EXHIBIT 99.1
EXECUTION
SEQUOIA MORTGAGE TRUST 6
Issuer
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
INDENTURE
Dated as of April 1, 2002
Relating to
SEQUOIA MORTGAGE TRUST 6
COLLATERALIZED MORTGAGE BONDS
TABLE OF CONTENTS
PAGE
PAGE.........................................................................................I
PARTIES......................................................................................2
PRELIMINARY STATEMENT........................................................................2
GRANTING CLAUSE..............................................................................2
ARTICLE I DEFINITIONS........................................................................3
Section 1.01. General Definitions.....................................................3
ARTICLE II THE BONDS........................................................................31
Section 2.01. FORMS GENERALLY........................................................31
Section 2.02. FORMS OF BONDS AND CERTIFICATE OF AUTHENTICATION.......................32
Section 2.03. BONDS ISSUABLE IN CLASSES; PROVISIONS WITH RESPECT
TO PRINCIPAL AND INTEREST PAYMENTS.....................................33
Section 2.04. DENOMINATIONS..........................................................35
Section 2.05. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.........................35
Section 2.06. TEMPORARY BONDS........................................................36
Section 2.07. REGISTRATION, REGISTRATION OF TRANSFER AND
EXCHANGE...............................................................36
Section 2.08. MUTILATED, DESTROYED, LOST OR STOLEN BONDS.............................39
Section 2.09. PAYMENTS OF PRINCIPAL AND INTEREST.....................................40
Section 2.10. PERSONS DEEMED OWNERS..................................................41
Section 2.11. CANCELLATION...........................................................41
Section 2.12. AUTHENTICATION AND DELIVERY OF BONDS...................................41
Section 2.13. MATTERS RELATING TO BOOK ENTRY BONDS...................................43
Section 2.14. TERMINATION OF BOOK ENTRY SYSTEM.......................................44
Section 2.15. ALLOCATION OF REALIZED LOSSES..........................................44
Section 2.16. REPORTS TO BONDHOLDERS.................................................45
Section 2.17. [RESERVED].............................................................47
Section 2.18. BASIS RISK RESERVE FUND................................................47
Section 2.19. [RESERVED].............................................................47
Section 2.20. DETERMINATION OF LIBOR.................................................47
ARTICLE III COVENANTS.......................................................................48
Section 3.01. PAYMENT OF BONDS.......................................................48
Section 3.02. MAINTENANCE OF OFFICE OR AGENCY........................................48
Section 3.03. MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST............................49
Section 3.04. EXISTENCE OF ISSUER....................................................50
Section 3.05. PROTECTION OF TRUST ESTATE.............................................51
Section 3.06. OPINIONS AS TO TRUST ESTATE............................................52
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Section 3.07. PERFORMANCE OF OBLIGATIONS.............................................52
Section 3.08. INVESTMENT COMPANY ACT.................................................53
Section 3.09. NEGATIVE COVENANTS.....................................................53
Section 3.10. ANNUAL STATEMENT AS TO COMPLIANCE......................................54
Section 3.11. RECORDING OF ASSIGNMENTS...............................................54
Section 3.12. LIMITATION OF LIABILITY OF WILMINGTON
TRUST COMPANY..........................................................54
Section 3.13. REPRESENTATIONS AND WARRANTIES OF THE ISSUER REGARDING THE LIEN OF
BONDHOLDERS............................................................55
ARTICLE IV SATISFACTION AND DISCHARGE.......................................................56
Section 4.01. SATISFACTION AND DISCHARGE OF INDENTURE................................56
Section 4.02. APPLICATION OF TRUST MONEY.............................................57
ARTICLE V DEFAULTS AND REMEDIES.............................................................57
Section 5.01. EVENT OF DEFAULT.......................................................57
Section 5.02. ACCELERATION OF MATURITY; RESCISSION AND
ANNULMENT..............................................................59
Section 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE........59
Section 5.04. REMEDIES...............................................................60
Section 5.05. [RESERVED].............................................................61
Section 5.06. TRUSTEE MAY FILE PROOFS OF CLAIM.......................................61
Section 5.07. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF BONDS.................62
Section 5.08. APPLICATION OF MONEY COLLECTED.........................................62
Section 5.09. LIMITATION ON SUITS....................................................62
Section 5.10. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND INTEREST..63
Section 5.11. RESTORATION OF RIGHTS AND REMEDIES.....................................63
Section 5.12. RIGHTS AND REMEDIES CUMULATIVE.........................................63
Section 5.13. DELAY OR OMISSION NOT WAIVER...........................................64
Section 5.14. CONTROL BY BONDHOLDERS.................................................64
Section 5.15. WAIVER OF PAST DEFAULTS................................................64
Section 5.16. UNDERTAKING FOR COSTS..................................................65
Section 5.17. WAIVER OF STAY OR EXTENSION LAWS.......................................65
Section 5.18. SALE OF TRUST ESTATE...................................................65
Section 5.19. ACTION ON BONDS........................................................67
Section 5.20. VOTING RIGHTS..........................................................67
ARTICLE VI THE TRUSTEE......................................................................67
Section 6.01. DUTIES OF TRUSTEE......................................................67
Section 6.02. NOTICE OF DEFAULT......................................................69
Section 6.03. RIGHTS OF TRUSTEE......................................................69
Section 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS......................70
Section 6.05. MAY HOLD BONDS.........................................................71
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Section 6.06. MONEY HELD IN TRUST....................................................71
Section 6.07. COMPENSATION AND REIMBURSEMENT.........................................71
Section 6.08. ELIGIBILITY; DISQUALIFICATION..........................................72
Section 6.09. TRUSTEE'S CAPITAL AND SURPLUS..........................................72
Section 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF
SUCCESSOR..............................................................73
Section 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.................................74
Section 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION
TO BUSINESS OF TRUSTEE.................................................74
Section 6.13. PREFERENTIAL COLLECTION OF CLAIM AGAINST ISSUER........................74
Section 6.14. CO-TRUSTEES AND SEPARATE TRUSTEES......................................75
Section 6.15. AUTHENTICATING AGENTS..................................................76
ARTICLE VII BONDHOLDERS' LISTS AND REPORTS..................................................77
Section 7.01. ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF BONDHOLDERS...........77
Section 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS.............77
Section 7.03. REPORTS BY TRUSTEE.....................................................78
Section 7.04. REPORTS BY ISSUER......................................................78
Section 7.05. NOTICE TO THE RATING AGENCIES..........................................78
ARTICLE VIII ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES.....................79
Section 8.01. COLLECTION OF MONEYS...................................................79
Section 8.02. DISTRIBUTION ACCOUNT...................................................79
Section 8.03. GENERAL PROVISIONS REGARDING PLEDGED ACCOUNTS..........................80
Section 8.04. PURCHASES OF DEFECTIVE MORTGAGE LOANS..................................81
Section 8.05. PURCHASES OF CONVERTED MORTGAGE LOANS..................................83
Section 8.06. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO
THE MORTGAGE LOANS.....................................................84
Section 8.07. RESERVED...............................................................84
Section 8.08. REPORTS BY TRUSTEE.....................................................84
Section 8.09. TRUST ESTATE; RELEASE AND DELIVERY OF MORTGAGE DOCUMENTS...............84
Section 8.10. SERVICERS AS AGENTS AND BAILEES OF TRUSTEE.............................85
ARTICLE IX SUPPLEMENTAL INDENTURES..........................................................85
Section 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.................85
Section 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS....................86
Section 9.03. EXECUTION OF SUPPLEMENTAL INDENTURES...................................88
Section 9.04. EFFECT OF SUPPLEMENTAL INDENTURES......................................88
Section 9.05. CONFORMITY WITH TRUST INDENTURE ACT....................................88
Section 9.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES..........................88
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PAGE
Section 9.07. AMENDMENTS TO DEPOSIT TRUST AGREEMENT OR
SERVICING AGREEMENTS...................................................88
ARTICLE X REDEMPTION OF BONDS...............................................................89
Section 10.01. REDEMPTION.............................................................89
Section 10.02. FORM OF REDEMPTION NOTICE..............................................90
Section 10.03. BONDS PAYABLE ON REDEMPTION DATE.......................................90
Section 10.04. RETENTION OF BONDS BY ISSUER...........................................91
ARTICLE XI REMIC PROVISIONS.................................................................91
Section 11.01. TIERED REMIC STRUCTURE.................................................91
Section 11.02. REMIC ADMINISTRATION...................................................93
Section 11.03. PROHIBITED TRANSACTIONS AND ACTIVITIES.................................95
Section 11.04. INDEMNIFICATION WITH RESPECT TO PROHIBITED TRANSACTIONS OR LOSS OF REMIC
STATUS.................................................................95
Section 11.05. REO PROPERTY...........................................................95
Section 11.06. TAX CLASSIFICATION OF THE BASIS RISK RESERVE FUND......................96
Section 11.07. REMIC LIQUIDATION......................................................96
ARTICLE XII MISCELLANEOUS...................................................................97
Section 12.01. COMPLIANCE CERTIFICATES AND OPINIONS...................................97
Section 12.02. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.................................97
Section 12.03. ACTS OF BONDHOLDERS....................................................98
Section 12.04. NOTICES, ETC. TO TRUSTEE AND ISSUER....................................99
Section 12.05. NOTICES AND REPORTS TO BONDHOLDERS; WAIVER OF NOTICES.................100
Section 12.06. RULES BY TRUSTEE AND AGENTS...........................................100
Section 12.07. CONFLICT WITH TRUST INDENTURE ACT.....................................100
Section 12.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS..............................100
Section 12.09. SUCCESSORS AND ASSIGNS................................................101
Section 12.10. SEPARABILITY..........................................................101
Section 12.11. BENEFITS OF INDENTURE.................................................101
Section 12.12. LEGAL HOLIDAYS........................................................101
Section 12.13. GOVERNING LAW.........................................................101
Section 12.14. COUNTERPARTS..........................................................101
Section 12.15. RECORDING OF INDENTURE................................................101
Section 12.16. ISSUER OBLIGATION.....................................................102
Section 12.17. INSPECTION............................................................102
Section 12.18. USURY.................................................................102
Section 12.19. NO PETITION...........................................................102
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SCHEDULE A -- Schedule of Mortgage Loans...................................................A-1
EXHIBIT I -- Letter Agreement with the Depository
EXHIBIT II -- Form of Face of Class A Bond
EXHIBIT III -- Form of Face of Class X Bond
EXHIBIT IV -- Form of Face of Subordinate Bonds
EXHIBIT V -- Form of Face of Class A-R Bond
EXHIBIT VI -- Form of Reverse of Bonds
EXHIBIT VII -- Form of Investment Letter for Holders of the Private Bonds
EXHIBIT VIII -- Form of Transfer Affidavit for Class A-R Bond
EXHIBIT IX -- ERISA Representation Letter
EXHIBIT X -- Mortgage Loan Representations and Warranties
EXHIBIT XI -- List of Servicing Agreements
EXHIBIT XII -- List of Purchase Agreements
EXHIBIT XIII -- List of Limited Purpose Surety Bonds
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PARTIES
INDENTURE, dated as of April 1, 2002 (as amended or supplemented from
time to time as permitted hereby, the "Indenture"), between Sequoia Mortgage
Trust 6 (herein, together with its permitted successors and assigns, called the
"Issuer"), a statutory business trust created under the Deposit Trust Agreement
(as defined herein), and Deutsche Bank National Trust Company, a national
banking association, as trustee (together with its permitted successors in the
trusts hereunder, the "Trustee").
PRELIMINARY STATEMENT
The Issuer has duly authorized the execution and delivery of this
Indenture to provide for its Collateralized Mortgage Bonds, (the "Bonds"),
issuable as provided in this Indenture. All covenants and agreements made by the
Issuer herein are for the benefit and security of the Holders of the Bonds. The
Issuer is entering into this Indenture, and the Trustee is accepting the trusts
created hereby, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged.
All things necessary to make this Indenture a valid agreement of the
Issuer in accordance with its terms have been done.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee, for the exclusive benefit of
the Holders of the Bonds, all of the Issuer's right, title and interest in and
to (a) the Mortgage Loans identified in Schedule A to this Indenture, including
the related Mortgage Documents, which the Issuer has caused to be delivered to
the Trustee herewith, and all interest and principal received or receivable by
the Issuer on or with respect to the such Mortgage Loans after the Cut-Off Date
and all interest and principal payments on the such Mortgage Loans received
prior to the Cut-off Date in respect of installments of interest and principal
due thereafter, but not including payments of interest and principal due and
payable on such Mortgage Loans on or before the Cut-off Date, and all other
proceeds received in respect of such Mortgage Loans, (b) the Issuer's rights
under the Purchase Agreements and the Servicing Agreements, as modified by the
Acknowledgements, and the Mortgage Loan Purchase and Sale Agreement, (c) the
Insurance Policies, (d) all cash, instruments or other property held or required
to be deposited in the Custodial Accounts and the Pledged Accounts (exclusive of
any earnings on investments made with funds deposited in the Distribution
Account), (e) property that secured a Mortgage Loan that has become an REO
Property, (f) the pledge, control and guaranty agreements and the Limited
Purpose Surety Bonds relating to the Additional Collateral Mortgage Loans, and
(g) all proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid assets, including, without limitation, all
Insurance Proceeds, Liquidation Proceeds and condemnation awards. In addition,
the Holder of the Class X Bonds hereby Grants to the Trustee, for the exclusive
benefit of the Holders of the LIBOR Bonds, all of such Holder's right, title and
interest in and to the Basis Risk Reserve Fund to the extent provided herein.
Such Grants are made, however, in trust, to secure the (i) the payment of all
sums payable under this Indenture with respect to the Bonds, and (ii) compliance
with the provisions of this Indenture, all
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as provided in this Indenture. All terms used in the foregoing granting clauses
that are defined in Section 1.01 are used with the meanings given in said
Section.
The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions of this Indenture and agrees to perform the
duties herein required to the best of its ability to the end that the interests
of the Holders of the Bonds may be adequately and effectively protected.
ARTICLE I
DEFINITIONS
Section 1.01. General Definitions.
Except as otherwise specified or as the context may otherwise require,
the following terms have the respective meanings set forth below for all
purposes of this Indenture, and the definitions of such terms are applicable to
the singular as well as to the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms. Whenever reference
is made herein to an Event of Default or a Default known to the Trustee or of
which the Trustee has notice or knowledge, such reference shall be construed to
refer only to an Event of Default or Default of which the Trustee is deemed to
have notice or knowledge. All other terms used herein which are defined in the
Trust Indenture Act (as hereinafter defined), either directly or by reference
therein, have the meanings assigned to them therein.
"ACCOUNTANT": A Person engaged in the practice of accounting who (except
when this Indenture provides that an Accountant must be Independent) may be
employed by or affiliated with the Issuer or an Affiliate of the Issuer.
"ACCRUAL PERIOD": As to each Class of LIBOR Bonds and any Payment Date,
the period commencing on the 19th day of the month immediately preceding the
month in which such Payment Date occurs (or in the case of the first Payment
Date, beginning on the Closing Date) and ending on the 18th day of the month in
which such Payment Date occurs. The "Accrual Period" applicable to the Class
B-4, Class B-5, Class B-6, Class A-R and Class X Bonds shall be the calendar
month immediately preceding the month in which the related Payment Date occurs.
Interest shall accrue on all Classes of Bonds, on the basis of a 360-day year
consisting of twelve 30-day months; provided, however, that in the case of the
LIBOR Bonds and the first Accrual Period only, interest shall accrue on the
basis of a 360-day year and the actual number of days elapsed in such Accrual
Period.
"ACKNOWLEDGEMENTS": The Assignment, Assumption and Recognition
Agreements, dated April 26, 2002, assigning rights under the Purchase Agreements
and the Servicing Agreements from the Seller to the Depositor, from the
Depositor to the Issuer and from the Issuer to the Trustee.
"ACT": With respect to any Bondholder, as defined in Section 12.03.
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"ADDITIONAL COLLATERAL": With respect to any Additional Collateral
Mortgage Loan, the marketable securities and other acceptable collateral pledged
as collateral pursuant to the related pledge agreement.
"ADDITIONAL COLLATERAL MORTGAGE LOAN": Each Mortgage Loan identified as
such in the Mortgage Loan Schedule.
"ADJUSTMENT DATE": As to any Mortgage Loan, the date on which the
related Mortgage Rate adjusts, in accordance with the terms of the related
Mortgage Note.
"ADVANCE": The payments required to be made by the Servicers with
respect to any Payment Date pursuant to the Servicing Agreements, the amount of
any such payment being equal to the aggregate of the payments of principal and
interest (net of the applicable Servicing Fee and net of any net income in the
case of any REO Property) on the Mortgage Loans that were due on the related Due
Date and not received as of the close of business on the related Determination
Date, less the aggregate amount of any such delinquent payments that the
Servicers have determined would constitute Nonrecoverable Advances if advanced.
"AFFILIATE": With respect to any Person, any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control" when used with respect to any specified
Person means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AGENT": Any Bond Registrar, Paying Agent or Authenticating Agent.
"AGGREGATE SENIOR PERCENTAGE": As to any Payment Date, the percentage
equivalent of a fraction the numerator of which is the aggregate of the Class
Principal Amount of the Class A, Class A-R and Class X Bonds and the denominator
of which is the Pool Stated Principal Balance for such Payment Date, but in no
event greater than 100%.
"AGGREGATE SUBORDINATE PERCENTAGE": As to any Payment Date, the
difference between 100% and the Aggregate Senior Percentage for such Payment
Date, but in no event less than zero.
"ALLOCABLE SHARE": With respect to each Class of Subordinate Bonds and
any Payment Date, the percentage equivalent of a fraction, the numerator of
which is the Class Principal Amount of such Class, and the denominator of which
is the aggregate of the Class Principal Amounts of each Class of Subordinate
Bonds.
"APPLICABLE STATE AND/OR LOCAL TAX LAW": For purposes hereof, the
Applicable State and/or Local Tax Law shall be (a) the tax laws of the State of
New York; and (b) such other state or local tax laws whose applicability shall
have been brought to the attention of the Trustee by either (i) an opinion of
counsel delivered to it, or (ii) written notice from the appropriate taxing
authority as to the applicability of such state or local tax laws.
4
"APPRAISED VALUE": With respect to any Mortgage Loan, the Appraised
Value of the related Mortgaged Property shall be: (i) with respect to a Mortgage
Loan other than a Refinancing Mortgage Loan, the lesser of (a) the value of the
Mortgaged Property based upon the appraisal made at the time of the origination
of such Mortgage Loan and (b) the sales price of the Mortgaged Property at the
time of the origination of such Mortgage Loan; (ii) with respect to a
Refinancing Mortgage Loan, the value of the Mortgaged Property based upon the
appraisal made at the time of the origination of such Refinancing Mortgage Loan.
"ASSIGNMENTS": Collectively (i) the original instrument of assignment of
a Mortgage, including any interim assignments, from the originator or any other
holder of any Mortgage Loan, and (ii) the original instrument of assignment of
such Mortgage, made to the Issuer in blank (which in either case may, to the
extent permitted by the laws of the state in which the related Mortgaged
Property is located, be a blanket instrument of assignment covering other
Mortgages as well and which may also, to the extent permitted by the laws of the
state in which the related Mortgaged Property is located, be an instrument of
assignment running directly from the mortgagee of record under the related
Mortgage to the Trustee).
"ASSUMED PRINCIPAL BALANCE" The same meaning as Pool Stated Principal
Balance.
"AUTHENTICATING AGENT": The Person, if any, appointed as Authenticating
Agent by the Trustee at the request of the Issuer pursuant to Section 6.15,
until any successor Authenticating Agent for the Bonds is named, and thereafter
"Authenticating Agent" shall mean such successor.
"AUTHORIZED OFFICER": Any officer of the Owner Trustee who is authorized
to act for the Owner Trustee in respect of the Issuer and whose name appears on
a list of such authorized officers furnished by the Owner Trustee to the
Trustee, as such list may be amended or supplemented from time to time, and any
officer of the Issuer who is authorized to act pursuant to the Deposit Trust
Agreement and whose name appears on a list furnished by the Depositor to the
Owner Trustee and the Trustee, as such list may be amended or supplemented from
time to time.
"AVAILABLE PAYMENT AMOUNT": With respect to any Payment Date, the total
amount of all cash received by the Trustee on the Mortgage Loans from each
Servicer during the related Due Period, including (1) all scheduled installments
of interest (net of the related Servicing Fees and other reimbursable expenses)
and principal collected on the Mortgage Loans and due during the Due Period
related to such Payment Date, together with any Advances in respect thereof, (2)
all Insurance Proceeds, Liquidation Proceeds and the proceeds of any Additional
Collateral, in each case for such Payment Date, (3) all partial or full
Principal Prepayments, together with any accrued interest thereon, identified as
having been received during the related Prepayment Period, (4) any amounts
received from the Servicers in respect of Prepayment Interest Shortfalls, and
(5) the aggregate Purchase Price of all Defective Mortgage Loans and Converted
Mortgage Loans purchased from the Trust Estate during the related Prepayment
Period, minus:
(A) in the case of (1) above, all fees, charges and other
penalty amounts payable
5
to the Servicers under the Servicing Agreements;
(B) in the case of (2) and (3) above, any unreimbursed expenses
incurred by the Servicers in connection with a liquidation or
foreclosure and any unreimbursed Advances or servicing advances due to
the Servicers;
(C) in the case of (2) and (4) above, any unreimbursed Advances
or servicing advances due to the Servicers;
(D) in the case of (1) through (4) above, any amounts collected
which are determined to be attributable to a subsequent Due Period or
Prepayment Period; and
(E) fees payable to the Trustee pursuant to Section 6.07.
