B Notes; and
(b)
as to
any Payment Date and amounts distributable pursuant to clauses (ii), (iii)
and
(v) of the definition of Subordinate Optimal Principal Amount and as to each
Class of Class B Notes (other than the Class of Class B Notes having the lowest
numerical designation as to which the Class Prepayment Distribution Trigger
shall not be applicable) for which (x) the related Class Prepayment Distribution
Trigger has been satisfied on such Payment Date, the fraction, expressed as
a
percentage, the numerator of which is the Note Principal Balance of such Class
and the denominator of which is the aggregate of the Note Principal Balances
of
all such Classes of Subordinate Notes and (y) the related Class Prepayment
Distribution Trigger has not been satisfied on such Payment Date, 0%; provided
that if on a Payment Date, the Note Principal Balance of any Class of Class
B
Notes for which the related Class Prepayment Distribution Trigger was satisfied
on such Payment Date is reduced to zero, any amounts distributed pursuant to
this clause (b), to the extent of such Class’s remaining Allocable Share, shall
be distributed to the remaining Class or Classes of Subordinate Securities
which
satisfy the related Class Prepayment Distribution Trigger and to the Class
B-6,
Class B-5, Class B-4, Class B-3, Class B-2 and Class B-1 Notes, in that order,
in reduction of their respective Note Principal Balances.
Applicable
Credit Rating:
For any
long-term deposit or security, a credit rating of AAA from S&P. For any
short-term deposit or security, a rating of A-l+ from S&P.
Appraised
Value:
For any
Mortgaged Property related to a Mortgage Loan, the amount set forth as the
appraised value of such Mortgaged Property in an appraisal made for the mortgage
originator in connection with its origination of the related Mortgage
Loan.
Assessment
of Compliance:
The
meaning specified in Section 3.16 of the Sale and Servicing
Agreement
Assigned
Contracts:
Any
pledged asset loan agreement governing the pledge of the Pledged
Assets.
Assignment
Agreement:
The
agreement attached as a Exhibit D to the Sale and Servicing Agreement, whereby
the Xxxxx Fargo Servicing Agreement was assigned to the Indenture Trustee for
the benefit of the Noteholders.
Assignment
of Mortgage:
An
assignment of Mortgage, notice of transfer or equivalent instrument, in
recordable form, which is sufficient under the laws of the jurisdiction wherein
the related Mortgaged Property is located to reflect of record the sale of
the
Mortgage, which assignment, notice of transfer or equivalent instrument may
be
in the form of one or more blanket assignments covering Mortgages secured by
Mortgaged Properties located in the same county, if permitted by
law.
Attesting
Party:
The
meaning specified in Section 3.16 of the Sale and Servicing
Agreement.
Attestation
Report:
The
meaning specified in Section 3.16 of the Sale and Servicing
Agreement.
Authorized
Newspaper:
A
newspaper of general circulation in the Borough of Manhattan, The City of New
York, printed in the English language and customarily published on each Business
Day, whether or not published on Saturdays, Sundays or holidays.
Authorized
Officer:
With
respect to the Issuing Entity, any officer of the Owner Trustee who is
authorized to act for the Owner Trustee in matters relating to the Issuing
Entity and who is identified on the list of Authorized Officers delivered by
the
Owner Trustee to the Indenture Trustee and Securities Administrator on the
Closing Date (as such list may be modified or supplemented from time to time
thereafter).
Available
Funds:
With
respect to any Payment Date, the Interest Funds and the Principal
Funds.
Available
Funds Rate:
With
respect to any Payment Date and the Senior Notes, a per annum rate, expressed
as
a percentage, equal to a fraction, the numerator of which is the Interest Funds
for such Payment Date, multiplied by 12, and the denominator of which is the
aggregate Note Principal Balance of the Senior Notes immediately prior to such
Payment Date.
Average
Loss Severity Percentage:
With
respect to any Payment Date, the percentage equivalent of a fraction, the
numerator of which is the sum of the Loss Severity Percentages for each Mortgage
Loan which had a Realized Loss and the denominator of which is the number of
Mortgage Loans which had Realized Losses.
Bankruptcy
Code:
The
United States Bankruptcy Code, as amended as codified in 11 U.S.C. §§
101-1330.
Bankruptcy
Loss:
With
respect to any Mortgage Loan, any Deficient Valuation or Debt Service Reduction
related to such Mortgage Loan as reported by the Servicer to the Master
Servicer.
Basic
Documents:
The
Sale and Servicing Agreement, the Xxxxx Fargo Servicing Agreement, the
Indenture, the Trust Agreement, the Mortgage Loan Purchase Agreement, the
Custodial Agreement and the Administration Agreement and the other documents
and
certificates delivered in connection with any of the above.
Beneficial
Owner:
With
respect to any Note, the Person who is the beneficial owner of such Note as
reflected on the books of the Depository or on the books of a Person maintaining
an account with such Depository (directly as a Depository Participant or
indirectly through a Depository Participant, in accordance with the rules of
such Depository).
Book-Entry
Notes:
Beneficial interests in the Class A-1, Class A-2, Class A-3 and Class A-4 Notes,
ownership and transfers of which shall be made through book entries by the
Depository as described in the Indenture.
Business
Day:
Any day
other than (i) a Saturday or a Sunday, or (ii) a day on which the New York
Stock
Exchange or Federal Reserve is closed or on which banking institutions in any
jurisdiction in which the Indenture Trustee, the Master Servicer, the Servicer
or the Securities Administrator is located are authorized or obligated by law
or
executive order to be closed.
Calendar
Quarter:
A
calendar quarter shall consist of one of the following time periods in any
given
year: January 1 through March 31, April 1 through June 30, July 1 through
September 30, and October 1 through December 31.
Carryover
Shortfall Amount:
With
respect to the Class A Notes and any Payment Date, the excess, if any, of the
(i) interest accrued at their respective Note Interest Rate (without giving
effect to the Available Funds Rate) over (ii) the amount of interest received
on
such Notes if the Note Interest Rate is based on the Available Funds Rate,
together with the unpaid portion of any excess from previous Payment Dates
(and
any interest thereon at the then applicable Note Interest Rate without giving
effect to the Available Funds Rate).
Certificate
Notional Amount:
The
amount specified on the face of Trust Certificate.
Certificate
Paying Agent:
Initially, the Securities Administrator, in its capacity as Certificate Paying
Agent, or any successor to Securities Administrator in such
capacity.
Certificate
Distribution Account<