"BANKRUPTCY CODE": The United States Bankruptcy Reform Act of 1978, as
amended.
"BANKRUPTCY LOSS": With respect to any Mortgage Loan, a Deficient
Valuation or Debt Service Reduction.
"BANKRUPTCY LOSS COVERAGE AMOUNT": As of any Payment Date, the Initial
Bankruptcy Loss Coverage Amount as reduced by the aggregate amount of Bankruptcy
Losses allocated to the Bonds since the Cut-Off Date; provided, however, that
the Bankruptcy Loss Coverage Amount may also be reduced pursuant to a letter
from each Rating Agency to the Trustee to the effect that any such reduction
shall not result in a downgrading of the then current ratings assigned by such
Rating Agency to the Senior Bonds.
"BANKRUPTCY LOSS COVERAGE TERMINATION DATE": The date on which the
Bankruptcy Loss Coverage Amount is reduced to zero.
"BASIS RISK DEPOSIT": For any Payment Date, an amount to be deposited
into the Basis Risk Reserve Fund pursuant to section 2.03(b)(1) equal to the
greater of (i) the sum of (a) any Basis Risk Shortfalls for such Payment Date
and (b) any Unpaid Basis Risk Shortfalls as of such Payment Date, and (ii) the
amount, if any, required to cause the balance in the Basis Risk Reserve Fund to
equal $10,000 (taking into account amounts already on deposit therein), provided
however, that the Basis Risk Deposit for any Payment Date shall not exceed the
Interest Payment Amount for the Class X Bonds for such Payment Date.
"BASIS RISK RESERVE FUND": The Eligible Account established pursuant to
Section 2.18.
"BASIS RISK SHORTFALL": With respect to any Payment Date and any Class
of LIBOR Bonds, the excess of (i) the amount of Current Interest that would have
been payable on such Class for such Payment Date if the Bond Interest Rate for
such Class were determined without regard to clause (ii) in the definition
thereof, over (ii) the Interest Payment Amount actually payable on such Class on
such Payment Date.
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"BBA": The British Banker's Association.
"BENEFICIAL OWNER": With respect to a Book Entry Bond, the Person who is
the beneficial owner of such Book Entry Bond.
"BOND INTEREST RATES": For each Accrual Period and each Class of Bonds,
the following per annum rates:
- Class A Bonds: the least of (i) LIBOR plus 0.32% (the "A
Margin"), (ii) the Net WAC and (iii) 11.00%;
- Class B-1 Bonds: the least of (i) LIBOR plus 0.70% (the "B-1
Margin"), (ii) the Net WAC and (iii) 11.00%;
- Class B-2 Bonds: the least of (i) LIBOR plus 0.70% (the "B-2
Margin"), (ii) the Net WAC and (iii) 11.00%;
- Class B-3 Bonds: the least of (i) LIBOR plus 0.70% (the "B-3
Margin"), (ii) the Net WAC and (iii) 11.00%;
- Class B-4 Bonds: the Net WAC for such Accrual Period.
- Class B-5 Bonds: the Net WAC for such Accrual Period
- Class B-6 Bonds: the Net WAC for such Accrual Period
- Class A-R Bonds: the Net WAC for such Accrual Period
- Class X Bonds: the excess of (i) the Net WAC on the Mortgage
Loans for such Accrual Period over (ii) the weighted average of
the Bond Interest Rates for the LIBOR Bonds (weighted on the
basis of their outstanding Class Principal Amounts).
The foregoing notwithstanding, if the option to sell the Mortgage Loans and
redeem the Bonds pursuant to Article X is not exercised by the Issuer on the
Clean-up Call Date, then on such Payment Date, and all succeeding Payment Dates,
the A Margin shall be increased to 0.64%; the B-1 Margin shall be increased to
1.05%; the B-2 Margin shall be increased to 1.05%; and the B-3 Margin shall be
increased to 1.05%.
"BOND PAYMENT AMOUNT": As to any Payment Date, an amount equal to the
sum of (i) the Interest Payment Amount for each Class of Bonds; and, (ii) the
Principal Payment Amount for such Payment Date.
"BOND PRINCIPAL AMOUNT": As to any Bond or Payment Date, the Bond
Principal Amount for such Bond as of the Closing Date as reduced by all amounts
previously distributed on that Bond in respect of principal and the principal
portion of any Realized Losses previously allocated to that Bond. The Bond
Principal Amount of a Class of Subordinate Bonds shall be additionally reduced
by allocation of any Subordinate Bond Writedown Amount.
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"BOND REGISTER" AND "BOND REGISTRAR": As defined in Section 2.07.
"BONDHOLDER" OR "HOLDER": The Person in whose name a Bond is registered
in the Bond Register.
"BONDS": Any bonds authorized by, and authenticated and delivered under,
this Indenture.
"BOOK ENTRY BONDS": Each Class of Bonds other than the Class A-R Bonds
and the Private Bonds.
"BOOK ENTRY TERMINATION": The occurrence of any of the following events:
(i) the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Book Entry Bonds, and the Issuer is unable
to locate a qualified successor or (ii) the Issuer at its option advises the
Indenture Trustee in writing that it elects to terminate the book-entry system
through the Depository.
"BUSINESS DAY": Any day other than (i) a Saturday or a Sunday, or (ii) a
day on which banking institutions in the City of New York, New York or the State
of California or the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law or executive order to be closed.
"CAPITALIZED INTEREST ACCOUNT": Not applicable.
"CAPITALIZED INTEREST REQUIREMENT": Not applicable.
"CLASS": Collectively, all of the Bonds bearing the same class
designation. The Bonds are divided into Classes as provided in Section 2.03.
"CLASS NOTIONAL AMOUNT": As of any Payment Date, with respect to the
Class X Bonds, an amount equal to the aggregate Class Principal Amount of the
LIBOR Bonds.
"CLASS PRINCIPAL AMOUNT": As to each Class of Bonds, the sum of Bond
Principal Amounts of the Bonds of such Class.
"CLASS SUBORDINATION PERCENTAGE": With respect to each Class of
Subordinate Bonds and any Payment Date, the percentage equivalent of a fraction
the numerator of which is the Class Principal Amount of such Class immediately
before such Payment Date and the denominator of which is the aggregate of the
Class Principal Amounts of all Classes of Bonds immediately before such Payment
Date.
"CLEAN-UP CALL DATE": The first Payment Date on which the Pool Stated
Principal Balance is equal to or less than 10% of the Assumed Principal Balance
on the Closing Date.
"CLOSING DATE": April 26, 2002.
"CODE": The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
8
"COMMISSION": Securities and Exchange Commission, as from time to time
constituted, created under the Securities Exchange Act of 1934, or if at any
time such Commission is not existing and performing the duties now assigned to
it under the Trust Indenture Act, then the body performing such duties at such
time under the Trust Indenture Act or similar legislation replacing the Trust
Indenture Act.
"CONTROLLING CLASS": As to any Payment Date, the Senior Bonds, until
such Bonds have been retired, and then the Outstanding Class of Subordinate
Bonds with the lowest numerical class designation.
"CONVERTED MORTGAGE LOAN": The meaning specified in Section 8.05.
"COOPERATIVE CORPORATION": The entity that holds title (fee or an
acceptable leasehold estate) to the real property and improvements constituting
the Cooperative Property and which governs the Cooperative Property, which
Cooperative Corporation must qualify as a Cooperative Housing Corporation under
Section 216 of the Code.
"COOPERATIVE LOAN": Any Mortgage Loan secured by Cooperative Shares and
a Proprietary Lease.
"COOPERATIVE PROPERTY": The real property and improvements owned by the
Cooperative Corporation, that includes the allocation of individual dwelling
units to the holders of the shares of the Cooperative Corporation.
"COOPERATIVE SHARES": Shares issued by a Cooperative Corporation.
"CORPORATE TRUST OFFICE": The principal corporate trust office of the
Trustee located at ▇▇▇▇ ▇▇▇▇ ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇, Attention:
Trustee Sequoia ▇ ▇▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ -- ▇▇▇▇▇▇, or at such other
address as the Trustee may designate from time to time by notice to the
Bondholders and the Issuer, or the principal corporate trust office of any
successor Trustee.
"CORRESPONDING CLASSES OF BONDS": With respect to each Lower-Tier
Regular Interest, the Class or Classes of Bonds appearing opposite such
Lower-Tier Regular Interest in Section 11.01.
"CURRENT INTEREST": For each Class of Bonds on any Payment Date the
amount of interest accrued during the related Accrual Period on the related
Class Principal Amount immediately prior to that Payment Date (or, in the case
of the Class X Bond, the Class Notional Amount thereof for that Payment Date) at
the applicable Bond Interest Rate. For purposes of the calculation of "Current
Interest" on the Class X Bond, the Class X Bond shall not accrue interest on its
Class Principal Amount, but rather on its Class Notional Amount.
"CUSTODIAL ACCOUNTS": The Custodial Account created under the ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Credit Corporation Master Servicing Agreement dated August
1, 2001.
9
"CUSTODIAN": A Person who is at any time appointed by the Trustee and
Issuer as a document custodian for the Mortgage Documents and Trustee Mortgage
Files.
"CUSTODY AGREEMENT": The Custody Agreement, dated as of April 1, 2002,
among the Seller, the Issuer and Deutsche Bank National Trust Company, as
Custodian and Trustee.
"CUT-OFF DATE": April 1, 2002.
"DEBT SERVICE REDUCTION": With respect to any Mortgage Loan, a reduction
by a court of competent jurisdiction in a proceeding under the Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan which became final and
non-appealable, except such a reduction resulting from a Deficient Valuation or
any reduction that results in a permanent forgiveness of principal.
"DEFAULT": Any occurrence which is, or with notice or the lapse of time
or both would become, an Event of Default.
"DEFECTIVE MORTGAGE LOAN": The meaning specified in Section 8.04.
"DEFICIENT VALUATION": With respect to any Mortgage Loan, a valuation by
a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under the Mortgage Loan, or any reduction
in the amount of principal to be paid in connection with any Scheduled Payment
that results in a permanent forgiveness of principal, which valuation or
reduction results from an order of such court which is final and non-appealable
in a proceeding under the Bankruptcy Code.
"DEFINITIVE BONDS": Bonds other than Book Entry Bonds.
"DELETED MORTGAGE LOAN": As defined in each Purchase Agreement.
"DELINQUENT": Any Mortgage Loan with respect to which the Scheduled
Payment due on a Due Date is not received.
"DENOMINATION": With respect to each Bond, the amount set forth on the
face thereof as the "Initial Principal Amount of this Bond".
"DEPOSIT TRUST AGREEMENT": The Deposit Trust Agreement, dated as of
April 1, 2002, between the Owner Trustee and the Depositor, creating the Issuer,
as such Deposit Trust Agreement may be amended or supplemented from time to
time.
"DEPOSITOR": Sequoia Mortgage Funding Corporation, a Delaware
corporation.
"DEPOSITORY": The initial Depository with respect to each Class of Book
Entry Bonds shall be The Depository Trust Company of New York, the nominee for
which is Cede & Co. The Depository shall at all times be a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
10
"DEPOSITORY PARTICIPANTS": A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
"DESIGNATED TELERATE PAGE": The display set forth on the Dow ▇▇▇▇▇
Telerate Service page 3750 (or such other page as may replace page 3750 on that
service, or such other service that may be nominated by the BBA as the
information vendor for the purpose of displaying the BBA's Interest Settlement
Rates for deposit in U.S. dollars.
"DETERMINATION DATE": As to any Payment Date, the 10th day of each month
or if such 10th day is not a Business Day the next preceding Business Day.
"DISTRIBUTION ACCOUNT": The separate Eligible Account created and
maintained by the Trustee pursuant to Section 8.02 in the name of the Trustee
for the benefit of the Bondholders and designated "Deutsche Bank National Trust
Company, in trust for registered holders of Sequoia Mortgage Trust 6,
Collateralized Mortgage Bonds." Funds in the Distribution Account (exclusive of
any earnings on investments made with funds deposited in the Distribution
Account) shall be held in trust for the Bondholders for the uses and purposes
set forth in this Indenture.
"DISTRIBUTION ACCOUNT DEPOSIT DATE": The 18th day of each calendar month
after the initial issuance of the Bonds or, if such 18th day is not a Business
Day, the next succeeding Business Day, commencing in May 2002.
"DUE DATE": The first day of each month.
"DUE PERIOD": As to any Payment Date the period beginning on the second
day of the month preceding the month of such Payment Date, and ending on the
first day of the month of such Payment Date.
"ELIGIBLE ACCOUNT": Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
short-term unsecured debt obligations of which (or, in the case of a depository
institution or trust company that is the principal subsidiary of a holding
company, the debt obligations of such holding company) have the highest
short-term ratings of each Rating Agency at the time any amounts are held on
deposit therein, or (ii) an account or accounts in a depository institution or
trust company in which such accounts are insured by the FDIC or the SAIF (to the
limits established by the FDIC or the SAIF) and the uninsured deposits in which
accounts are otherwise secured such that, as evidenced by an Opinion of Counsel
delivered to the Trustee and to each Rating Agency, the Bondholders have a claim
with respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a trust account or accounts maintained with
the trust department of a federal or state chartered depository institution or
trust company, acting in its fiduciary capacity or (iv) any other account
acceptable to each Rating Agency. Eligible Accounts may bear interest, and may
include, if otherwise qualified under this definition, accounts maintained with
the Trustee.
11
"ERISA RESTRICTED BOND": Any of the Class B-4, Class B-5 or Class B-6
Bonds.
"ESCROW ACCOUNT": As defined in Section 1 of each Servicing Agreement.
"EVENT OF DEFAULT": The meaning specified in Section 5.01.
"EXCESS LOSS": With respect to any Mortgage Loan, the amount of any (i)
Fraud Loss realized after the Fraud Loss Coverage Termination Date, (ii) Special
Hazard Loss realized after the Special Hazard Loss Coverage Termination Date or
(iii) Bankruptcy Loss realized after the Bankruptcy Loss Coverage Termination
Date.
"EXPENSE RATE": As to each Mortgage Loan, the sum of the related
Servicing Fee Rate and Trustee Fee Rate.
"FDIC": The Federal Deposit Insurance Corporation, or any successor
thereto.
"FHLMC": The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
"FITCH": Fitch, Inc., or any successor thereto. For purposes of Section
12.04 the address for notices to Fitch shall be Fitch, Inc., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Residential Mortgage Surveillance
Group, or such other address as Fitch may hereafter furnish to the Issuer and
the Servicers.
"FNMA": The Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
"FRAUD LOSS COVERAGE AMOUNT": As of the Closing Date, $15,431,466,
subject to reduction from time to time by the amount of any Fraud Losses
allocated to the Bonds. In addition, on each anniversary of the Cut-Off Date,
the Fraud Loss Coverage Amount shall be reduced as follows: (a) on the first
anniversary of the Cut-Off Date, to an amount equal to the lesser of (i) 2.00%
of the then current Pool Stated Principal Balance and (ii) the excess of the
Fraud Loss Coverage Amount as of the Cut-Off Date over the cumulative amount of
Fraud Losses allocated to the Bonds since the Cut-Off Date; (b) on the second,
third and fourth anniversaries of the Cut-Off Date, an amount equal to the
lesser of (i) 1.00% of the then current Pool Stated Principal Balance and (ii)
the excess of the Fraud Loss Coverage Amount as of the immediately preceding
anniversary of the Cut-Off Date, over the cumulative amount of Fraud Losses
allocated to the Bonds since such preceding anniversary; and (c) on the fifth
anniversary of the Cut-Off Date, to zero; provided, however, that the Fraud Loss
Coverage Amount may also be reduced pursuant to a letter from each Rating Agency
to the Trustee to the effect that any such reduction shall not result in the
downgrading of the then current ratings assigned by such Rating Agency to the
Classes of Senior Bonds.
"FRAUD LOSS COVERAGE TERMINATION DATE": The date on which the Fraud Loss
Coverage Amount is reduced to zero.
12
"FRAUD LOSSES": Realized Losses on any Mortgage Loan sustained by reason
of a default arising from fraud, dishonesty or misrepresentation in connection
with that Mortgage Loan.
"GRANT": To grant, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, mortgage, pledge, create and grant a security interest
in, deposit, set-over and confirm. A Grant of a Mortgage Loan and related
Mortgage Documents, the pledge, control and guaranty agreements and the Limited
Purpose Surety Bonds relating to the Additional Collateral Mortgage Loans, any
Permitted Investment, the Servicing Agreements, or any other instrument shall
include all rights, powers and options (but none of the obligations) of the
Granting party thereunder, including, without limitation, the immediate and
continuing right to claim for, collect, receive and give receipts for principal
and interest payments thereunder, Insurance Proceeds, condemnation awards,
purchase prices and all other moneys payable thereunder and all proceeds
thereof, to give and receive notices and other communications, to make waivers
or other agreements, to exercise all rights and options, to bring Proceedings in
the name of the Granting party or otherwise, and generally to do and receive
anything which the Granting party is or may be entitled to do or receive
thereunder or with respect thereto.
"HIGHEST LAWFUL RATE": The meaning specified in Section 12.18.
"HOLDER": The holder of Bonds issued pursuant to this Indenture.
"INDENTURE" or "THIS INDENTURE": This instrument as originally executed
and, if from time to time supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
as so supplemented or amended. All references in this instrument to designated
"Articles", "Sections", "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of this
instrument as originally executed. The words "herein", "hereof" and "hereunder"
and other words of similar import refer to this Indenture as a whole and not to
any particular Article, Section, Subsection or other subdivision.
"INDEPENDENT": When used with respect to any specified Person means such
a Person who (i) is in fact independent of the Issuer and any other obligor upon
the Bonds, (ii) does not have any direct financial interest or any material
indirect financial interest in the Issuer or in any such other obligor or in an
Affiliate of the Issuer or such other obligor and (iii) is not connected with
the Issuer or any such other obligor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Whenever it is herein provided that any Independent Person's opinion or
certificate shall be furnished to the Trustee, such Person shall be appointed by
an Issuer Order and with the approval of the Trustee, which approval shall not
be unreasonably withheld, and such opinion or certificate shall state that the
signer has read this definition and that the signer is Independent within the
meaning hereof.
"INDEX": As to each Mortgage Loan, the index from time to time in effect
for the adjustment of the Mortgage Rate set forth as such on the related
Mortgage Note.
13
"INDIVIDUAL BOND": A Bond of an original principal amount of $1,000; a
Bond of an original principal amount in excess of $1,000 shall be deemed to be a
number of Individual Bonds equal to the quotient obtained by dividing such
original principal amount by $1,000.
"INITIAL BANKRUPTCY LOSS COVERAGE AMOUNT": $100,000.
"INITIAL MORTGAGE LOANS": The same meaning as Mortgage Loans.
"INSURANCE POLICY": With respect to any Mortgage Loan, any insurance
policy, including all riders and endorsements thereto in effect, including any
replacement policy or policies for any Insurance Policies.
"INSURANCE PROCEEDS": Proceeds paid by an insurer pursuant to any
Insurance Policy, in each case other than any amount included in such Insurance
Proceeds in respect of Insured Expenses and the proceeds from any Limited
Purpose Surety Bonds.
"INSURED EXPENSES": Expenses covered by an Insurance Policy or any other
insurance policy with respect to the Mortgage Loans.
"INTEREST ADJUSTMENT DATE": As to the Mortgage Loans, the date on which
the first Adjustment Date occurs.
"INTEREST PAYMENT AMOUNT": For each Class of Bonds, on any Payment Date,
the Current Interest for such Class, as reduced by such Class's share of Net
Prepayment Interest Shortfalls, Relief Act Reductions and the interest portion
of Excess Losses. Any such shortfalls shall be allocated among all Classes of
Bonds, proportionately on the basis of the Interest Payment Amounts otherwise
payable thereon.
"INTEREST SHORTFALL": As to any Class of Bonds and any Payment Date, (i)
the amount by which the Interest Payment Amount (as reduced by any Basis Risk
Shortfalls) for such Class on such Payment Date and all prior Payment Dates
exceeds (ii) amounts distributed in respect thereof to such Class on prior
Payment Dates.
"ISSUER": Sequoia Mortgage Trust 6 formed pursuant to the Deposit Trust
Agreement.
"ISSUER ORDER" and "ISSUER REQUEST": A written order or request that is
dated and signed in the name of the Issuer by an Authorized Officer and
delivered to the Trustee.
"LETTER AGREEMENT": With respect to the Book Entry Bonds, the letter
agreement among the Issuer, the Trustee and the Depository governing book entry
transfers of, and certain other matters with respect to, such Book Entry Bonds
and attached as Exhibit I hereto.
"LIBOR": The London Interbank Rate for U.S. dollar deposits determined
as provided in Section 2.20.
"LIBOR BONDS": The Class A, Class B-1, Class B-2, and Class B-3 Bonds.
14
"LIBOR Business Day": Any day on which banks in London and New York are
open for conducting transactions in foreign currency and exchange.
"LIBOR Determination Date": The second LIBOR Business Day preceding the
commencement of each Accrual Period.
"LIMITED PURPOSE SURETY BONDS": The Limited Purpose Surety Bonds listed
in Exhibit XIII.
"LIQUIDATED MORTGAGE LOAN": With respect to any Payment Date, a
defaulted Mortgage Loan (including any REO Property) which was liquidated in the
calendar month preceding the month of such Payment Date and as to which the
related Servicer has certified (in accordance with its Servicing Agreement) that
it has received all amounts it expects to receive in connection with the
liquidation of such Mortgage Loan including the final disposition of an REO
Property.
"LIQUIDATION PROCEEDS": Amounts, including Insurance Proceeds, received
in connection with the partial or complete liquidation of defaulted Mortgage
Loans, whether through trustee's sale, foreclosure sale or otherwise or amounts
received in connection with any condemnation or partial release of a Mortgaged
Property and any other proceeds received in connection with an REO Property.
"LOAN-TO-VALUE RATIO": With respect to any Mortgage Loan and as to any
date of determination, the fraction (expressed as a percentage) the numerator of
which is the principal balance of the related Mortgage Loan at such date of
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.
"LOWER-TIER INTEREST": Any one of the Lower-Tier Regular Interests or
the Lower-Tier Interest R as described in Article XI.
"LOWER-TIER REMIC": As described in Article XI.
"MARGIN": As to each Mortgage Loan, the percentage amount set forth on
the related Mortgage Note added to the Index in calculating the Mortgage Rate
thereon.
"MATURITY": With respect to any Bond, the date on which the entire
unpaid principal amount of such Bond becomes due and payable as therein or
herein provided, whether at the Stated Maturity of the final installment of such
principal or by declaration of acceleration, call for redemption or otherwise.
"MAXIMUM RATE": As to any Mortgage Loan, the maximum rate set forth on
the related Mortgage Note at which interest can accrue on such Mortgage Loan.
"MOODY'S": ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
For purposes of Section 12.04 the address for notices to Moody's shall be
▇▇▇▇▇'▇ Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Structured Finance or such other address as Moody's may hereafter
furnish to the Issuer and the Servicers.
15
"MORTGAGE": The mortgage, deed of trust or other instrument creating a
first lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
"MORTGAGE DOCUMENTS": With respect to each Mortgage Loan, the mortgage
documents required to be delivered to the Custodian pursuant to the Custodial
Agreement.
"MORTGAGE LOAN PURCHASE AND SALE AGREEMENT": The Mortgage Loan Purchase
and Sale Agreement, dated as of April 1, 2002, among the Seller, the Depositor
and the Issuer.
"MORTGAGE LOAN SCHEDULE": The list of Mortgage Loans (as from time to
time amended by the Servicers to reflect the addition of Replacement Mortgage
Loans and the deletion of Deleted Mortgage Loans pursuant to the provisions of
the Servicing Agreements) Granted to the Trustee pursuant to the provisions
hereof as part of the Trust Estate and from time to time subject to this
Agreement, attached hereto as Schedule I.
"MORTGAGE LOANS": The Mortgage Loans listed on the Mortgage Loan
Schedule and Granted to the Trustee on the Closing Date pursuant to the
provisions hereof and held from time to time as a part of the Trust Estate
(including any Replacement Mortgage Loans and REO Property), notwithstanding
foreclosure or other acquisition of title of the related Mortgaged Property.
"MORTGAGE NOTE": The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"MORTGAGE RATE": The annual rate of interest borne by a Mortgage Note
from time to time.
"MORTGAGED PROPERTY": The underlying property, including any Additional
Collateral, securing a Mortgage Loan, which, with respect to a Cooperative Loan,
is the related Cooperative Shares and Proprietary Lease.
"MORTGAGOR": The obligor(s) on a Mortgage Note.
"NET LIQUIDATION PROCEEDS": With respect to any Liquidated Mortgage Loan
or any other disposition of related Mortgaged Property, the related Liquidation
Proceeds net of Advances, related Servicing Fees and any other accrued and
unpaid servicing fees received and retained in connection with the liquidation
of such Mortgage Loan or Mortgaged Property.
"NET MORTGAGE RATE": As to any Mortgage Loan and Payment Date, the
related Mortgage Rate as of the Due Date in the month preceding the month of
such Payment Date reduced by the related Expense Rate.
"NET PREPAYMENT INTEREST SHORTFALLS": With respect to any Mortgage Loan
and any Payment Date, the amount by which any Prepayment Interest Shortfall for
such date exceeds the amount payable by the related Servicers in respect of such
shortfall.
16
"NET WAC": As to any Payment Date, the weighted average of the Net
Mortgage Rates of the Mortgage Loans as of the Due Date of the month preceding
the month of such Payment Date, weighted on the basis of their outstanding
Stated Principal Balances (after giving effect to the Scheduled Payments due on
or before such Due Date and Principal Prepayments received prior to such Due
Date) at such time.
"NONRECOVERABLE ADVANCE": Any portion of an Advance or Servicer Advance
previously made or proposed to be made by a Servicer, which in the good faith
judgment such Servicer, shall not be ultimately recoverable by the Servicer from
the related Mortgagor, related Liquidation Proceeds or otherwise, as certified
in an Officer's Certificate of the Servicer.
"NOTIONAL AMOUNT": With respect to a Class X Bond and any date of
determination, the product of (i) the Percentage Interest represented by such
Class X Bond and (ii) the Class Notional Amount of the Class X Bonds on such
date.
"OFFICERS' CERTIFICATE": A certificate signed by two Authorized
Officers.
"OFFICER'S CERTIFICATE OF THE SERVICER": A certificate (i) signed by the
Chairman of the Board, the Vice Chairman of the Board, the President, a Managing
Director, a Vice President (however denominated), an Assistant Vice President,
the Treasurer, the Secretary, or one of the Assistant Treasurers or Assistant
Secretaries of a Servicer, or (ii) if provided for herein, signed by a Servicing
Officer, as the case may be, and delivered to the Trustee, as required hereby.
"OPERATIVE AGREEMENTS": The meaning ascribed thereto in the Deposit
Trust Agreement.
"OPINION OF COUNSEL": A written opinion of counsel who may, except as
otherwise expressly provided in this Indenture, be counsel for the Issuer, and
who shall be reasonably satisfactory to the Trustee.
"ORIGINAL APPLICABLE CREDIT SUPPORT PERCENTAGE": With respect to each
Class of Subordinate Bonds, the corresponding percentage set forth below
opposite its Class designation:
Class B-1 3.50%
Class B-2 2.35
Class B-3 1.35
Class B-4 0.90
Class B-5 0.60
Class B-6 0.40
"ORIGINAL CAPITALIZED INTEREST AMOUNT": Not applicable.
"ORIGINAL PRE-FUNDED AMOUNT": Not applicable.
17
"ORIGINAL SUBORDINATE PRINCIPAL BALANCE": The aggregate of the initial
Class Principal Amounts of the Classes of Subordinate Bonds.
"OUTSTANDING": As of the date of determination, all Bonds theretofore
authenticated and delivered under this Indenture except:
(i) Bonds theretofore cancelled by the Bond Registrar or
delivered to the Bond Registrar for cancellation;
(ii) Bonds or portions thereof for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Issuer) in trust for the
Holders of such Bonds; provided, however, that if such Bonds are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor, satisfactory to the Trustee, has been
made;
(iii) Bonds in exchange for or in lieu of which other Bonds have
been authenticated and delivered pursuant to this Indenture unless proof
satisfactory to the Trustee is presented that any such Bonds are held by
a bona fide purchaser (as defined by the Uniform Commercial Code of the
applicable jurisdiction); and
(iv) Bonds alleged to have been destroyed, lost or stolen for
which replacement Bonds have been issued as provided for in Section
2.08;
provided, however, that in determining whether the Holders of the requisite
percentage of the aggregate Class Principal Amount of the Outstanding Bonds have
given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Bonds owned by the Issuer, any other obligor upon the Bonds or any
Affiliate of the Issuer or such other obligor shall be disregarded and deemed
not to be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Bonds which a Responsible Officer of the Trustee
actually knows to be so owned shall be so disregarded. Bonds so owned which have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Bonds and that the pledgee is not the Issuer, any other
obligor upon the Bonds or any Affiliate of the Issuer or such other obligor.
"OUTSTANDING MORTGAGE LOAN": As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
"OWNER": Sequoia Mortgage Funding Corporation, as owner of the investor
certificate issued pursuant to the Deposit Trust Agreement.
"OWNER TRUSTEE": Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Deposit Trust Agreement, until a successor Person shall have become the
Owner Trustee pursuant to the applicable
18
provisions of the Deposit Trust Agreement, and thereafter "Owner Trustee" shall
mean such successor Person.
"PAYING AGENT": The Trustee or any other depository institution or trust
company that is authorized by the Issuer pursuant to Section 3.03 to pay the
principal of, or interest on, any Bonds on behalf of the Issuer.
"PAYMENT DATE STATEMENT": The meaning specified in Section 8.08.
"PAYMENT DATE": The 19th day of each calendar month after the initial
issuance of the Bonds or, if such 19th day is not a Business Day, the next
succeeding Business Day, commencing in May 2002.
"PERCENTAGE INTEREST": With respect to any Class X Bond, the percentage
equivalent of a fraction, the numerator of which is such Bond's initial Notional
Amount and the denominator of which is the initial Class Notional Amount of the
Class X Bonds.
"PERMITTED ENCUMBRANCE": Any lien, charge, security interest, mortgage
or other encumbrance Granted by the Issuer in the Trust Estate, provided that:
(i) such lien, charge, security interest, mortgage or encumbrance
extends only to a portion of the Trust Estate which is limited to cash
deliverable or payable to the Issuer pursuant to Section 8.01 or Section
8.02(d);
(ii) such lien, charge, security interest, mortgage or other
encumbrance secures indebtedness which the Issuer is permitted to incur
under the terms of this Indenture; and
(iii) the beneficiary of such lien, charge, security interest,
mortgage or other encumbrance has agreed that in connection with the
enforcement thereof it shall not bring any Proceeding seeking, or which
would result in, the sale of any portion of the Trust Estate and shall
not file any petition for the commencement of insolvency proceedings
with respect to the Issuer under the federal bankruptcy laws, as now or
hereafter in effect, or any other present or future federal or state
bankruptcy, insolvency or similar law, or for the appointment of any
receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Issuer or of any of its property, or
seeking an order for the winding up or liquidation of the affairs of the
Issuer.
"PERMITTED INVESTMENTS": At any time, any one or more of the following
obligations and securities:
(i) obligations of the United States or any agency thereof,
provided that such obligations are backed by the full faith and credit
of the United States;
(ii) general obligations of or obligations guaranteed by any
state of the United States or the District of Columbia receiving the
highest long-term debt rating of each Rating Agency, or such lower
rating as shall not result in the downgrading or withdrawal
19
of the ratings then assigned to the Bonds by the Rating Agencies, as
evidenced by a signed writing delivered by each Rating Agency;
(iii) commercial or finance company paper which is then receiving
the highest commercial or finance company paper rating of each Rating
Agency, or such lower rating as shall not result in the downgrading or
withdrawal of the ratings then assigned to the Bonds by the Rating
Agencies, as evidenced by a signed writing delivered by each Rating
Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or trust
company incorporated under the laws of the United States or of any state
thereof and subject to supervision and examination by federal and/or
state banking authorities, provided that the commercial paper and/or
long-term unsecured debt obligations of such depository institution or
trust company (or in the case of the principal depository institution in
a holding company system, the commercial paper or long-term unsecured
debt obligations of such holding company, but only if ▇▇▇▇▇'▇ is not the
applicable Rating Agency) are then rated one of the two highest
long-term and the highest short-term ratings of each Rating Agency for
such securities, or such lower ratings as shall not result in the
downgrading or withdrawal of the ratings then assigned to the Bonds by
the Rating Agencies, as evidenced by a signed writing delivered by each
Rating Agency;
(v) demand or time deposits or certificates of deposit issued by
any bank or trust company or savings institution to the extent that such
deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any bank,
insurance company or other corporation acceptable to the Rating Agencies
at the time of the issuance of such agreements, as evidenced by a signed
writing delivered by each Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered into
with a depository institution or trust company (acting as principal)
described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped coupons
or instruments sold at a purchase price in excess of 115% of the face
amount thereof) bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States or any
state thereof which, at the time of such investment, have one of the two
highest ratings of each Rating Agency (except if the Rating Agency is
Moody's, such rating shall be the highest commercial paper rating of
Moody's for any such series), or such lower rating as shall not result
in the downgrading or withdrawal of the ratings then assigned to the
Bonds by the Rating Agencies, as evidenced by a signed writing delivered
by each Rating Agency;
(ix) interests in any money market fund which at the date of
acquisition of the interests in such fund and throughout the time such
interests are held in such fund has the
20
highest applicable rating by each Rating Agency or such lower rating as
shall not result in a change in the rating then assigned to the Bonds by
each Rating Agency including funds for which the Trustee or any of its
Affiliates is investment manager or adviser;
(x) short-term investment funds sponsored by any trust company or
national banking association incorporated under the laws of the United
States or any state thereof which on the date of acquisition has been
rated by each applicable Rating Agency in their respective highest
applicable rating category or such lower rating as shall not result in a
change in the rating then specified stated maturity and bearing interest
or sold at a discount acceptable to each Rating Agency as shall not
result in the downgrading or withdrawal of the ratings then assigned to
the Bonds by the Rating Agencies; and
(xi) such other investments having a specified stated maturity
and bearing interest or sold at a discount acceptable to the Rating
Agencies as shall not result in the downgrading or withdrawal of the
ratings then assigned to the Bonds by the Rating Agencies;
provided, that no such instrument shall be a Permitted Investment
if (i) such instrument evidences the right to receive interest only
payments with respect to the obligations underlying such instrument or
(ii) such instrument would require the Issuer to register as an
investment company under the Investment Company Act of 1940, as amended.
"PERSON": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLEDGED ACCOUNTS": The Distribution Account and the Basis Risk Reserve
Fund.
"POOL STATED PRINCIPAL BALANCE": As to any Payment Date, the aggregate
of the Stated Principal Balances of the Mortgage Loans which were Outstanding
Mortgage Loans on the Due Date in the month preceding the month of such Payment
Date.
"PREDECESSOR BONDS": With respect to any particular Bond of a Class,
every previous Bond of that Class evidencing all or a portion of the same debt
as that evidenced by such particular Bond; and, for the purpose of this
definition, any Bond authenticated and delivered under Section 2.08 in lieu of a
lost, destroyed or stolen Bond shall be deemed to evidence the same debt as the
lost, destroyed or stolen Bond.
"PRE-FUNDED AMOUNT": Not applicable.
"PRE-FUNDING ACCOUNT": Not applicable.
"PRE-FUNDING PERIOD": Not applicable.
"PREPAYMENT ASSUMPTION": 25% CPR, as defined in the Prospectus
Supplement.
21
"PREPAYMENT INTEREST SHORTFALL": As to any Payment Date and any
Principal Prepayment, the amount, if any, by which one month's interest at the
related Mortgage Rate on such Principal Prepayment exceeds the amount of
interest paid in connection with such Principal Prepayment.
"PREPAYMENT PERIOD": As to any Payment Date, the calendar month
preceding the month of such Payment Date.
"PRIMARY MORTGAGE INSURANCE POLICY": Each policy of primary mortgage
guaranty insurance or any replacement policy therefor with respect to any
Mortgage Loan.
"PRINCIPAL PAYMENT AMOUNT": With respect to any Payment Date, the sum of
(a) each Scheduled Payment of principal collected or advanced on the Mortgage
Loans (before taking into account any Deficient Valuations or Debt Service
Reductions) and due during the related Due Period, (b) that portion of the
Purchase Price representing principal of any Mortgage Loans purchased in
accordance with Section 8.04 or Section 8.05 hereof and received during the
related Prepayment Period, (c) the principal portion of any Substitution
Adjustments received during the related Prepayment Period, (d) the principal
portion of all Insurance Proceeds received during the related Prepayment Period
with respect to Mortgage Loans that are not yet Liquidated Mortgage Loans, (e)
the principal portion of all Net Liquidation Proceeds received during the
related Prepayment Period with respect to Liquidated Mortgage Loans, (f) the
principal portion of all partial and full principal prepayments of Mortgage
Loans applied by the Servicers during the related Prepayment Period, and (g) on
the Payment Date on which the Trust Estate is to be terminated pursuant to
Article X hereof, that portion of the Redemption Price in respect of principal.
"PRINCIPAL PREPAYMENT": Any payment of principal on a Mortgage Loan that
is received in advance of its scheduled Due Date.
"PRINCIPAL PREPAYMENT IN FULL": Any Principal Prepayment of the entire
principal balance of a Mortgage Loan.
"PRIVATE BOND": Any of the Class B-4, Class B-5, Class B-6 or Class X
Bonds.
"PROPRIETARY LEASE": With respect to any Cooperative Property, a lease
or occupancy agreement between a Cooperative Corporation and a holder of related
Cooperative Shares. "PRO RATA SENIOR PERCENTAGE": With respect to any Payment
Date, the percentage equivalent of a fraction the numerator of which is the
aggregate of the Class Principal Amounts of the Classes of Senior Bonds
immediately prior to such Payment Date and the denominator of which is the Pool
Stated Principal Balance for such Payment Date.
"PRO RATA SHARE": As to any Payment Date and any Class of Subordinate
Bonds, the portion of the Subordinate Principal Payment Amount allocable to such
Class, equal to the product of the (a) Subordinate Principal Payment Amount on
such date and (b) a fraction, the numerator of which is the Class Principal
Amount of such Class and the denominator of which is the aggregate of the Class
Principal Amounts of all Classes of Subordinate Bonds.
22
"PROCEEDING": Any suit in equity, action at law or other judicial or
administrative proceeding.
"PROPRIETARY LEASE": As defined in Section 1 of the Servicing
Agreements.
"PROSPECTUS SUPPLEMENT": The Prospectus Supplement dated April 11, 2002
relating to the initial sale of the Senior Bonds (other than the Class X Bonds)
and the Class B-1, Class B-2 and Class B-3 Bonds.
"PURCHASE AGREEMENTS": The mortgage purchase agreements listed in
Exhibit XII hereto, as each such agreement may be amended or supplemented from
time to time as permitted hereunder.
"PURCHASE PRICE": With respect to any Mortgage Loan required or
permitted to be purchased by the Issuer or the Seller or Depositor pursuant to
this Indenture, by the Servicers pursuant to the Servicing Agreements, or by the
sellers pursuant to the Purchase Agreements, an amount equal to the sum of (i)
100% of the unpaid principal balance of the Mortgage Loan on the date of such
purchase, and (ii) accrued interest thereon at the applicable Net Mortgage Rate
from the date through which interest was last paid by the Mortgagor to the Due
Date in the month in which the Purchase Price is to be distributed to
Bondholders.
"RATING AGENCY": Each of S&P, ▇▇▇▇▇'▇ and Fitch. If any such
organization or a successor is no longer in existence, "Rating Agency" shall be
such nationally recognized statistical rating organization, or other comparable
Person, as is designated by the Issuer, notice of which designation shall be
given to the Trustee. References herein to a given rating or rating category of
a Rating Agency shall mean such rating category without giving effect to any
modifiers.
"REALIZED LOSS": With respect to each Liquidated Mortgage Loan, an
amount (not less than zero or more than the Stated Principal Balance of the
Mortgage Loan) as of the date of such liquidation, equal to (i) the Stated
Principal Balance of the Liquidated Mortgage Loan as of the date of such
liquidation, plus (ii) interest at the Net Mortgage Rate from the Due Date as to
which interest was last paid or advanced (and not reimbursed) to Bondholders up
to the Due Date in the month in which Liquidation Proceeds are required to be
distributed on the Stated Principal Balance of such Liquidated Mortgage Loan
from time to time, minus (iii) the Liquidation Proceeds, if any, received during
the month in which such liquidation occurred, to the extent applied as
recoveries of interest at the Net Mortgage Rate and to principal of the
Liquidated Mortgage Loan. With respect to each Mortgage Loan which has become
the subject of a Deficient Valuation, if the principal amount due under the
related Mortgage Note has been reduced, the difference between the principal
balance of the Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the principal balance of the Mortgage Loan as reduced by the
Deficient Valuation.
"RECORD DATE": As to any Payment Date (i) with respect to the Book-Entry
Bonds, the last Business Day preceding such Payment Date (or the Closing Date,
in the case of the first Payment Date), and (ii) in the case of all other Bonds
(including Book-Entry Bonds that are
23
subsequently reissued as Definitive Bonds), the last Business Day of the
month preceding the month of each Payment Date.
"REDEMPTION AMOUNT": As defined in Section 10.01(b) hereof.
"REDEMPTION DATE": Any Payment Date on which Bonds may be redeemed.
"REDEMPTION PRICE": With respect to any Class of Bonds to be redeemed,
an amount equal to 100% of the related Class Principal Amount of the Bonds to be
so redeemed, together with interest on such amount at the applicable Bond
Interest Rate through the related Accrual Period (as increased by any Interest
Shortfalls).
"REDEMPTION RECORD DATE": The meaning specified in Section 10.02.
"REFINANCING MORTGAGE LOAN": Any Mortgage Loan originated in connection
with the refinancing of an existing mortgage loan.
"RELIEF ACT": The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended, and any similar state law.
"RELIEF ACT REDUCTIONS": With respect to any Payment Date and any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the most recently ended calendar month as a result of
the application of the Relief Act, the amount, if any, by which (i) interest
collectible on such Mortgage Loan for the most recently ended calendar month is
less than (ii) interest accrued thereon for such month pursuant to the Mortgage
Note.
"REMIC": A "real estate mortgage investment conduit," as such term is
defined in the Code.
"REMIC PROVISIONS": Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Section 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
regulations promulgated thereunder, as the foregoing may be in effect from time
to time.
"REO PROPERTY": A Mortgaged Property acquired by the Trustee through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.
"REPLACEMENT MORTGAGE LOAN": A mortgage loan substituted by a Servicer
for a Deleted Mortgage Loan which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form attached to the
Custodial Agreement, (i) have a Stated Principal Balance, after deduction of the
principal portion of the Scheduled Payment due in the month of substitution, not
in excess of, and not more than 10% less than, the Stated Principal Balance of
the Deleted Mortgage Loan; (ii) be accruing interest at a rate no lower than and
not more than 1% per annum higher than, that of the Deleted Mortgage Loan; (iii)
have a Loan-to-Value Ratio no higher than that of the Deleted Mortgage Loan;
(iv) have a Mortgage Rate based upon the same Index and a Margin at least equal
to and not greater than 50 basis
24
points higher than that of the Deleted Mortgage Loan; (v) have a Maximum Rate
that is no less than the Maximum Rate of the Deleted Mortgage Loan; (vi) have
Adjustment Dates that are no more or less frequent than the Deleted Mortgage
Loan; (vii) have a remaining term to maturity no greater than (and not more than
one year less than that of) the Deleted Mortgage Loan; (viii) not be a
Cooperative Loan unless the Deleted Mortgage Loan was a Cooperative Loan; (ix)
comply with each representation and warranty set forth in Article III of each
Servicing Agreement; and (x) shall be accompanied by an Opinion of Counsel that
such Replacement Mortgage Loan would not adversely affect the REMIC status of
the Trust Estate or would not otherwise be prohibited by this Indenture.
"REQUEST FOR RELEASE": The Request for Release submitted by the
Servicers to the Trustee and the Custodian, substantially in the form attached
to the Custodial Agreement.
"REQUIRED RATINGS": For each Class of Bonds (other than the Class B-6
Bonds) the ratings set forth below from the specified Rating Agency:
▇▇▇▇▇'▇ S&P FITCH
CLASS RATING RATING RATING
----- ------- ------ ------
A Aaa AAA AAA
X Aaa AAA AAA
A-R Aaa AAA AAA
B-1 Aa2 AA AA
B-2 A2 A A
B-3 Baa2 BBB BBB
▇-▇ ▇▇▇ ▇▇ ▇▇
▇-▇ ▇▇ ▇ B
"RESPONSIBLE OFFICER": With respect to the Trustee, any officer in the
corporate trust department or similar group of the Trustee and also, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his or her knowledge of and familiarity with the
particular subject.
"S&P": Standard & Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇ Inc.
For purposes of Section 12.04 the address for notices to S&P shall be Standard &
Poor's Ratings Group, ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Mortgage Surveillance Monitoring, or such other address as S&P may
hereafter furnish to the Issuer and the Servicers.
"SAIF": The Savings Association Insurance Fund, or any successor
thereto.
"SALE": The meaning specified in Section 5.18(a).
"SCHEDULED PAYMENT": The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified in the Servicing Agreements, shall give effect
to any related Debt Service Reduction and any Deficient Valuation that affects
the amount of the monthly payment due on such Mortgage Loan.
"SECURITIES ACT": The Securities Act of 1933, as amended.
25
"SELLER": Redwood Trust, Inc., a Maryland corporation.
"SENIOR BOND": Any one of the Class A, Class A-R or Class X Bonds.
"SENIOR PERCENTAGE": Except as provided in this definition, with respect
to any Payment Date before May 2012, 100%. The Senior Percentage for any Payment
Date occurring (i) before May 2012 but in or after April 2005 on which the Two
Times Test is satisfied, or (ii) in or after May 2012, is the Pro Rata Senior
Percentage. If the Two Times Test is satisfied prior to April 2005 and
cumulative Realized Losses with respect to the Mortgage Loans do not exceed 20%
of the Original Subordinate Principal Balance, the Senior Percentage is the Pro
Rata Senior Percentage plus 50% of an amount equal to 100% minus the related Pro
Rata Senior Percentage. If on any Payment Date the allocation to the Senior
Bonds then entitled to distributions of principal of full and partial principal
prepayments and other amounts in the percentage required above would reduce the
sum of the Class Principal Amounts of those Bonds to below zero, the related
Senior Percentage for such Payment Date shall be limited to the percentage
necessary to reduce that Class Principal Amount to zero.
"SENIOR PREPAYMENT PERCENTAGE": With respect to any Payment Date during
the ten years beginning on the first Payment Date, 100%. Except as provided
herein, the Senior Prepayment Percentage for any Payment Date occurring on or
after the tenth anniversary of the first Payment Date shall be as follows: (i)
from May 2012 through April 2013, the Senior Percentage plus 70% of the
Subordinate Percentage for that Payment Date; (ii) from May 2013 through April
2014, the Senior Percentage plus 60% of the Subordinate Percentage for that
Payment Date; (iii) from May 2014 through April 2015, the Senior Percentage plus
40% of the Subordinate Percentage for that Payment Date; (iv) from May 2015
through April 2016, the Senior Percentage plus 20% of the Subordinate Percentage
for that Payment Date; and (v) from and after May 2016, the Senior Percentage
for that Payment Date; provided, however, that there shall be no reduction in
the Senior Prepayment Percentage unless both Step Down Conditions are satisfied;
and provided, further, that if on any such Payment Date the Pro Rata Senior
Percentage exceeds the initial Pro Rata Senior Percentage, the Senior Prepayment
Percentage for that Payment Date shall again equal 100%.
Notwithstanding the above, if on any Payment Date the Two Times Test is
satisfied, the Senior Prepayment Percentage shall equal the Senior Percentage
for such Payment Date. In addition, if on any Payment Date the allocation to the
Senior Bonds then entitled to distributions of principal of full and partial
principal prepayments and other amounts in the percentage required above would
reduce the sum of the Class Principal Amounts of those Bonds to below zero, the
related Senior Prepayment Percentage for such Payment Date shall be limited to
the percentage necessary to reduce that Class Principal Amount to zero.
"SENIOR PRINCIPAL PAYMENT AMOUNT": With respect to any Payment Date, the
sum of:
(1) the Senior Percentage of all amounts described in
clauses (a) through (d) of the definition of "Principal Payment Amount"
for that Payment Date;
26
(2) with respect to each Mortgage Loan which became a
Liquidated Mortgage Loan during the related Prepayment Period, the
lesser of
(x) the Senior Percentage of the Stated Principal
Balance of that Mortgage Loan and
either
(y) the Senior Prepayment Percentage of the amount
of the Net Liquidation Proceeds allocable to principal received
with respect to that Mortgage Loan.
or
(z) if an Excess Loss was sustained with respect to
such Liquidated Mortgage Loan during such related Prepayment
Period, the Senior Percentage of the amount of Net Liquidation
Proceeds allocable to principal received with respect to that
Mortgage Loan; and
(3) the Senior Prepayment Percentage of the amounts
described in clause (f) of the definition of "Principal Payment Amount";
provided, however, that if a Bankruptcy Loss that is an Excess Loss is
sustained with respect to any Mortgage Loan that is not a Liquidated
Mortgage Loan, such Senior Principal Payment Amount shall be reduced on
such Payment Date by the Senior Percentage of the principal portion of
such Bankruptcy Loss.
"SERVICER": ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Credit Corporation, or any
successor in interest.
"SERVICER ADVANCE": The meaning ascribed to such term in the applicable
Servicing Agreements.
"SERVICING AGREEMENTS": The agreements listed in Exhibit XI, as each
such agreement may be amended or supplemented from time to time as permitted
thereby.
"SERVICING DEFAULT": As defined in the Servicing Agreements.
"SERVICING FEE": As to each Mortgage Loan and any Payment Date, an
amount equal to one month's interest at the applicable Servicing Fee Rate on the
Stated Principal Balance of such Mortgage Loan.
"SERVICING FEE RATE": With respect to any Mortgage Loan, the per annum
rate set forth in the Mortgage Loan Schedule for such Mortgage Loan.
"SERVICING OFFICER": Any officer of the Servicers involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature
27
appear on a list of servicing officers furnished to the Trustee by the Servicers
on the Closing Date pursuant to the Servicing Agreements, as such list may from
time to time be amended.
"SPECIAL HAZARD LOSS": Any Realized Loss suffered by a Mortgaged
Property on account of direct physical loss but not including (i) any loss of a
type covered by a hazard insurance policy or a flood insurance policy required
to be maintained with respect to such Mortgaged Property to the extent of the
amount of such loss covered thereby, or (ii) any loss caused by or resulting
from:
(a) normal wear and tear;
(b) fraud, conversion or other dishonest act on the part of
the Trustee, a Servicer or any of their agents or employees (without
regard to any portion of the loss not covered by any errors and
omissions policy);
(c) errors in design, faulty workmanship or faulty
materials, unless the collapse of the property or a part thereof ensues
and then only for the ensuing loss;
(d) nuclear or chemical reaction or nuclear radiation or
radioactive or chemical contamination, all whether controlled or
uncontrolled, and whether such loss be direct or indirect, proximate or
remote or be in whole or in part caused by, contributed to or aggravated
by a peril covered by the definition of the term "Special Hazard Loss";
(e) hostile or warlike action in time of peace and war,
including action in hindering, combating or defending against an actual,
impending or expected attack:
1. by any government or sovereign power, de jure or
de facto, or by any authority maintaining or using military,
naval or air forces; or
2. by military, naval or air forces; or
3. by an agent of any such government, power,
authority or forces;
(f) any weapon of war employing nuclear fission, fusion or
other radioactive force, whether in time of peace or war; or
(g) insurrection, rebellion, revolution, civil war, usurped
power or action taken by governmental authority in hindering, combating
or defending against such an occurrence, seizure or destruction under
quarantine or customs regulations, confiscation by order of any
government or public authority or risks of contraband or illegal
transportation or trade.
"SPECIAL HAZARD LOSS COVERAGE AMOUNT": With respect to the first Payment
Date, $5,800,000. With respect to any Payment Date after the first Payment Date,
the lesser of (a) the greatest of (i) 1% of the aggregate of the Stated
Principal Balances of the Mortgage Loan, (ii) twice the Stated Principal Balance
of the largest Mortgage Loan and (iii) the aggregate of the Stated Principal
Balances of the Mortgage Loans secured by Mortgaged
28
Properties located in the single five-digit ZIP code area in the State of
California having the highest aggregate Stated Principal Balance of any such ZIP
code area and (b) the Special Hazard Loss Coverage Amount as of the Closing Date
less the amount, if any, of Special Hazard Losses allocated to the Bonds since
the Closing Date; provided, however, that the Special Hazard Loss Coverage
Amount may also be reduced pursuant to a letter from each Rating Agency to the
Trustee to the effect that any such reduction shall not result in the
downgrading of the then current ratings assigned by such Rating Agency to the
Classes of Senior Bonds.
"SPECIAL HAZARD LOSS COVERAGE TERMINATION DATE": The date on which the
Special Hazard Loss Coverage Amount is reduced to zero.
"SPECIAL HAZARD MORTGAGE LOAN": A Liquidated Mortgage Loan as to which a
Special Hazard Loss has occurred.
"STATED MATURITY": With respect to each Class of Bonds, the Payment Date
occurring in April 2027.
"STATED PRINCIPAL BALANCE": As to any Mortgage Loan and Due Date, the
unpaid principal balance of such Mortgage Loan as of such Due Date as specified
in the amortization schedule at the time relating thereto (before any adjustment
to such amortization schedule by reason of any moratorium or similar waiver or
grace period) after giving effect to any previous partial Principal Prepayments
and Liquidation Proceeds allocable to principal (other than with respect to any
Liquidated Mortgage Loan) and to the payment of principal due on such Due Date
and irrespective of any delinquency in payment by the related Mortgagor.
"STEP DOWN CONDITIONS": As of the first Payment Date as to which any
decrease in any Senior Prepayment Percentage applies, (i) the outstanding Stated
Principal Balance of all Mortgage Loans 60 days or more Delinquent (including
Mortgage Loans in REO and foreclosure) (averaged over the preceding six month
period), as a percentage of the aggregate of the Class Principal Amounts of the
Classes of Subordinate Bonds on such Payment Date, does not equal or exceed 50%
and (ii) cumulative Realized Losses with respect to the Mortgage Loans do not
exceed (a) with respect to each Payment Date from May 2012 through April 2013,
30% of the Original Subordinate Principal Balance, (b) with respect to each
Payment Date from May 2013 through April 2014, 35% of the Original Subordinate
Principal Balance, (c) with respect to each Payment Date from May 2014 through
April 2015, 40% of the Original Subordinate Principal Balance, (d) with respect
to each Payment Date from May 2015 through April 2016, 45% of the Original
Subordinate Principal Balance and (e) with respect to each Payment Date from and
after May 2016, 50% of the Original Subordinate Principal Balance.
"SUBORDINATE BOND": Any of the Class B-1, Class B-2, Class B-3, Class
B-4, Class B-5 or Class B-6 Bonds.
"SUBORDINATE BOND WRITEDOWN AMOUNT": The amount described in Section
2.15(c).
"SUBORDINATE PERCENTAGE": With respect to any Payment Date, the
difference between 100% and the Senior Percentage for such Payment Date.
29
"SUBORDINATE PREPAYMENT PERCENTAGE": With respect to any Payment Date,
the difference between 100% and the Senior Prepayment Percentage for that
Payment Date.
"SUBORDINATE PRINCIPAL PAYMENT AMOUNT": With respect to any Payment
Date, an amount equal to the sum of:
(1) the Subordinate Percentage of all amounts described in
clauses (a) through (d) of the definition of "Principal Payment
Amount" for that Payment Date;
(2) with respect to each Mortgage Loan that became a
Liquidated Mortgage Loan during the related Prepayment Period the
amount of the Net Liquidation Proceeds allocated to principal
received with respect thereto remaining after application thereof
pursuant to clause (2) of the definition of "Senior Principal
Payment Amount" for that Payment Date, up to the Subordinate
Percentage of the Stated Principal Balance of such Mortgage Loan;
and
(3) the Subordinate Prepayment Percentage of all amounts
described in clause (f) of the definition of "Principal Payment
Amount" for that Payment Date;
provided, however, that if a Bankruptcy Loss that is an Excess Loss is sustained
with respect to any Mortgage Loan that is not a Liquidated Mortgage Loan
Payment, such Subordinate Principal Payment Amount shall be reduced on such
Payment Date by the Subordinate Percentage of the principal portion of such
Bankruptcy Loss.
"SUBSEQUENT CUT-OFF DATE": Not applicable.
"SUBSEQUENT DELIVERY REQUIREMENTS": Not applicable.
"SUBSEQUENT MORTGAGE LOAN" Not applicable.
"SUBSEQUENT TRANSFER DATE": Not applicable.
"SUBSEQUENT TRANSFER DATE NOTICE": Not applicable.
"SUBSTITUTION ADJUSTMENT": The meaning ascribed to such term pursuant to
Section 8.04 hereof.
"SUCCESSOR SERVICER": A Person appointed by the Trustee who succeeds
either the Trustee or a Servicer, pursuant to the applicable provisions of the
related Servicing Agreement.
"SURETY": Ambac Assurance Corporation (formerly known as AMBAC Indemnity
Corporation), or any successor thereto, as issuer of the Limited Purpose Surety
Bond.
30
"TRUST ESTATE": All money, instruments and other property subject or
intended to be subject to the lien of this Indenture for the benefit of the
Bondholders as of any particular time (including, without limitation, all
property and interests Granted to the Trustee), including all proceeds thereof.
"TRUST INDENTURE ACT" OR "TIA": The Trust Indenture Act of 1939, as
amended, as in force at the Closing Date, unless otherwise specifically
provided.
"TRUSTEE": Deutsche Bank National Trust Company, a national association
organized and existing under the laws of the United States and any Person
succeeding as Trustee hereunder pursuant to Section 6.12 or any other applicable
provision hereof.
"TRUSTEE FEE": As to any Payment Date, an amount equal to one-twelfth of
the Trustee Fee Rate multiplied by the Pool Stated Principal Balance with
respect to such Payment Date.
"TRUSTEE FEE RATE": With respect to each Mortgage Loan, 0.0040% per
annum.
"TRUSTEE MORTGAGE FILE": With respect to each Mortgage Loan, the
Mortgage Documents to be retained in the custody and possession of the Trustee
or the Custodian on behalf of the Trustee.
"TWO TIMES TEST": As to any Payment Date, (i) the Aggregate Subordinate
Percentage is at least two times the Aggregate Subordinate Percentage as of the
Closing Date; (ii) the aggregate of the Stated Principal Balances of all
Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in REO and
foreclosure) (averaged over the preceding six-month period), as a percentage of
the aggregate of the Class Principal Amount of the Subordinate Bonds on such
Payment Date, does not equal or exceed 50%; and (iii) cumulative Realized Losses
do not exceed 30% of the Original Subordinate Principal Balance.
"UNPAID BASIS RISK SHORTFALL": With respect to any Payment Date and any
Class of LIBOR Bonds, the sum of the Basis Risk Shortfalls for all prior Payment
Dates, together with interest thereon at the applicable Bond Interest Rate,
determined without regard to clause (ii) of the definition thereof, to the
extent that such amounts have not been paid on prior Payment Dates.
"UPPER-TIER REMIC": As described in Section Article XI.
ARTICLE II
THE BONDS
Section 2.01. FORMS GENERALLY.
The Bonds and the Trustee's certificate of authentication shall be in
substantially the form required by this Article II, with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture and may have such letters,
31
numbers or other marks of identification and such legends or endorsements placed
thereon as may be required to comply with the rules of any securities exchange
on which the Bonds may be listed, or as may, consistently herewith, be
determined by the officers executing such Bonds, as evidenced by their execution
thereof. Any portion of the text of any Bond may be set forth on the reverse
thereof with an appropriate reference on the face of the Bond.
The Definitive Bonds may be produced in any manner determined by the
officers executing such Bonds, as evidenced by their execution thereof;
provided, however, that in the event the Bonds are listed on any securities
exchange, the Bonds shall be produced in accordance with the rules of any
securities exchange on which the Bonds may be listed.
Section 2.02. FORMS OF BONDS AND CERTIFICATE OF AUTHENTICATION.
(a)The forms of the Bonds are set forth in Exhibits II-VI.
(b)The form of the Trustee's certificate of authentication is as
follows:
(c)"This is one of the Bonds referred to in the within mentioned
Indenture.
, as Trustee
------------------------------
By:
----------------------------------------
Authorized Signatory"
(d)The form of assignment is as follows:
"FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto _________________________________________________________
(Please insert Social Security or other Identifying Number of Assignee)
_________________ the within Bond of Sequoia Mortgage Trust 6, and does
hereby irrevocably constitute and appoint __________ Attorney to
transfer such Bond on the books of the within named trust, with full
power of substitution in the premises.
Dated:
----------------------------- -----------------------------
Notice: The signature to this
assignment must correspond
with the name as written upon
the face of this Bond in
every particular without
alteration or enlargement or
any change whatever. The
signature must be guaranteed
by a member of a signature
guaranty medallion program.
Notarized or witnessed
signatures are not
acceptable."
32
Section 2.03. BONDS ISSUABLE IN CLASSES; PROVISIONS WITH RESPECT TO
PRINCIPAL AND INTEREST PAYMENTS.
(a) The Bonds shall be designated generally as the Sequoia Mortgage
Trust 6, Collateralized Mortgage Bonds of the Issuer. Each Bond shall bear upon
the face thereof the designation so selected for the Class to which it belongs.
The Bonds shall bear the following class designations and shall be
issued in the following initial Class Principal Amounts:
Class A $496,378,000.00
Class X 100.00
Class A-R 100.00
Class B-1 5,915,000.00
Class B-2 5,143,000.00
Class B-3 2,315,000.00
Class B-4 1,534,000.00
Class B-5 1,028,000.00
Class B-6 2,068,996.00
All of the Bonds shall be issued in the appropriate forms attached as
Exhibits hereto with such additions and completions as are appropriate for each
such Class.
The final installments of principal of the Classes of Bonds shall have
the related Stated Maturity. The principal of each Bond shall be payable in
installments ending no later than the Stated Maturity of the final installment
of the principal thereof unless the unpaid principal of such Bond becomes due
and payable at an earlier date by declaration of acceleration or call for
redemption or otherwise. All payments made with respect to any Bond shall be
applied first to the interest then due and payable on such Bond and then to the
principal thereof.
(b) On each Payment Date, the Trustee shall withdraw the Available
Payment Amount from the Distribution Account and shall apply
such funds to payments on the Bonds in the following order of priority and, in
each case, to the extent of funds remaining:
(1) Pro rata, to the payment of the Interest Payment Amount
and any outstanding Interest Shortfalls on each Class of Senior Bonds;
provided, however, that on each Payment Date, the Interest Payment
Amount that would otherwise be payable to the Class X Bonds shall, to
the extent of the Basis Risk Deposit for such date, be deposited in the
Basis Risk Reserve Fund;
(2) Sequentially, to the Class A-R, Class X and Class A
Bonds, in that order, the Senior Principal Payment Amount until their
respective Class Principal Amounts have been reduced to zero;
(3) To the Class B-1 Bonds, the payment of its applicable
Interest Payment Amount and any outstanding Interest Shortfalls;
33
(4) To the Class B-1 Bonds, such Class's Allocable Share of
the Subordinate Principal Payment Amount, until its Class Principal
Amount has been reduced to zero;
(5) To the Class B-2 Bonds, the payment of its applicable
Interest Payment Amount and any outstanding Interest Shortfalls;
(6) To the Class B-2 Bonds, such Class's Allocable Share of
the Subordinate Principal Payment Amount, until its Class Principal
Amount has been reduced to zero;
(7) To the Class B-3 Bonds, the payment of its applicable
Interest Payment Amount and any outstanding Interest Shortfalls;
(8) To the Class B-3 Bonds, such Class's Allocable Share of
the Subordinate Principal Payment Amount, until its Class Principal
Amount has been reduced to zero;
(9) From the Basis Risk Reserve Fund, to payment to the
Class A, Class B-1, Class B-2 and Class B-3 Bonds, sequentially in that
order, of any related Basis Risk Shortfall or Unpaid Basis Risk
Shortfall for such date;
(10) To the Class B-4 Bonds, the payment of its applicable
Interest Payment Amount and any outstanding Interest Shortfalls;
(11) To the Class B-4 Bonds, such Class's Allocable Share of
the Subordinate Principal Payment Amount, until its Class Principal
Amount has been reduced to zero;
(12) To the Class B-5 Bonds, the payment of its applicable
Interest Payment Amount and any outstanding Interest Shortfalls;
(13) To the Class B-5 Bonds, such Class's Allocable Share of
the Subordinate Principal Payment Amount, until its Class Principal
Amount has been reduced to zero;
(14) To the Class B-6 Bonds, the payment of its applicable
Interest Payment Amount and any outstanding Interest Shortfalls;
(15) To the Class B-6 Bonds, such Class's Allocable Share of
the Subordinate Principal Payment Amount, until its Class Principal
Amount has been reduced to zero; and
(16) To the Class A-R Bond, any remaining amount of the
Available Payment Amount.
(c) All payments on the Bonds of any Class shall be made pro rata
among all Bonds of such Class.
(d) Notwithstanding the priority and allocation set forth in Section
2.03(b) above, if with respect to any Class of Subordinate Bonds on any Payment
Date the sum of the related Class Subordination Percentages of such Class and of
all other Classes of Subordinate Bonds which have a higher numerical Class
designation than such Class is less than the Original Applicable
34
Credit Support Percentage for such Class, no distribution of Principal
Prepayments shall be made to any such Classes and the amount of such Principal
Prepayment otherwise distributable to such Classes shall be distributed to any
Classes of Subordinate Bonds having lower numerical Class designations than such
Class, pro rata, based on the Class Principal Amounts of the respective Classes
immediately prior to such Payment Date and shall be distributed in the
sequential order provided in Section 2.03(b) above.
Section 2.04. DENOMINATIONS.
Each Class of Book Entry Bonds shall be evidenced initially by a single
Bond representing the entire aggregate Class Principal Amount of such Class of
Bonds as of the Closing Date, beneficial ownership of which may be held in
denominations of $25,000 (in the case of the LIBOR Bonds) and increments of
$1,000 in excess thereof. All of the Book Entry Bonds shall be initially
registered on the Bond Register in the name of Cede & Co., the nominee of the
Depository, and no Beneficial Owner shall receive a Definitive Bond representing
such Beneficial Owner's interest in the Book Entry Bonds, except in the event of
Book Entry Termination. The minimum beneficial ownership which may be held for a
Class A-R or Class X Bond shall be 100% of the amount specified on the face
thereof. The Class B-4, Class B-5 and Class B-6 Bonds shall be issued in minimum
denominations of $250,000 and increments of $1,000 in excess thereof.
Section 2.05. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Bonds shall be executed by an Authorized Officer of the Issuer. The
signature of such officer on the Bonds may be manual or facsimile.
Bonds bearing the manual or facsimile signature of an individual who was
at any time an Authorized Officer shall bind the Issuer, notwithstanding that
such individual has ceased to hold such office prior to the authentication and
delivery of such Bonds or did not hold such office at the date of such Bonds.
At any time and from time to time after the execution and delivery of
this Indenture, the Issuer may deliver Bonds executed on behalf of the Issuer to
the Trustee for authentication; and the Trustee shall authenticate and deliver
such Bonds as in this Indenture provided and not otherwise.
Each Bond authenticated on the Closing Date shall be dated the Closing
Date. All other Bonds which are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication.
No Bond shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Bond a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or by any Authenticating Agent by the manual signature
of one of its authorized officers or employees, and such certificate upon any
Bond shall be conclusive evidence, and the only evidence, that such Bond has
been duly authenticated and delivered hereunder.
35
Section 2.06. TEMPORARY BONDS.
So long as the Book Entry Bonds are held by the Depository for the
Participants in book-entry form, they may be typewritten or in any other form
acceptable to the Issuer, the Trustee and the Depository. At any time during
which the Book Entry Bonds are not held by the Depository for the Participants
in book-entry form, the Definitive Bonds shall be lithographed or printed with
steel engraved borders.
Pending the preparation of Definitive Bonds, the Issuer may execute, and
upon Issuer Order the Trustee shall authenticate and deliver, temporary Bonds
which are printed, lithographed, typewritten, mimeographed or otherwise
produced, in any authorized denomination, substantially of the tenor of the
definitive Bonds in lieu of which they may be so issued and with such variations
as the officers executing such Bonds may determine, as evidenced by their
execution of such Bonds.
If temporary Bonds are issued, the Issuer shall cause definitive Bonds
to be prepared without unreasonable delay. After the preparation of definitive
Bonds, the temporary Bonds shall be exchangeable for definitive Bonds upon
surrender of the temporary Bonds at the office or agency of the Issuer to be
maintained as provided in Section 3.02, without charge to the Holder. Upon
surrender or cancellation of any one or more temporary Bonds, the Issuer shall
execute and the Trustee shall authenticate and deliver and exchange therefor a
like principal amount of definitive Bonds of the same Class and of authorized
denominations. Until so exchanged, the temporary Bonds shall in all respects be
entitled to the same benefits under this Indenture as Definitive Bonds of the
same Class.
Section 2.07. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept a register (the "Bond
Register") in which, subject to such reasonable regulations as it may prescribe,
the Issuer shall provide for the registration of Bonds and the registration of
transfers of Bonds. The Trustee is hereby initially appointed "Bond Registrar"
for the purpose of registering Bonds and transfers of Bonds as herein provided.
Upon any resignation of any Bond Registrar appointed by the Issuer, the Issuer
shall promptly appoint a successor or, in the absence of such appointment, shall
assume the duties of Bond Registrar.
(b) At any time the Trustee is not also the Bond Registrar, the
Trustee shall be a co-Bond Registrar. The Issuer shall cause each co-Bond
Registrar to furnish the Bond Registrar, promptly after each authentication of a
Bond by it, appropriate information with respect thereto for entry by the Bond
Registrar into the Bond Register. If the Trustee shall at any time not be
authorized to keep and maintain the Bond Register, the Trustee shall have the
right to inspect such Bond Register at all reasonable times and to rely
conclusively upon a certificate of the Person in charge of the Bond Register as
to the names and addresses of the Holders of the Bonds and the principal amounts
and numbers of such Bonds so held.
(c) Upon surrender for registration of transfer of any Bond at the
office or agency of the Issuer to be maintained as provided in Section 3.02, the
Issuer shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or
36
more new Bonds of any authorized denominations and of a like aggregate principal
amount and Class.
(d) At the option of the Holder, Bonds may be exchanged for other
Bonds of any authorized denominations, and of a like aggregate initial principal
amount and Class, upon surrender of the Bonds to be exchanged at such office or
agency. Whenever any Bonds are so surrendered for exchange, the Issuer shall
execute, and the Trustee shall authenticate and deliver, the Bonds which the
Bondholder making the exchange is entitled to receive.
(e) All Bonds issued upon any registration of transfer or exchange
of Bonds shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Bonds surrendered
upon such registration of transfer or exchange.
(f) Every Bond presented or surrendered for registration of transfer
or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Trustee duly executed by the Holder thereof
or his attorney duly authorized in writing.
(g) No service charge shall be made for any registration of transfer
or exchange of Bonds, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge as may be imposed in connection with
any registration of transfer or exchange of Bonds, other than exchanges pursuant
to Section 2.08 not involving any transfer.
(h) No transfer of a Private Bond shall be made unless such transfer
is made pursuant to an effective registration statement or in accordance with an
exemption from the requirements under the Securities Act of 1933, as amended
(the "Act"). If such a transfer is to be made in reliance upon an exemption from
the Act, (i) the Trustee shall, if not otherwise directed by the Depositor,
require a written Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee that such transfer may be made pursuant to an
exemption, describing the applicable exemption and the basis therefor, from the
Act or is being made pursuant to the Act, which Opinion of Counsel shall not be
an expense of the Trustee, the Depositor or the Servicers, and (ii) the Trustee
shall require the transferee to execute a certification, substantially in the
form of Exhibit VII hereto, acceptable to and in form and substance satisfactory
to the Trustee setting forth the facts surrounding such transfer; provided that
such Opinion of Counsel shall not be required in the case of transfers by or to
the Depositor, Redwood Trust, Inc., RWT Holdings or any of their wholly-owned
subsidiaries. Such Opinion of Counsel and certification shall not be an expense
of the Trustee, the Depositor or the Servicers. The Trustee, the Servicers and
the Depositor may, without the consent of any Bondholder, add provisions (which
shall include a form of certificate to be attached hereto as an exhibit that
must be delivered by the proposed transferee) to this Section 2.07(h) to permit
transfers pursuant to Rule 144A of the Securities and Exchange Commission, in
which case transfers pursuant to such provisions shall not require an Opinion of
Counsel.
(i) No transfer (exclusive of any transfer to a Depository or a
securitization trustee) of an ERISA Restricted Bond shall be made unless the
Trustee shall have received either (i) a representation letter (substantially in
the form attached hereto as Exhibit IX) from the transferee of such Bond,
acceptable to and in form and substance satisfactory to the Trustee, to the
effect that such transferee is not an employee benefit plan or other retirement
plan or arrangement
37
subject to Section 406 of ERISA or Section 4975 of the Code, nor a Person acting
on behalf of any such plan or arrangement or acquiring such Bond with funds of
such a plan or arrangement (including without limitation any insurance company
using funds that may constitute "plan assets"), which representation letter
shall not be an expense of the Trustee, the Depositor or the Servicers, or (ii)
in the case of any such Bond presented for registration in the name of an
employee benefit plan or other retirement plan or arrangement subject to ERISA
or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a trustee of any such plan or arrangement, an Opinion of Counsel
satisfactory to the Trustee to the effect that the purchase or holding of such
Bond is permissible under applicable law, shall not constitute or result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code and
shall not subject the Trustee, the Depositor or the Servicers to any obligation
in addition to those undertaken in this Indenture, which Opinion of Counsel
shall not be an expense of the Trustee, the Depositor or the Servicers.
(j) Notwithstanding anything to the contrary contained herein,
unless and until the Trustee shall have received an Opinion of Counsel that is
Independent, satisfactory in form and substance to the Trustee, to the effect
that the absence of the transfer restrictions contained in this Section 2.07(j)
would not result in the imposition of federal income tax upon the Trust Estate
or cause the Trust Estate to fail to qualify as two REMICs, no transfer, sale or
other disposition of the Class A-R Bond (including a beneficial interest
therein) may be made without the express written consent of the Trustee.
(k) As a condition to the granting of the consent referred to in
Section 2.07(j), prior to the transfer, sale or other disposition of the Class
A-R Bond, the Trustee shall require that the proposed transferee deliver to the
Trustee an affidavit stating that as of the date of such transfer (i) such
transferee is not and has no intention of becoming a "Disqualified Organization"
within the meaning of Section 860E(e)(5) of the Code, (ii) such transferee is
not acquiring such A-R Bond as an agent, broker, nominee, or middleman for a
Disqualified Organization and (iii) such transferee is not a Non-U.S. Person. A
Responsible Officer of the Trustee shall not grant the consent referred to in
Section 2.07(j) if it has actual knowledge that any statement made in the
affidavit issued pursuant to the preceding sentence is not true. Notwithstanding
any transfer, sale or other disposition of such A-R Bond to a Disqualified
Organization or Non-U.S. Person, such transfer, sale or other disposition shall
be deemed to be of no legal force or effect whatsoever and such Disqualified
Organization or Non-U.S. Person shall not be deemed to be a Holder of such Class
A-R Bond for any purpose hereunder, including, but not limited to, the receipt
of distributions on such A-R Bond. If any purported transfer shall be in
violation of the provisions of Section 2.07(j), then the prior Holder of such
A-R Bonds shall, upon discovery that the transfer of such A-R Bond was not in
fact permitted in Section 2.07(j), be restored to all rights as a Holder thereof
retroactive to the date of the purported transfer of such A-R Bond. The Trustee,
the Depositor and the Servicers shall be under no liability to any Person for
any registration or transfer of an A-R Bond that is not permitted by Section
2.07(j) or for the Payment Agent making payments due on any such A-R Bond to the
purported Holder thereof or taking any other action with respect to such
purported Holder under the provisions of this Indenture so long as the transfer
was registered under the written certification of the Trustee as described in
Section 2.07(j). The prior Holder shall be entitled to recover from any
purported Holder of any such A-R Bond that was in fact not a permitted
transferee under Section 2.07(j) at the time it became a
38
Holder all payments made on such Class A-R Bond; provided that neither the
Depositor, the Servicers nor the Trustee shall be responsible for such recovery
if they otherwise made a good faith effort to comply with this Section 2.07(k).
Each such Class, by the acceptance of a Class, shall be deemed for all purposes
to have consented to the provisions of Section 2.07(j) and to any amendment of
this Indenture deemed necessary by counsel of the Trustee, as evidenced by an
Opinion of Counsel, to ensure that either such Class A-R Bond is not transferred
to a Disqualified Organization or Non-U.S. Person and that any transfer of such
Class A-R Bond shall not cause the imposition of a tax upon the Trust Estate or
cause the Trust Estate to fail to qualify as two REMICs. The restrictions on
transfer of either such A-R Bond shall cease to apply and be void upon receipt
by the Trustee of the Opinion of Counsel as described in Section 2.07(j) or
shall be modified as indicated in such Opinion of Counsel. If any Person that is
not permitted to acquire any beneficial interest in a Class under this Section
2.07(k) acquires any beneficial interest in a Class in violation of the
restrictions in this Section 2.07(k), then the Trustee, based on information
provided to it by the Servicers and/or the Depositor, shall provide to the
Internal Revenue Service, and to the persons specified in Section 860E(e)(3) and
(6) of the Code, information needed to compute the tax imposed under Section
860E(e)(1) of the Code on transfers of residual interests to disqualified
organizations. The Trustee shall be entitled to be reimbursed by such Person for
the cost of providing such information.
Section 2.08. MUTILATED, DESTROYED, LOST OR STOLEN BONDS.
If (1) any mutilated Bond is surrendered to the Trustee or the Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond and (2) there is delivered to the Trustee such security or indemnity as may
be required by the Trustee to save the Issuer and the Trustee harmless, then, in
the absence of notice to the Issuer or the Trustee that such Bond has been
acquired by a bona fide purchaser, the Issuer shall execute and upon its written
request the Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Bond, a new Bond or Bonds of
the same tenor, aggregate initial principal amount and Class bearing a number
not contemporaneously outstanding. If, after the delivery of such new Bond, a
bona fide purchaser of the original Bond in lieu of which such new Bond was
issued presents for payment such original Bond, the Issuer and the Trustee shall
be entitled to recover such new Bond from the person to whom it was delivered or
any person taking therefrom, 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 expenses incurred by the Issuer or the Trustee in
connection therewith. If any such mutilated, destroyed, lost or stolen Bond
shall have become or shall be about to become due and payable, or shall have
become subject to redemption in full, instead of issuing a new Bond, the Issuer
may pay such Bond without surrender thereof, except that any mutilated Bond
shall be surrendered.
Upon the issuance of any new Bond under this Section, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other reasonable expenses
(including the fees and expenses of the Trustee) connected therewith.
Every new Bond issued pursuant to this Section in lieu of any destroyed, lost or
stolen Bond shall constitute an original additional contractual obligation of
the Issuer, whether or not
39
the destroyed, lost or stolen Bond 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 Bonds duly issued hereunder.
The provisions of this Section 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 Bonds.
Section 2.09. PAYMENTS OF PRINCIPAL AND INTEREST.
(a) Each payment of principal of and interest on a Book Entry Bond
shall be paid to the Depository, which shall credit the amount of such payments
to the accounts of its Depository Participants in accordance with its normal
procedures. Each Depository Participant shall be responsible for disbursing such
payments to the Beneficial Owners of the Book Entry Bonds 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 Beneficial Owners of the Book Entry
Bonds that it represents. All such credits and disbursements are to be made by
the Depository and the Depository Participants in accordance with the provisions
of the Bonds. Neither the Trustee, the Bond Registrar nor the Issuer shall have
any responsibility for such credits and disbursements.
Each payment of principal of and interest on a Definitive Bond shall be
paid to the Person in whose name such Bond (or one or more Predecessor Bonds) is
registered at the close of business on the Record Date or Redemption Record
Date, for such Payment Date or Redemption Date, by check mailed to such Person's
address as it appears in the Bond Register on such Record Date or the Redemption
Record Date, except for the final installment of principal payable with respect
to such Bond, which shall be payable as provided in Section 2.09(b).
All payments of principal of and interest on the Bonds shall be made
only from the Trust Estate and any other assets of the Issuer, and each Holder
of the Bonds, by its acceptance of the Bonds, agrees that it shall have recourse
solely against such Trust Estate and such other assets of the Issuer and that
neither the Owner Trustee in its individual capacity, the Owner nor any of their
respective partners, beneficiaries, agents, officers, directors, employees or
successors or assigns shall be personally liable for any amounts payable, or
performance due, under the Bonds or this Indenture.
(b) All reductions in the principal amount of a Bond (or one or more
Predecessor Bonds) effected by payments of installments of principal made on any
Payment Date or Redemption Date shall be binding upon all Holders of such Bond
and any Bond issued upon transfer thereof or in exchange therefor or in lieu
thereof. The final installment of principal of each Bond (including the
Redemption Price of any Bond called for optional redemption, if such optional
redemption shall result in payment of the entire unpaid principal amount of any
such Bond) shall be payable only upon presentation and surrender thereof on or
after the Payment Date or Redemption Date therefor at the office or agency of
the Issuer maintained by it for such purpose in the Borough of Manhattan, the
City of New York, State of New York, pursuant to Section 3.02. Whenever the
Trustee expects that the entire remaining unpaid principal amount of any Bond
shall become due and payable on the next Payment Date, it shall mail or cause to
be mailed
40
to the Holder of each Bond as of the close of the business on such otherwise
applicable Record Date a notice to the effect that:
(i) the Trustee expects that funds sufficient to pay such
final installment shall be available in the Distribution Account on such
Payment Date; and
(ii) if such funds are available, such final installment
shall be payable on such Payment Date, but only upon presentation and
surrender of such Bond at the office or agency of the Issuer maintained
for such purpose pursuant to Section 3.02 (the address of which shall be
set forth in such notice).
Notices in connection with optional redemptions of Bonds shall be mailed
to Holders in accordance with Section 10.02.
Section 2.10. PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any Bond, the
Issuer, the Trustee, any Agent and any other agent of the Issuer or the Trustee
shall treat the Person in whose name any Bond is registered as the owner of such
Bond (a) on the applicable Record Date or Redemption Record Date for the purpose
of receiving payments of the principal of, and interest on, such Bond and (b) on
any other date for all other purposes whatsoever, whether or not such Bond is
overdue, and neither the Issuer, the Trustee, any Agent nor any other agent of
the Issuer or the Trustee shall be affected by notice to the contrary.
Section 2.11. CANCELLATION.
All Bonds surrendered for payment, registration of transfer, exchange or
redemption shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee and shall be promptly cancelled by it. The Issuer may
at any time deliver to the Trustee for cancellation any Bond previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Bonds so delivered shall be promptly cancelled by the
Trustee. No Bonds shall be authenticated in lieu of or in exchange for any Bonds
cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Bonds held by the Trustee shall be held by the Trustee
in accordance with its standard retention policy, unless the Issuer shall direct
by an Issuer Order that they be destroyed or returned to it.
Section 2.12. AUTHENTICATION AND DELIVERY OF BONDS.
The Bonds may be executed by the Issuer and delivered to the Trustee for
authentication, and thereupon the same shall be authenticated and delivered by
the Trustee, upon Issuer Request and upon receipt by the Trustee of the
following:
(a) an Issuer Order authorizing the execution, authentication and
delivery of the Bonds and specifying the Classes, the Stated Maturity of the
final installment of principal, the principal amount and the Bond Interest Rate,
of each Class of such Bonds to be authenticated and delivered;
41
(b) an Issuer Order authorizing the execution and delivery of this
Indenture;
(c) One or more Opinions of Counsel addressed to the Trustee,
complying with the requirements of Section 12.01;
(d) an Officers' Certificate complying with the requirements of
Section 12.01 and stating that:
(i) the Issuer is not in Default under this Indenture and
the issuance of the Bonds shall not result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, the
Deposit Trust Agreement or any indenture, mortgage, deed of trust or
other agreement or instrument to which the Issuer is a party or by which
it is bound, or any order of any court or administrative agency entered
in any proceeding to which the Issuer is a party or by which it may be
bound or to which it may be subject, and that all conditions precedent
provided in this Indenture relating to the authentication and delivery
of the Bonds have been complied with;
(ii) the Issuer is the owner of each Initial Mortgage Loan,
free and clear of any lien, security interest or charge, has not
assigned any interest or participation in any such Mortgage Loan (or, if
any such interest or participation has been assigned, it has been
released) and has the right to Grant each such Initial Mortgage Loan to
the Trustee;
(iii) the information set forth in the Mortgage Loan Schedule
attached as Schedule A to this Indenture is true and correct in all
material respects as of the Closing Date;
(iv) the Issuer has Granted to the Trustee all of its right,
title and interest in each Mortgage Loan;
(v) as of the Closing Date, no lien in favor of the United
States described in Section 6321 of the Code, or lien in favor of the
Pension Benefit Guaranty Corporation described in Section 4068(a) of the
Employee Retirement Income Security Act of 1974, as amended, has been
filed as described in subsections 6323(f) and 6323(g) of the Code upon
any property belonging to the Issuer; and
(vi) attached thereto is a true and correct copy of letters
signed by the Rating Agencies confirming that the Bonds have been
assigned the Required Ratings or higher ratings;
(e) A trust receipt issued by the Custodian evidencing the receipt
and possession by the Custodian of the Mortgage Documents for the Mortgage
Loans, subject to the exceptions therein noted;
(f) An executed counterpart of the Purchase Agreements, the
Servicing Agreements and the Mortgage Loan Purchase and Sale Agreement; and
42
(g) A certificate of one or more Independent Persons, whose regular
business activity includes valuing securities and mortgage loans similar to the
Initial Mortgage Loans, of the fair value of the Initial Mortgage Loans.
Section 2.13. MATTERS RELATING TO BOOK ENTRY BONDS.
(a) If the Bonds are listed on any stock exchange at any time after
the Closing Date, the Issuer shall, if required as a condition to such listing,
prepare and deliver to the Trustee Bonds in substantially the same form as the
Bonds issued on the Closing Date, but with such other additional features and
such modifications, if any, as shall be necessary or appropriate in order to
comply with the requirements of such stock exchange for the listing of the Bonds
on such exchange. Bonds in the form issued on the Closing Date shall thereafter
be exchangeable for Bonds in such revised form to the same extent as temporary
Bonds are exchangeable for Definitive Bonds pursuant to Section 2.06.
(b) Each Class of Book Entry Bonds shall be issued in the form of a
single typewritten bond certificate (each, a "DTC Certificate") to be delivered
to the Depository by the Issuer substantially in the respective forms for each
such Class attached as Exhibits hereto. The DTC Certificate for each such Class
of Book Entry Bonds shall be initially registered on the Bond Register in the
name of the nominee of such Depository and no Beneficial Owner shall receive a
certificate representing its interests in any Class of Book Entry Bonds except
in the event that the Trustee issues Definitive Bonds, as provided in Section
2.14. Pursuant to the Letter Agreement, while each Class of the Book Entry Bonds
remains outstanding and such Depository remains the Holder, it shall agree to
make book-entry transfers among the Depository Participants and receive and
transmit payments of principal and interest on the Book Entry Bonds until and
unless the Trustee authenticates and delivers Definitive Bonds to the Beneficial
Owners of the Book Entry Bonds or their nominees, as described in Section 2.14.
(c) Prior to Book Entry Termination, each Class of Book Entry Bonds
shall remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Book Entry Bonds may not be transferred by the
Trustee or the Bond Registrar except to another Depository; (ii) the Depository
shall maintain book-entry records with respect to the Beneficial Owners and with
respect to ownership and transfers of such Book Entry Bonds; (iii) ownership and
transfers of registration of the Book Entry Bonds on the books of the Depository
shall be governed by applicable rules established by the Depository; (iv) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants; (v) the Trustee shall deal with the Depository,
Depository Participants and interest participating firms as representatives of
the Beneficial Owners of the Book Entry Bonds for purposes of exercising the
rights of holders under the Indenture, and requests and directions for and votes
of such representatives shall not be deemed to be inconsistent if they are made
with respect to different Beneficial Owners; and (vi) the Trustee may
conclusively rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants and
furnished by the Depository Participants with respect to indirect participating
firms and Persons shown on the books of such indirect participating firms as
direct or indirect Beneficial Owners.
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All transfers by Beneficial Owners of Book Entry Bonds shall be made in
accordance with the procedures established by the Depository Participant or
brokerage firm representing such Beneficial Owner. Each Depository Participant
shall only transfer Book Entry Bonds of Beneficial Owners it represents or of
brokerage firms for which it acts as agent in accordance with the Depository's
normal procedures.
Section 2.14. TERMINATION OF BOOK ENTRY SYSTEM.
(a) The book entry system through the Depository with respect to any
Class of Book Entry Bonds may be terminated upon the happening of any of the
following:
(i) The Depository or the Issuer advises the Trustee in
writing that the Depository is no longer willing or able to properly
discharge its responsibilities as Depository and the Issuer is unable to
locate a qualified successor clearing agency satisfactory to the Trustee
and the Issuer;
(ii) The Issuer at its option advises the Trustee in writing
that it elects to terminate the book entry system through the
Depository; or
(iii) After the occurrence of an Event of Default, the
Beneficial Owners of a majority in aggregate Class Principal Amount of
the Book Entry Bonds together advise the Trustee and the Depository
through the Depository Participants in writing that the continuation of
a book entry system through the Depository is no longer in the best
interests of the Beneficial Owners.
(b) Upon the occurrence of any event described in subsection (a)
above, the Trustee shall notify the Depository of the occurrence of any such
event and of the availability of Definitive Bond certificates to Beneficial
Owners requesting the same, in an aggregate Class Principal Amount representing
the interest of each, making such adjustments and allowances as it may find
necessary or appropriate as to accrued interest, if any, and previous calls for
redemption. Definitive Bond certificates shall be issued only upon surrender to
the Trustee of the Book Entry Bond by the Depository, accompanied by
registration instructions for the Definitive Bond certificates. Neither the
Issuer nor the Trustee shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon issuance of the Definitive Bond certificates, all
references herein to obligations imposed upon or to be performed by the
Depository shall cease to be applicable and the provisions relating to
Definitive Bonds shall be applicable.
Section 2.15. ALLOCATION OF REALIZED LOSSES.
(a) On or prior to each Payment Date, the Trustee shall aggregate
the information provided by each Servicer with respect to the total amount of
Realized Losses, including Excess Losses, with respect to the Mortgage Loans for
the related Payment Date.
(b) On each Payment Date, Realized Losses, Bankruptcy Losses, Fraud
Losses and Special Hazard Losses with respect to such Payment Date shall be
allocated as follows:
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(1) Realized Losses, Bankruptcy Losses, Fraud Losses and
Special Hazard Losses (other than Excess Losses) shall be allocated:
first, to the Subordinate Bonds in reverse order of their
respective numerical Class designations (beginning with the Class of
Subordinate Bonds with the highest numerical Class designation) until
the Class Principal Amount of each such Class is reduced to zero; and
second, to the Senior Bonds, pro rata, until the Class Principal
Amount of each Class of Senior Bonds is reduced to zero;
(2) any Excess Losses on the Mortgage Loans shall be
allocated to the Classes of Senior Bonds and Subordinate Bond, pro rata,
on the basis of their respective Class Principal Amounts.
(c) The Class Principal Amounts of the Class of Subordinate Bonds
then outstanding with the highest numerical Class designation shall be reduced
on each Payment Date by the amount, if any, by which the aggregate of the Class
Principal Amounts of all outstanding Classes of Bonds (after giving effect to
the distribution of principal and the allocation of Realized Losses, Bankruptcy
Losses, Fraud Losses and Special Hazard Losses and Excess Losses on such Payment
Date) exceeds the aggregate of the Stated Principal Balances of all the Mortgage
Loans for the following Payment Date.
Section 2.16. REPORTS TO BONDHOLDERS
On each Payment Date, the Trustee shall make available to each
Bondholder and shall forward to the Rating Agencies a statement (based on
information received from each Servicer) generally setting forth, among other
things:
- the amount of the payments, separately identified, with respect
to each Class of Bonds;
- with respect to each Class of Bonds, the amount of the payments
set forth in the first clause above allocable to principal,
separately identifying the aggregate amount of any principal
prepayments or other unscheduled recoveries of principal
included in that amount;
- with respect to each Class of Bonds, the amount of the
distributions set forth in the first clause above allocable to
interest;
- the amount of any unpaid Interest Shortfall, Basis Risk
Shortfall or Unpaid Basis Risk Shortfall (if applicable) with
respect to each Class of Bonds;
- the Class Principal Amount of each Class of Bonds after giving
effect to the distribution of principal on that Payment Date;
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- the Pool Stated Principal Balance and the Net WAC of the
Mortgage Loans at the end of the related Prepayment Period;
- the aggregate principal balance of the Mortgage Loans whose
Mortgage Rates adjust on the basis of the One-Month LIBOR index
or the Six-Month LIBOR index at the end of the related
Prepayment Period;
- the Pro Rata Senior Percentage, Senior Percentage and
Subordinate Percentage for the following Payment Date;
- the Senior Prepayment Percentage and Subordinate Prepayment
Percentage for the following Payment Date;
- the amount of the Servicing Fee paid to or retained by each
Servicer;
- the amount of Advances for the related Due Period;
- the number and aggregate principal balance of the Mortgage Loans
that were (A) Delinquent (exclusive of Mortgage Loans in
foreclosure) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or
more days, (B) in foreclosure and delinquent (1) 30 to 59 days,
(2) 60 to 89 days and (3) 90 or more days and (C) in bankruptcy
as of the close of business on the last day of the calendar
month preceding that Payment Date;
- for any Mortgage Loan as to which the related mortgaged property
was an REO property during the preceding calendar month, the
loan number, the principal balance of that Mortgage Loan as of
the close of business on the last day of the related Due Period
and the date of acquisition of the REO property;
- the total number and principal balance of any REO properties as
of the close of business on the last day of the preceding Due
Period;
- the aggregate amount of Realized Losses incurred during the
preceding calendar month;
- the cumulative amount of Realized Losses incurred since the
Closing Date;
- the aggregate amount of Special Hazard Losses, Bankruptcy Losses
and Fraud Losses incurred during the preceding calendar month;
- the cumulative amount of Special Hazard Losses, Bankruptcy
Losses and Fraud Losses incurred since the Closing Date;
- the Special Hazard Loss Coverage Amount, the Fraud Loss Coverage
Amount and the Bankruptcy Loss Coverage Amount, in each case as
of the related determination date;
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- the Realized Losses and Excess Losses, if any, allocated to each
class of Bonds on that Payment Date; and
- the Bond Interest Rate for each class of Bonds for that Payment
Date.
On each Payment Date, the Trustee shall post the foregoing report on its website
located at ▇▇▇▇://▇▇▇-▇▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇-▇▇▇▇.▇▇▇/▇▇▇▇.
Section 2.17. [RESERVED].
Section 2.18. BASIS RISK RESERVE FUND
(a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of the Holders of the LIBOR Bonds and Class X
Bonds, the Basis Risk Reserve Fund. The Basis Risk Reserve Fund shall be an
Eligible Account and shall not be included as an asset of any REMIC created
pursuant to this Indenture, and funds on deposit therein shall be held separate
and apart from, and shall not be commingled with, any other moneys, including,
without limitation, other moneys of the Trustee held pursuant to this Indenture.
(b) The Trustee shall make withdrawals from the Basis Risk Reserve
Fund to make distributions pursuant to Section 2.03(b)(9).
(c) Funds in the Basis Risk Reserve Fund shall be invested in
Eligible Investments. Any earnings on such amounts shall be distributed to the
Class X Bondholder. The Class X Bonds shall evidence ownership of the Basis Risk
Reserve Fund for federal income tax purposes and the Holder thereof shall direct
the Trustee, in writing, as to investment of amounts on deposit therein. The
Class X Bondholder shall be liable for any losses incurred on such investments.
In the absence of written instructions from the Class X Bondholder as to
investment of funds on deposit in the Basis Risk Reserve Fund, such funds shall
remain uninvested. Any amounts on deposit in the Basis Risk Reserve Fund in
excess of an amount equal to the greater of (i) the sum of the Basis Risk
Shortfalls and any Unpaid Basis Risk Shortfalls, and (ii) $10,000 on any Payment
Date shall be distributed to the Class X Bondholder on such Payment Date. For
all Federal income tax purposes, amounts transferred by the Upper Tier REMIC to
the Basis Risk Reserve Fund shall be treated as amounts distributed by the Upper
Tier REMIC to the Class X Bondholder.
(d) Upon termination of the Trust Estate any amounts remaining in
the Basis Risk Reserve Fund shall be distributed to the Class X Bondholder.
Section 2.19. [RESERVED].
Section 2.20. DETERMINATION OF LIBOR.
On each LIBOR Determination Date, the Trustee shall determine LIBOR
based on the "Interest Settlement Rate" for U.S. dollar deposits of one-month
maturity set by the BBA as of 11:00 a.m. (London time) on such LIBOR
Determination Date ("LIBOR").
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With respect to any LIBOR Determination Date, if the BBA's "Interest
Settlement Rate" does not appear on the Designated Telerate Page as of 11:00
a.m. (London time) on such date, or if the Designated Telerate Page is not
available on such date, the Trustee shall obtain such rate from either (i) the
Reuters Monitor Money Rates Service page "LIBOR01" or (ii) Bloomberg L.P. page
"BBAM." If such rate is not published for such LIBOR Determination Date, LIBOR
for such date shall be the most recently published Interest Settlement Rate. In
the event that the BBA no longer sets an Interest Settlement Rate, the Trustee
shall designate an alternative index that has performed, or that the Bond
Trustee expects to perform, in a manner substantially similar to the BBA's
Interest Settlement Rate. The Trustee shall select a particular index as the
alternative index only if it receives an Opinion of Counsel that the selection
of such index shall not cause any REMIC established hereunder to lose its
classification as a REMIC for federal income tax purposes.
The establishment of LIBOR on each LIBOR Determination Date by the
Trustee and the Trustee's calculation of the Bond Interest Rate applicable to
each Class of LIBOR Bonds for the related Accrual Period shall (in the absence
of manifest error) be final and binding.
ARTICLE III
COVENANTS
Section 3.01. PAYMENT OF BONDS.
The Issuer shall pay or cause to be duly and punctually paid the
principal of, and interest on, the Bonds in accordance with the terms of the
Bonds and this Indenture.
Section 3.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer shall maintain in the Borough of Manhattan, the City of New
York, the State of New York an office or agency where Bonds may be presented or
surrendered for payment or may be surrendered for registration of transfer or
exchange, and where notices and demands to or upon the Issuer in respect of the
Bonds and this Indenture may be served. The Issuer shall give prompt written
notice to the Trustee of the location and any change in the location, of such
office or agency. Until written notice of any change in the location of such
office or agency is delivered to the Trustee or if at any time the Issuer shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, Bonds may be so presented and surrendered, and
such notices and demands may be made or served, at the office of the Trustee's
agent located at DTC transfer agent services, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇
Entrance, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇ ▇▇▇▇▇, for such purposes.
The Issuer may also from time to time designate one or more other
offices or agencies (in or outside the City of New York) where the Bonds may be
presented or surrendered for any or all such purposes and may from time to time
rescind such designations; provided, however, that (i) no such designation or
rescission shall in any manner relieve the Issuer of its obligation to maintain
an office or agency in the Borough of Manhattan, the City of New York, the State
of New York, for the purposes set forth in the preceding paragraph, (ii)
presentations or surrenders of Bonds for payment may be made only in the City of
New York, the State of New York or at
48
the Corporate Trust Office of the Trustee and (iii) any designation of an office
or agency for payment of Bonds shall be subject to Section 3.03. The Issuer
shall give prompt written notice to the Trustee of any such designation or
rescission and of any change in the location of any such other office or agency.
Section 3.03. MONEY FOR BOND PAYMENTS TO BE HELD IN TRUST.
All payments of amounts due and payable with respect to any Bonds which
are to be made from amounts withdrawn from the Distribution Account pursuant to
Section 8.02(c) or Section 5.08 shall be made on behalf of the Issuer by the
Trustee or by a Paying Agent, and no amounts so withdrawn from the Distribution
Account for payments of Bonds shall be paid over to the Issuer under any
circumstances except as provided in this Section 3.03 or in Section 5.08.
If the Issuer shall have a Paying Agent that is not also the Bond
Registrar, it shall furnish, or cause the Bond Registrar to furnish, no later
than the fifth calendar day after each Record Date, and the first Business Day
after the Redemption Record Date applicable to the Redemption Date, a list, in
such form as such Paying Agent may reasonably require, of the names and
addresses of the Holders of Bonds and of the number of Individual Bonds of each
Class held by each such Holder.
Whenever the Issuer shall have a Paying Agent other than the Trustee, it
shall, on or before the Business Day next preceding each Payment Date and
Redemption Date, direct the Trustee in writing to deposit with such Paying Agent
an aggregate sum sufficient to pay the amounts then becoming due (to the extent
funds are then available for such purpose in the Distribution Account), such sum
to be held in trust for the benefit of the Persons entitled thereto. Any moneys
deposited with a Paying Agent in excess of an amount sufficient to pay the
amounts then becoming due on the Bonds with respect to which such deposit was
made shall, upon Issuer Order, be paid over by such Paying Agent to the Trustee
for application in accordance with Article VIII.
Any Paying Agent shall be appointed by Issuer Order. The Issuer shall
not appoint any Paying Agent which is not, at the time of such appointment, a
depository institution or trust company whose obligations would be Permitted
Investments pursuant to clause (iv) of the definition of the term "Permitted
Investments". The Issuer shall cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee (and if the Trustee acts as Paying Agent, it hereby
so agrees), subject to the provisions of this Section, that such Paying Agent
shall:
(1) allocate all sums received for payment to the Holders of
Bonds on each Payment Date and Redemption Date among such Holders in the
proportion specified in the applicable Payment Date Statement, as the
case may be, in each case to the extent permitted by applicable law;
(2) hold all sums held by it for the payment of amounts due
with respect to the Bonds in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
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(3) if such Paying Agent is not the Trustee, immediately
resign as a Paying Agent and forthwith pay to the Trustee all sums held
by it in trust for the payment of the Bonds if at any time it ceases to
meet the standards set forth above required to be met by a Paying Agent
at the time of its appointment;
(4) if such Paying Agent is not the Trustee, give the
Trustee notice of any Default by the Issuer (or any other obligor upon
the Bonds) in the making of any payment required to be made with respect
to any Bonds for which it is acting as Paying Agent;
(5) if such Paying Agent is not the Trustee, at any time
during the continuance of any such Default, upon the written request of
the Trustee, forthwith pay to the Trustee all sums so held in trust by
such Paying Agent; and
(6) comply with all requirements of the Code, and all
regulations thereunder, with respect to the withholding from any
payments made by it on any Bonds of any applicable withholding taxes
imposed thereon and with respect to any applicable reporting
requirements in connection therewith; provided, however, that with
respect to withholding and reporting requirements applicable to original
issue discount (if any) on any Class of Bonds, the Issuer has provided
the calculations pertaining thereto to the Trustee.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or any other purpose, by Issuer
Order direct any Paying Agent, if other than the Trustee, to pay to the Trustee
all sums held in trust by such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by such Paying
Agent; and upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Subject to applicable escheat laws, any money held by the Trustee or any
Paying Agent in trust for the payment of any amount due with respect to any Bond
and remaining unclaimed for six years after such amount has become due and
payable to the Holder of such Bond shall be discharged from such trust and, upon
its written request, paid to the Issuer; and the Holder of such Bond shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Trustee or such Paying Agent with respect to such trust
money shall thereupon cease. The Trustee may, but shall not be required to,
adopt and employ, at the expense of the Issuer, any reasonable means of
notification of such repayment (including, but not limited to, mailing notice of
such repayment to Holders whose Bonds have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from the records of the Trustee or any
Agent, at the last address of record for each such Holder).
Section 3.04. EXISTENCE OF ISSUER.
(a) Subject to Sections 3.04(b) and (c), the Issuer shall keep in
full effect its existence, rights and franchises as a business trust under the
laws of the State of Delaware or under the laws of any other state of the United
States of America, and shall obtain and preserve its qualification
50
to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture and the
Bonds.
(b) Subject to Section 3.09(f), any entity into which the Issuer may
be merged or with which it may be consolidated, or any entity resulting from any
merger or consolidation to which the Issuer shall be a party, shall be the
successor Issuer under this Indenture without the execution or filing of any
paper, instrument or further act to be done on the part of the parties hereto,
anything in any agreement relating to such merger or consolidation, by which any
such Issuer may seek to retain certain powers, rights and privileges therefore
obtaining for any period of time following such merger or consolidation to the
contrary notwithstanding (other than Section 3.09(f)).
(c) Upon any consolidation or merger of or other succession to the
Issuer in accordance with this Section 3.04, the Person formed by or surviving
such consolidation or merger (if other than the Issuer) may exercise every right
and power of, and shall have all of the obligations of, the Issuer under this
Indenture with the same effect as if such Person had been named as the Issuer
herein.
Section 3.05. PROTECTION OF TRUST ESTATE.
(a) The Issuer shall from time to time execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and shall take such other action as may be necessary or advisable to:
(i) Grant more effectively all or any portion of the Trust
Estate;
(ii) maintain or preserve the lien of this Indenture or carry
out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iv) enforce any of the Mortgage Documents; or
(v) preserve and defend title to the Trust Estate and the
rights of the Trustee, and of the Bondholders, in the Mortgage Loans and
the other property held as part of the Trust Estate against the claims
of all Persons and parties.
The Issuer hereby designates the Trustee its agent and attorney-in-fact
to execute any financing statement, continuation statement or other instrument
required pursuant to this Section 3.05; provided, however, that such designation
shall not be deemed to create a duty in the Trustee to monitor the compliance of
the Issuer with the foregoing covenants; and provided further, however, that the
duty of the Trustee to execute any instrument required pursuant to this Section
3.05 shall arise only if the Trustee has knowledge pursuant to Section 6.01(d)
of the occurrence of a failure of the Issuer to comply with provisions of this
Section 3.05.
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(b) Except as permitted by Section 8.09, the Trustee shall not
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 3.06 (or from the jurisdiction in which it was held, or to which it is
intended to be removed, as described in the Opinion of Counsel delivered at the
Closing Date pursuant to Section 2.12(c), if no Opinion of Counsel has yet been
delivered pursuant to Section 3.06) or cause or permit ownership or the pledge
of any portion of the Trust Estate that consists of book-entry securities to be
recorded on the books of a Person located in a different jurisdiction from the
jurisdiction in which such ownership or pledge was recorded at such time unless
the 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 shall continue to be maintained after giving effect to such action or
actions.
Section 3.06. OPINIONS AS TO TRUST ESTATE.
On or before February 15 in each calendar year, beginning with the first
calendar year commencing more than three months after the Closing Date, the
Issuer shall furnish to the Trustee an Opinion of Counsel reasonably
satisfactory in form and substance to the Trustee either stating that, in the
opinion of such counsel, such action has been taken as is necessary to maintain
the lien and security interest created by this Indenture 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 all such actions, if any, that shall, in the opinion
of such counsel, be required to be taken to maintain the lien and security
interest of this Indenture with respect to the Trust Estate until May 15 in the
following calendar year.
Section 3.07. PERFORMANCE OF OBLIGATIONS.
(a) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in the Deposit Trust Agreement.
(b) The Issuer shall not take any action and shall use its
reasonable good faith efforts not to permit any action to be taken by others
that would release any Person from any of such Person's covenants or obligations
under any of the Mortgage Documents or under any instrument included in the
Trust Estate, or that would result in the amendment, hypothecation,
subordination, termination or discharge of, or impair the validity or
effectiveness of, any of the Mortgage Documents, except as expressly provided or
permitted in this Indenture and the Servicing Agreements or such Mortgage
Documents or other instrument or unless such action shall not adversely affect
the interests of the Holders of the Bonds.
(c) The Issuer shall monitor the performance of the Servicers under
the Servicing Agreements, and shall use its reasonable good faith efforts to
cause the Servicers duly and punctually to perform all of their duties and
obligations thereunder. Upon the occurrence of a Servicing Default of which an
Authorized Officer of the Issuer has actual knowledge under a Servicing
Agreement, the Issuer shall promptly notify the Trustee thereof, and shall
specify in such notice the action, if any, the Issuer is taking in respect of
such Servicing Default. So long as any such Servicing Default shall be
continuing, the Trustee may, and shall if it determines
52
such action to be in the best interests of Bondholders, (i) terminate all of the
rights and powers of such Servicer pursuant to the applicable provisions of the
Servicing Agreement; (ii) exercise any rights it may have to enforce the
Servicing Agreement against such Servicer; and/or (iii) waive any such Servicing
Default under the Servicing Agreement or take any other action with respect to
such Servicing Default as is permitted thereunder.
(d) Upon any termination by the Trustee of a Servicer's rights and
powers pursuant to its Servicing Agreement, the rights and powers of the
Servicer with respect to the Mortgage Loans shall vest in the Trustee and the
Trustee shall be the successor in all respects to such Servicer in its capacity
as Servicer with respect to such Mortgage Loans under the related Servicing
Agreement, until the Trustee shall have appointed, with the consent of the
Issuer and the Rating Agencies, such consent not to be unreasonably withheld,
and in accordance with the applicable provisions of the Servicing Agreement, a
new FNMA- or FHLMC-approved Person to serve as successor to the Servicer. With
such consent, the Trustee may elect to continue to serve as successor Servicer
under the Servicing Agreement. Upon appointment of a successor Servicer, as
authorized under this Section 3.07(d), the Trustee and such successor Servicer
shall enter into a servicing agreement in a form substantially similar to the
affected Servicing Agreement. In connection with any such appointment, the
Trustee may make such arrangements for the compensation of such successor as it
and such successor shall agree, but in no event shall such compensation of any
successor Servicer (including the Trustee) be in excess of that payable to the
Servicer under the affected Servicing Agreement.
(e) Upon any termination of a Servicer's rights and powers pursuant
to its Servicing Agreement, the Trustee shall promptly notify the Issuer and the
Rating Agencies, specifying in such notice that the Trustee or any successor
Servicer, as the case may be, has succeeded the Servicer under the Servicing
Agreement, which notice shall also specify the name and address of any such
successor Servicer.
Section 3.08. INVESTMENT COMPANY ACT.
The Issuer shall at all times conduct its operations so as not to be
subject to the Investment Company Act of 1940, as amended (or any successor
statute), and the rules and regulations thereunder.
Section 3.09. NEGATIVE COVENANTS.
The Issuer shall not:
(a) sell, transfer, exchange or otherwise dispose of any portion of
the Trust Estate except as expressly permitted by this Indenture or the
Servicing Agreements;
(b) claim any credit on, or make any deduction from, the principal
of, or interest on, any of the Bonds by reason of the payment of any taxes
levied or assessed upon any portion of the Trust Estate;
(c) engage in any business or activity other than in connection
with, or relating to, the issuance of the Bonds pursuant to this Indenture and
the Deposit Trust Agreement, respectively,
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without, in each case, the consent of the Holders of 66 2/3% of the aggregate
Class Principal Amount of the Bonds then Outstanding;
(d) incur any indebtedness or assume or guaranty any indebtedness of
any Person, except for such indebtedness as may be incurred by the Issuer in
connection with the issuance of the Bonds pursuant to this Indenture;
(e) dissolve or liquidate in whole or in part; or
(f)(i) permit the validity or effectiveness of this Indenture or any
Grant 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 under this Indenture, except as may
be expressly permitted hereby, (ii) permit any lien, charge, security interest,
mortgage or other encumbrance (other than the lien of this Indenture or any
Permitted Encumbrance) to be created on or extended to or otherwise arise upon
or burden the Trust Estate or any part thereof or any interest therein or the
proceeds thereof or (iii) permit the lien of this Indenture not to constitute a
valid perfected first priority security interest in the Trust Estate.
Section 3.10. ANNUAL STATEMENT AS TO COMPLIANCE.
On or before 120 days after the end of the first fiscal year of the
Issuer which ends more than three months after the Closing Date, and each fiscal
year thereafter, the Issuer shall deliver to the Trustee a written statement,
signed by an Authorized Officer, stating that:
(1) a review of the fulfillment by the Issuer during such
year of its obligations under this Indenture has been made under such
officer's supervision; and
(2) to the best of such officer's knowledge, based on such
review, the Issuer has fulfilled all of its obligations under this
Indenture throughout such year, or, if there has been a Default in the
fulfillment of any such obligation, specifying each such Default known
to such officer and the nature and status thereof.
Section 3.11. RECORDING OF ASSIGNMENTS.
The Issuer shall cause the Assignments of the Mortgage Loans securing
the Bonds to be duly recorded in the manner specified in Section 4(B) of the
Custody Agreement for any Mortgaged Properties located in states not covered by
clause (5) of Part B of the Opinion of Counsel provided pursuant to Section
2.12(c). If the Issuer fails to cause the Assignment to be recorded within the
time limit provided thereunder, the Issuer shall cause the Servicers or the
sellers, as applicable, to purchase such corresponding Mortgage Loan pursuant to
Section 8.04 and the applicable provisions of the Servicing Agreements or the
Purchase Agreements.
Section 3.12. LIMITATION OF LIABILITY OF WILMINGTON TRUST COMPANY.
It is expressly understood and agreed by the parties hereto that (a)
this Indenture is executed and delivered by Wilmington Trust Company not
individually or personally but solely as owner trustee of Sequoia Mortgage Trust
6 under the Deposit Trust Agreement, in the exercise
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of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made and intended not as personal representations, undertakings and
agreements by Wilmington Trust Company, but is made and intended for the purpose
for binding only the Issuer, and (c) under no circumstances shall Wilmington
Trust Company be personally liable for the payment of any indebtedness or
expenses of the Issuer or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Issuer under this
Indenture or the other Operative Agreements.
Section 3.13. REPRESENTATIONS AND WARRANTIES OF THE ISSUER REGARDING THE
LIEN OF BONDHOLDERS.
With respect to the Mortgage Loans, the Issuer represents and warrants that, as
of the Closing Date:
(1) This Indenture creates a valid and continuing security
interest (as defined in the applicable Uniform Commercial Code (the
"UCC"), in the Mortgage Loans in favor of the Trustee, which security
interest is prior to all other liens, and is enforceable as such against
creditors of and purchasers from the Issuer;
(2) The Mortgage Loans constitute "instruments" within the
meaning of the applicable UCC;
(3) The Issuer owns or shall own and has or shall have good
title to the Mortgage Loans free and clear of any lien, claim or
encumbrance of any Person;
(4) The Issuer has or shall have received all consents and
approvals required by the terms of the Mortgage Loans to the pledge of
the Mortgage Loans hereunder to the Trustee;
(5) All original executed copies of each Mortgage Loan have
been or shall be delivered to the Custodian or Trustee;
(6) The Issuer has or shall have received a written
acknowledgement from the Custodian or Trustee that the Custodian or
Trustee is holding the Mortgage Loans solely on behalf and for the
benefit of the Trustee;
(7) Other than the security interest granted to the Trustee
pursuant to this Indenture, the Issuer has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the
Mortgage Loans. The Issuer has not authorized the filing of and is not
aware of any financing statement against the Issuer that includes a
description of the collateral covering the Mortgage Loans other than a
financing statement relating to the security interest granted to the
Trustee hereunder or that has been terminated. The Issuer is not aware
of any judgment or tax lien filings against the Issuer; and
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(8) None of the Mortgage Loans has or shall have any marks
or notations indicating that it has been pledged, assigned or otherwise
conveyed to any Person other than the Trustee.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. SATISFACTION AND DISCHARGE OF INDENTURE.
Whenever the following conditions shall have been satisfied:
(1) either
(A) all Bonds theretofore authenticated and
delivered (other than (i) Bonds which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section 2.08,
and (ii) Bonds for whose payment money has theretofore been deposited in
trust and thereafter repaid to the Issuer, as provided in Section 3.03)
have been delivered to the Trustee for cancellation; or
(B) all Bonds not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) shall become due and payable at the Stated Maturity of
the final installment of the principal thereof within one year, or
(iii) are to be called for redemption within one year under
irrevocable arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of
the Issuer,
and the Issuer, in the case of clauses (B)(i), (B)(ii) or (B)(iii) above, has
deposited or caused to be deposited with the Trustee, in trust for such purpose,
an amount sufficient to pay and discharge the entire indebtedness on such Bonds
not theretofore delivered to the Trustee for cancellation, for principal and
interest to the Stated Maturity of their entire unpaid principal amount or to
the applicable Redemption Date, as the case may be, and in the case of Bonds
which were not paid at the Stated Maturity of their entire unpaid principal
amount, for all overdue principal and all interest payable on such Bonds to the
next succeeding Payment Date therefor;
(2) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(3) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel reasonably satisfactory in form
and substance to the Trustee each stating that all conditions precedent
herein providing for the satisfaction and discharge of this Indenture
have been complied with;
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then, upon Issuer Request, this Indenture and the lien, rights and interests
created hereby shall cease to be of further effect, and the Trustee and each
co-trustee and separate trustee, if any, then acting as such hereunder shall, at
the expense of the Issuer, execute and deliver all such instruments as may be
necessary to acknowledge the satisfaction and discharge of this Indenture and
shall pay, or assign or transfer and deliver, to the Issuer or upon Issuer Order
all Mortgage Loans, cash, securities and other property held by it as part of
the Trust Estate remaining after satisfaction of the conditions set forth in
clauses (1) and (2) above.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee under Section 6.07, the obligations of
the Trustee to the Issuer and the Holders of Bonds under Section 3.03, the
obligations of the Trustee to the Holders of Bonds under Section 4.02 and the
provisions of Article II with respect to lost, stolen, destroyed or mutilated
Bonds, registration of transfers of Bonds and rights to receive payments of
principal of, and interest on, the Bonds shall survive.
Section 4.02. APPLICATION OF TRUST MONEY.
All money deposited with the Trustee pursuant to Sections 3.03 and 4.01
shall be held in trust and applied by it, in accordance with the provisions of
the Bonds and this Indenture, to the payment, either directly or through any
Paying Agent, to the Persons entitled thereto, of the principal and interest for
whose payment such money has been deposited with the Trustee.
ARTICLE V
DEFAULTS AND REMEDIES
Section 5.01. EVENT OF DEFAULT.
"Event of Default", wherever used herein, means, with respect to Bonds
issued hereunder, any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) if the Issuer shall
(A) default in the payment when and as due of any
installment of principal of or interest on any Bond, or
(B) default in the payment of the Redemption Price of any
Bond which has been called for optional redemption pursuant to Article X;
(2) if the Issuer shall breach, or default in the due observance, of
any one or more of the covenants set forth in clauses (a) through (e) of Section
3.09;
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(3) if the Issuer shall breach, or default in the due observance or
performance of, any other of its covenants in this Indenture, and such Default
shall continue for a period of 30 days after there shall have been given, by
registered or certified mail, to the Issuer by the Trustee, or to the Issuer and
the Trustee by the Holders of Bonds representing more than 50% of the aggregate
Class Principal Amount of the Controlling Class, a written notice specifying
such Default and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(4) if any representation or warranty of the Issuer made in this
Indenture or any certificate or other writing delivered pursuant hereto or in
connection herewith shall prove to be incorrect in any material respect as of
the time when the same shall have been made and, within 30 days after there
shall have been given, by registered or certified mail, written notice thereof
to the Issuer by the Trustee, or to the Issuer and the Trustee by the Holders of
Bonds representing more than 50% of the aggregate Class Principal Amount of the
Controlling Class, the circumstance or condition in respect of which such
representation or warranty was incorrect shall not have been eliminated or
otherwise cured;
(5) the entry of a decree or order for relief by a court having
jurisdiction in respect of the Issuer in an involuntary case under the federal
bankruptcy laws, as now or hereafter in effect, or any other present or future
federal or state bankruptcy, insolvency or similar law, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of the Issuer or of any substantial part of its property, or
ordering the winding up or liquidation of the affairs of the Issuer and the
continuance of any such decree or order unstayed and in effect for a period of
60 consecutive days; or
(6) the commencement by the Issuer of a voluntary case under the
federal bankruptcy laws, as now or hereafter in effect, or any other present or
future federal or state bankruptcy, insolvency or similar law, or the consent by
the Issuer to the appointment of or taking possession by a receiver, liquidator,
assignee, trustee, custodian, sequestrator or other similar official of the
Issuer or of any substantial part of its property or the making by the Issuer of
an assignment for the benefit of creditors or the failure by the Issuer
generally to pay its debts as such debts become due or the taking of corporate
action by the Issuer in furtherance of any of the foregoing.
Notwithstanding the foregoing, (a) prior to the payment in full of the
Senior Bonds, the failure of the Issuer to pay when and as due any installment
of principal of or interest (regardless of the lapse of any grace period) on any
Subordinate Bond shall not constitute an Event of Default hereunder. In
addition, notwithstanding any applicable provision of this Indenture, upon
payment in full of the Senior Bonds, the prior occurrence of any such shortfalls
attributable to the Subordinate Bonds, which shortfalls have previously been
paid in full, shall not constitute an Event of Default hereunder in respect of
the Subordinate Bonds; and (b) the failure of the Issuer to pay when and as due
any installment of principal of (regardless of the lapse of any grace period)
any Senior Bond shall not constitute an Event of Default hereunder unless the
aggregate Class Principal Amount of the Senior Bonds exceeds the aggregate
Stated Principal Balances of the Mortgage Loans after application of all
available amounts on deposit in the Distribution Account and application of
Realized Losses on a Payment Date. Subject to the foregoing, Section 5.01 of the
Indenture shall otherwise apply in all respects to the Senior Bonds.
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Section 5.02. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default occurs and is continuing with respect to the
Bonds, then and in every such case the Trustee or the Holders of Bonds
representing more than 50% of the aggregate Class Principal Amount of the Bonds
of the Controlling Class may declare all the Bonds to be immediately due and
payable, by a notice in writing to the Issuer (and to the Trustee if given by
Bondholders), and upon any such declaration such Bonds shall become immediately
due and payable in an amount equal to:
(i) the aggregate Class Principal Amount of all Classes of Bonds,
(ii) accrued and unpaid interest at the respective Bond Interest
Rates on the aggregate Class Principal Amount (or the Class Notional Amount, in
the case of the Class X Bonds) through the date of acceleration, and
(iii) in the case of the Senior Bonds, interest (but only to the
extent payment thereof shall be legally enforceable) on any overdue installments
of interest on the Senior Bonds from the Stated Maturity of any such
installments to the date of the acceleration at the Bond Interest Rate at which
such interest accrued or such lower rate at which payment of such interest shall
be legally enforceable.
At any time after such a declaration of acceleration of maturity of the
Bonds has been made and before a judgment or decree for payment of the money due
has been obtained by the Trustee as hereinafter in this Article provided, the
Holders of Bonds representing more than 50% of the aggregate Class Principal
Amount of the Controlling Class, by written notice to the Issuer and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Issuer has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all payments of principal of, and interest on, all Bonds
and all other amounts which would then be due hereunder or upon such Bonds if
the Event of Default giving rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default, other than the nonpayment of the
principal of Bonds which have become due solely by such acceleration, have been
cured or waived as provided in Section 5.15.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
Section 5.03. COLLECTION OF INDEBTEDNESS AND SUITS FOR
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ENFORCEMENT BY TRUSTEE.
Subject to Section 5.02, the Issuer covenants that if an Event of
Default shall occur and be continuing in respect to the Bonds and the Bonds have
been declared due and payable and such declaration and its consequences have not
been rescinded and annulled, the Issuer shall, upon demand of the Trustee, pay
to the Trustee, for the benefit of the Holders of the Bonds:
(i) the amounts specified in the first paragraph of Section 5.02,
and
(ii) 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 Trustee, its agents
and counsel.
If the Issuer fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, 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 Issuer or any other obligor upon the Bonds and collect, out of the Trust
Estate (as defined in the Deposit Trust Agreement), wherever situated, of the
Issuer, the moneys adjudged or decreed to be payable in the manner provided by
law; provided, however, that neither the Bank nor any of its agents, officers,
directors, employees, successors or assigns shall be personally liable for any
amounts due under the Bonds or this Indenture.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Bondholders by any Proceedings the Trustee deems appropriate 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 enforce any other proper remedy, including, without limitation,
instituting a Proceeding prior to any declaration of acceleration of the
Maturity of the Bonds for the collection of all amounts then due and unpaid on
such Bonds, prosecuting such Proceeding to final judgment or decree, enforcing
the same against the Issuer and collecting out of the property, wherever
situated, of the Issuer the moneys adjudged or decreed to be payable in the
manner provided by law.
Section 5.04. REMEDIES.
If an Event of Default shall have occurred and be continuing and the
Bonds have been declared due and payable and such declaration and its
consequences have not been rescinded and annulled, the Trustee (subject to
Section 5.18, to the extent applicable) may do one or more of the following:
(a) institute Proceedings for the collection of all amounts then
payable on the Bonds, or under this Indenture, whether by declaration or
otherwise, enforce any judgment obtained, and collect from the Issuer moneys
adjudged due;
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(b) in accordance with Section 5.18, 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;
(c) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the Trust Estate; and
(d) exercise any remedies of a secured party under the Uniform
Commercial Code and take any other appropriate action to protect and enforce the
rights and remedies of the Trustee or the Holders of the Bonds hereunder.
Section 5.05. [RESERVED].
Section 5.06. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, composition or other judicial
Proceeding relative to the Issuer or any other obligor upon any of the Bonds or
the property of the Issuer or of such other obligor or their creditors, the
Trustee (irrespective of whether the Bonds shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Issuer for the payment of any overdue
principal or interest) shall be entitled and empowered, by intervention in such
Proceeding or otherwise to:
(i) file and prove a claim for the whole amount of principal and
interest owing and unpaid in respect of the Bonds and file such other papers or
documents and take such other actions as it deems necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Bondholders allowed in such Proceeding; and
(ii) collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same; and any receiver,
assignee, trustee, liquidator or sequestrator (or other similar official) in any
such Proceeding is hereby authorized by each Bondholder to make such payments to
the Trustee and, in the event that the Trustee shall consent to the making of
such payments directly to the Bondholders, to pay to the Trustee any amount due
it for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due the Trustee under
Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Bondholder any plan
of reorganization, arrangement, adjustment or composition affecting any of the
Bonds or the rights of any Holder thereof, or to authorize the Trustee to vote
in respect of the claim of any Bondholder in any such Proceeding.
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Section 5.07. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF BONDS.
All rights of action and claims under this Indenture or any of the Bonds
may be prosecuted and enforced by the Trustee without the possession of any of
the Bonds or the production thereof in any Proceeding relating thereto, and any
such Proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be for the
ratable benefit of the Holders of the Bonds in respect of which such judgment
has been recovered. Any surplus shall be available, in accordance with Section
5.08, for the payment of the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel.
Section 5.08. APPLICATION OF MONEY COLLECTED.
If the Bonds have been declared due and payable following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, any money collected by the Trustee with respect to the Bonds pursuant
to this Article or otherwise and any monies that may then be held or thereafter
received by the Trustee with respect to the Bonds shall be applied, after
payment to the Trustee of such amounts as may be payable to it under Section
6.07, in the order, at the date or dates fixed by the Trustee and, in case of
the distribution of the entire amount due on account of principal of, and
interest on, such Bonds, upon presentation and surrender thereof:
First: To the payment of amounts then due and unpaid to any Servicer or
the Servicers in respect of Nonrecoverable Advances made by such Servicer or the
Servicers pursuant to the related Servicing Agreement or the Servicing
Agreements;
Second: To the payment of amounts of interest and principal then due and
unpaid upon the Outstanding Bonds in accordance with the priorities set forth in
Section 2.03(b); and
Third: To the payment of the remainder, if any, to the Issuer or any
other Person legally entitled thereto.
Section 5.09. LIMITATION ON SUITS.
No Holder of a Bond shall have any right to institute any Proceedings,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the Trustee
of a continuing Event of Default;
(2) the Holders of Bonds representing more than 50% of the aggregate
Class Principal Amount of the Controlling Class shall have made written request
to the Trustee to institute Proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
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(3) such Holder or Holders have offered to the Trustee indemnity in
full against the costs, expenses and liabilities to be incurred in compliance
with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such Proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of Bonds
representing more than 50% of the aggregate Class Principal Amount of the
Controlling Class;
it being understood and intended that no one or more Holders of Bonds
shall have any right in any manner whatever by virtue of, or by availing
themselves of, any provision of this Indenture to affect, disturb or prejudice
the rights of any other Holders of Bonds 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 and for the equal and ratable
benefit of all the Holders of Bonds.
Section 5.10. UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL
AND INTEREST.
Notwithstanding any other provision in this Indenture, other than the
provisions hereof limiting the right to recover amounts due on a Bond to
recovery from the property of the Issuer, the Holder of any Bond shall have the
right, to the extent permitted by applicable law, which right is absolute and
unconditional, to receive payment of each installment of interest on such Bond
on the respective Stated Maturities of such installments of interest, to receive
payment of each installment of principal of such Bond when due (or, in the case
of any Bond called for redemption, on the date fixed for such redemption) 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 5.11. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Bondholder 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 Trustee or to such Bondholder, then and in every such case the Issuer, the
Trustee and the Bondholders 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 Trustee and the
Bondholders shall continue as though no such Proceeding had been instituted.
Section 5.12. RIGHTS AND REMEDIES CUMULATIVE.
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No right or remedy herein conferred upon or reserved to the Trustee or
to the Bondholders 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 5.13. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Bond 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 or by law to
the Trustee or to the Bondholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Bondholders, as the
case may be.
Section 5.14. CONTROL BY BONDHOLDERS.
The Holders of Bonds representing more than 50% of the aggregate Class
Principal Amount of the Controlling Class shall have the right to direct the
time, method and place of conducting any Proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on the Trustee; provided,
however, that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture;
(2) any direction to the Trustee to undertake a Sale of the Trust
Estate shall be by the Holders of Bonds representing the percentage of the
aggregate Class Principal Amount of the Controlling Class specified in Section
5.18(b)(1), unless Section 5.18(b)(2) is applicable; and
(3) [Reserved];
(4) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; provided, however, that,
subject to Section 6.01, the Trustee need not take any action which it
determines might involve it in liability or be unjustly prejudicial to the
Bondholders not consenting.
Section 5.15. WAIVER OF PAST DEFAULTS.
The Holders of Bonds representing more than 50% of the aggregate Class
Principal Amount of the Controlling Class may on behalf of the Holders of all
the Bonds of such Class waive any past Default hereunder and its consequences,
except a Default:
(1) in the payment of any installment of principal of, or interest
on, any Bond; or
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(2) in respect of a covenant or provision hereof which under Section
9.02 cannot be modified or amended without the consent of the Holder of each
Outstanding Bond affected.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 5.16. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Bond by his
or her acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Bondholder, or group of Bondholders,
holding in the aggregate Bonds representing more than 10% of the aggregate Class
Principal Amount of the Controlling Class, or to any suit instituted by any
Bondholder for the enforcement of the payment of any installment of interest on
any Bond on or after the Stated Maturity thereof expressed in such Bond or for
the enforcement of the payment of any installment of principal of any Bond when
due (or, in the case of any Bond called for redemption, on or after the
applicable redemption date).
Section 5.17. WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do so) that it
shall 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 of law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
in, or the performance of, this Indenture; and the Issuer (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 Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.
Section 5.18. SALE OF TRUST ESTATE.
(a) The power to effect any sale (a "Sale") of any portion of the
Trust Estate pursuant to Section 5.04 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 Bonds and under this Indenture with respect thereto shall have
been paid. The Trustee may arrange for a public Sale by public announcement of
the time and place of such Sale and may from time to time postpone any such
public Sale, with an advance public announcement. The Trustee hereby expressly
waives its right to any amount fixed by law as compensation for any Sale.
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(b) To the extent permitted by law, the Trustee shall not in any
private Sale sell or otherwise dispose of the Trust Estate, or any portion
thereof, unless:
(1) the Holders of all Bonds of the Controlling Class
consent to, or direct the Trustee to make, such Sale; or
(2) the proceeds of such Sale would be not less than the
entire amount which would be distributable to the Holders of the Bonds, in full
payment thereof in accordance with Section 5.08, on the Payment Date next
succeeding the date of such Sale.
(3) [Reserved]
The purchase by the Trustee of all or any portion of the Trust Estate at
a private Sale shall not be deemed a Sale or disposition thereof for purposes of
this Section 5.18(b).
(c) Unless the Holders of all Bonds of the Controlling Class have
otherwise consented or directed the 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 5.18 has not
been established by the Trustee and no Person bids an amount equal to or greater
than such amount, the Trustee shall bid an amount at least $1.00 more than the
highest other bid.
(d) In connection with a Sale of all or any portion of the Trust
Estate:
(1) any Holder or Holders of Bonds 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
Bonds of the Controlling Class 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 Bonds, in case the amount 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 Trustee may bid for and acquire the property offered
for Sale in connection with any public Sale thereof, 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 Bonds as a result of such Sale in accordance with Section 5.08 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 Bonds in order to complete any such
Sale or in order for the net Sale price to be credited against such Bonds, and
any property so acquired by the Trustee shall be held and dealt with by it in
accordance with the provisions of this Indenture;
(3) the Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the Trust
Estate in connection with a Sale thereof;
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(4) the Trustee is hereby irrevocably appointed the agent
and attorney-in-fact of the Issuer 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; and
(5) no purchaser or transferee at such a Sale shall be bound
to ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
Section 5.19. ACTION ON BONDS.
The Trustee's right to seek and recover judgment 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 Trustee or the Holders of Bonds
shall be impaired by the recovery of any judgment by the Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Trust Estate.
Section 5.20. VOTING RIGHTS.
For purposes of allocating voting rights hereunder to Holders of Senior
Bonds, the Class A Bonds shall be entitled to 96% of all voting rights, and 4%
of such rights shall be allocated to the Class X Bonds.
ARTICLE VI
THE TRUSTEE
Section 6.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of 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
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are
specifically set forth in this Indenture and no others and no implied covenants
or obligations shall be read into this Indenture; and
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture. The Trustee shall,
however, examine such certificates and opinions to determine whether they
conform to the requirements of this Indenture.
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(c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(1) This paragraph does not limit the effect of subsection
(b) of this Section;
(2) The Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(3) The Trustee shall not be liable with respect to any
action it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 5.14 or Section 5.18.
(d) Except with respect to duties of the Trustee prescribed by the
TIA, as to which this Section 6.01(d) shall not apply, for all purposes under
this Indenture, the Trustee shall not be deemed to have notice or knowledge of
any Event of Default described in Section 5.01(2), 5.01(5) or 5.01(6) or any
Default described in Section 5.01(3) or 5.01(4) or any Servicing Default or
default under the Servicing Agreements unless a Responsible Officer assigned to
and working in the Trustee's corporate trust department has actual knowledge
thereof or unless written notice of any event which is in fact such an Event of
Default, Servicing Default or default is received by the Trustee at the
Corporate Trust Office, and such notice references the Bonds generally, the
Issuer, the Trust Estate or this Indenture.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not reasonably assured to it. In determining that such repayment or
indemnity is not reasonably assured to it, the Trustee must consider not only
the likelihood of repayment or indemnity by or on behalf of the Issuer but also
the likelihood of repayment or indemnity from amounts payable to it from the
Trust Estate pursuant to Sections 6.07 and 8.02(d); however, that nothing in
this Section 6.01(e) shall be construed to limit the exercise by the Trustee of
any right or remedy permitted under this Indenture or otherwise in the event of
the Issuer's failure to pay the amounts due the Trustee pursuant to Section
6.07.
(f) Every provision of this Indenture that in any way relates to the
Trustee is subject to the provisions of this Section.
(g) Notwithstanding any extinguishment of all right, title and
interest of the Issuer in and to the Trust Estate following an Event of Default
and a consequent declaration of acceleration of the Maturity of the Bonds,
whether such extinguishment occurs through a Sale of the Trust Estate to another
Person, the acquisition of the Trust Estate by the Trustee or otherwise, the
rights, powers and duties of the Trustee with respect to the Trust Estate (or
the proceeds thereof) and the Bondholders and the rights of Bondholders shall
continue to be governed by the terms of this Indenture.
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Section 6.02. NOTICE OF DEFAULT.
Within 90 days after the occurrence of any Default known to the Trustee,
the Trustee shall transmit by mail to all Holders of Bonds notice of each such
Default, unless such Default shall have been cured or waived; provided, however,
that except in the case of a Default of the type described in Section 5.01(1),
the Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee or a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determine that the
withholding of such notice is in the interests of the Holders of the Bonds; and
provided, further, that in the case of any Default of the character specified in
Section 5.01(3) or 5.01(4) no such notice to Holders of the Bonds shall be given
until at least 30 days after the occurrence thereof. Concurrently with the
mailing of any such notice to the Holders of the Bonds, the Trustee shall
transmit by mail a copy of such notice to the Rating Agencies and the Issuer.
Section 6.03. RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 6.01 hereof:
(a) the Trustee may conclusively rely and shall be fully protected
in acting or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request or Issuer Order, and any resolution
of the board of directors may be sufficiently evidenced by a written resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part
conclusively, rely upon an Officers' Certificate or the Officer's Certificate of
the Servicers;
(d) the Trustee may consult with counsel, and the written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Bondholders pursuant to this Indenture, unless such Bondholders shall
have offered to the Trustee reasonable security or indemnity satisfactory to it
against the costs, expenses and liabilities which might be incurred by it in
compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request,
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direction, consent, order, bond, note or other paper or document, but the
Trustee, in its discretion may make such further inquiry or investigation into
such facts or matters as it may see fit, and if the Trustee shall determine to
make such further inquiry or investigation, it shall be entitled, on reasonable
prior notice to the Issuer, to examine the books, records and premises of the
Issuer, personally or by agent or attorney, during the Issuer's normal business
hours; provided that the Trustee shall and shall cause its agents to hold in
confidence all such information except to the extent disclosure may be required
by law and except to the extent that the Trustee, in its sole judgment, may
determine that such disclosure is consistent with its obligations hereunder;
(g) the Trustee 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 and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agent, attorney, custodian or
nominee appointed and supervised with due care by it hereunder;
(h) the Trustee shall not 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;
(i) prior to the time that one of its Responsible Officers obtains
actual knowledge of a Servicing Default as defined in the Servicing Agreements
or a failure by the Servicers thereunder which with notice and the passage of
time shall become a Servicing Default, the Trustee shall not be responsible for
taking action with respect thereto;
(j) the Trustee shall not be responsible for supervising, monitoring
or reviewing the Servicer's performance of its duties under the Servicing
Agreements except to the extent of determining (i) that the periodic reports,
certificates and opinions required to be delivered by the Servicers to it
thereunder are delivered in timely fashion and conform to the requirements of
the Servicing Agreements, (ii) that the amounts received by it from the
Servicers for deposit in the Distribution Account during any month are as shown
in the Servicer's report for such month, (iii) and that any Trustee Mortgage
File or document therein that has been released by the Trustee to the Servicers
is returned as provided in the Servicing Agreements; and
(k) The Trustee shall have no obligation to invest and reinvest any
cash held in the Accounts in the absence of timely and specific written
investment direction from the Issuer. In no event shall the Trustee be liable
for the selection of investments or for investment losses incurred thereon. The
Trustee shall have no liability in respect of losses incurred as a result of the
liquidation of any investment prior to its stated maturity or the failure of the
Issuer to provide timely written investment direction.
(l) the provisions of this Section, other than clauses (e), (i) and
(j), and of Sections 6.01(b) and (c) shall apply to the Trustee as it may be
Successor Servicers under the Servicing Agreements.
Section 6.04. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF BONDS.
The recitals contained herein and in the Bonds, except the certificates
of authentication on the Bonds, shall be taken as the statements of the Issuer,
and the Trustee assumes no
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responsibility for their correctness. The Trustee makes no representations with
respect to the Trust Estate or as to the validity or sufficiency of this
Indenture or of the Bonds. The Trustee shall not be accountable for the use or
application by the Issuer of the Bonds or the proceeds thereof or any money paid
to the Issuer or upon Issuer Order pursuant to the provisions hereof.
Section 6.05. MAY HOLD BONDS.
The Trustee, any Agent, or any other agent of the Issuer, in its
individual or any other capacity, may become the owner or pledgee of Bonds and,
subject to Sections 6.08 and 6.13, may otherwise deal with the Issuer or any
Affiliate of the Issuer with the same rights it would have if it were not the
Trustee, Agent or such other agent.
Section 6.06. MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated from
other funds except to the extent required by this Indenture or by law. The
Trustee shall be under no liability for interest on any money received by it
hereunder except as otherwise agreed with the Issuer and except to the extent of
income or other gain on investments which are obligations of the Trustee, in its
commercial capacity, and income or other gain actually received by the Trustee
on investments, which are obligations of others.
Section 6.07. COMPENSATION AND REIMBURSEMENT.
The Issuer agrees:
(1) subject to any separate written agreement with the Trustee, to
pay the Trustee the Trustee Fee as compensation for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in connection with the performance of its duties
hereunder (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them
harmless against, any loss, liability or expense incurred without negligence or
bad faith on their part, arising out of, or in connection with, the acceptance
or administration of this trust, including the costs and expenses of defending
themselves against any claim in connection with the exercise or performance of
any of their powers or duties hereunder, provided that:
(i) with respect to any such claim, the Trustee shall have
given the Issuer written notice thereof promptly after the Trustee shall have
knowledge thereof;
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(ii) while maintaining absolute control over its own defense,
the Trustee shall cooperate and consult fully with the Issuer in preparing such
defense; and
(iii) notwithstanding anything to the contrary in this Section
6.07(3), the Issuer shall not be liable for settlement of any such claim by the
Trustee entered into without the prior consent of the Issuer.
When the Trustee incurs expenses after the occurrence of an Event of
Default with respect to the Issuer, 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 now or
hereafter in effect.
As security for the performance of the obligations of the Issuer under
this Section, the Trustee shall have a lien ranking junior to the lien of the
Bonds with respect to which any claim of the Trustee under this Section arose
(but senior to all other liens, if any) upon all property and funds held or
collected as part of the Trust Estate by the Trustee in its capacity as such.
The Trustee shall not institute any Proceeding seeking the enforcement of such
lien against the Trust Estate unless such Proceeding is in connection with a
Proceeding in accordance with Article V for enforcement of the lien of this
Indenture after the occurrence of an Event of Default (other than an Event of
Default arising solely from the Issuer's failure to pay amounts due the Trustee
under this Section 6.07) and a resulting declaration of acceleration of Maturity
of the Bonds which has not been rescinded and annulled. The obligations of the
Issuer pursuant to this section shall survive the earlier of satisfaction and
discharge of this Indenture or resignation or removal of the Trustee.
Section 6.08. ELIGIBILITY; DISQUALIFICATION.
Irrespective of whether this Indenture is qualified under the TIA, this
Indenture shall always have a Trustee who satisfies the requirements of TIA
Sections 310(a)(1) and 310(a)(5). The Trustee shall always have a combined
capital and surplus as stated in Section 6.09. The Trustee shall be subject to
TIA Section 310(b).
Section 6.09. TRUSTEE'S CAPITAL AND SURPLUS.
The Trustee shall at all times have a combined capital and surplus of at
least $50,000,000 or shall be a member of a bank holding company system, the
aggregate combined capital and surplus of which is at least $50,000,000;
provided, however, that the Trustee's separate capital and surplus shall at all
times be at least the amount required by TIA Section 310(a)(2) if this Indenture
is qualified under the TIA. If the Trustee publishes annual reports of condition
of the type described in TIA Section 310(a)(2), its combined capital and surplus
for purposes of this Section 6.09 shall be as set forth in the latest such
report.
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Section 6.10. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time by giving written notice
thereof to the Issuer. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of
Bonds representing more than 50% of the aggregate Class Principal Amount of the
Controlling Class, delivered to the Trustee and to the Issuer.
(d) If at any time:
(1) the Trustee shall have a conflicting interest prohibited
by Section 6.08 and shall fail to resign or eliminate such conflicting interest
in accordance with Section 6.08 after written request therefor by the Issuer or
by any Bondholder; provided, however, that this Section 6.10(d)(1) shall not be
operative as part of this Indenture unless and until this Indenture is qualified
under the TIA, and until such qualification this Indenture shall be construed as
if this Section 6.10(d)(1) were not contained herein; or
(2) the Trustee shall cease to be eligible under Section
6.09 or shall become incapable of acting or shall be adjudged a bankrupt or
insolvent, or a receiver of the Trustee or of its property shall be appointed,
or any public officer shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation;
then, in any such case, (i) the Issuer by an Issuer Order may remove the Trustee
or (ii) subject to Section 5.16, any Bondholder who has been a bona fide Holder
of a Bond for at least six months may, on behalf of itself and all others
similarly situated, petition any court of competent jurisdiction for the removal
of the Trustee and the appointment of a successor Trustee, unless this Indenture
is qualified under the TIA and the Trustee's duty to resign is stayed as
provided in Section 310(b) of the TIA.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Trustee for any cause,
the Issuer, by an Issuer Order shall promptly appoint a successor Trustee. If
within one year after such resignation, removal or incapability or the
occurrence of such vacancy a successor Trustee shall be appointed by Act of the
Holders of Bonds representing more than 50% of the aggregate Class Principal
Amount of the Controlling Class delivered to the Issuer and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the successor Trustee and supersede the successor
Trustee appointed by the Issuer. If no successor Trustee shall have been so
appointed by the Issuer or Bondholders and shall have accepted appointment in
the manner hereinafter provided, any Bondholder who has been a bona fide Holder
of a Bond
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for at least six months may, on behalf of itself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(f) The Issuer shall give notice, or cause notice to be given, of
each resignation and each removal of the Trustee and each appointment of a
successor Trustee to the Holders of Bonds. Each notice shall include the name of
the successor Trustee and the address of its Corporate Trust Office.
Section 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Issuer and the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee. Notwithstanding the foregoing, on request of the
Issuer or the successor Trustee, such retiring Trustee shall, upon payment of
its charges, execute and deliver an instrument transferring to such successor
Trustee all the rights, powers and trusts of the retiring Trustee, and shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder subject nevertheless to its lien,
if any, provided for in Section 6.07. Upon request of any such successor
Trustee, the Issuer shall execute and deliver any and all instruments for more
fully and certainly vesting in and confirming to such successor Trustee all such
rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under
this Article.
Section 6.12. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Bonds have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Bonds so authenticated with the same effect as if
such successor Trustee had authenticated such Bonds.
Section 6.13. PREFERENTIAL COLLECTION OF CLAIM AGAINST ISSUER.
If this Indenture is qualified under the TIA, the Trustee shall be
subject to TIA Section 311(a), excluding any creditor relationship listed in TIA
Section 311(b), and a Trustee who has resigned or been removed shall be subject
to TIA Section 311(a) to the extent indicated.
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Section 6.14. CO-TRUSTEES AND SEPARATE TRUSTEES.
At any time or times, for the purpose of meeting the legal requirements
of the TIA or of any jurisdiction in which any of the Trust Estate may at the
time be located, the Issuer and the Trustee shall have power to appoint, and,
upon the written request of the Trustee or of the Holders of Bonds representing
more than 50% of the aggregate Class Principal Amount of the Controlling Class
with respect to which a co-trustee or separate trustee is being appointed, the
Issuer shall for such purpose join with the Trustee in the execution, delivery
and performance of all instruments and agreements necessary or proper to
appoint, one or more Persons approved by the Trustee either to act as
co-trustee, jointly with the Trustee, of all or any part of the Trust Estate, or
to act as separate trustee of any such property, in either case with such powers
as may be provided in the instrument of appointment, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section. If the
Issuer does not join in such appointment within 15 days after the receipt by it
of a request to do so, or in case an Event of Default has occurred and is
continuing, the Trustee alone shall have power to make such appointment.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer. Each notice shall include the name and address of any such
co-trustee or successor trustee.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms:
(1) The Bonds shall be authenticated and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised solely by
the Trustee.
(2) The rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by such appointment
shall be conferred or imposed upon and exercised or performed by the Trustee or
by the Trustee and such co-trustee or separate trustee jointly, as shall be
provided in the instrument appointing such co-trustee or separate trustee,
except to the extent that under any law of any jurisdiction in which any
particular act is to be performed, the Trustee shall be incompetent or
unqualified to perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or separate
trustee.
(3) The Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Issuer evidenced by an Issuer Order, may accept
the resignation of or remove any co-trustee or separate trustee appointed under
this Section, and, in case of an Event of Default has occurred and is
continuing, the Trustee shall have power to accept the resignation of, or
remove, any such co-trustee or separate trustee without the concurrence of the
Issuer. Upon
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the written request of the Trustee, the Issuer shall join with the Trustee in
the execution, delivery and performance of all instruments and agreements
necessary or proper to effectuate such resignation or removal. A successor to
any co-trustee or separate trustee which has resigned or has been removed may be
appointed in the manner provided in this Section.
(4) No co-trustee or separate trustee shall be required to satisfy
the eligibility requirements under Sections 6.08 and 6.09. No co-trustee or
separate trustee hereunder shall be personally liable by reason of any act or
omission of the Trustee, or any other such trustee hereunder.
(5) Any Act of Bondholders delivered to the Trustee shall be deemed
to have been delivered to each such co-trustee and separate trustee.
Section 6.15. AUTHENTICATING AGENTS.
Upon the written request of the Issuer, the Trustee shall appoint an
Authenticating Agent with power to act on its behalf and subject to its
direction in the authentication and delivery of the Bonds designated for such
authentication by the Issuer and containing provisions therein for such
authentication (or with respect to which the Issuer has made other arrangements,
satisfactory to the Trustee and such Authenticating Agent, for notation on the
Bonds of the authority of an Authenticating Agent appointed after the initial
authentication and delivery of such Bonds) in connection with transfers and
exchanges under Sections 2.06 and 2.07, if any, as fully to all intents and
purposes as though the Authenticating Agent had been expressly authorized by
those Sections to authenticate and deliver Bonds. For all purposes of this
Indenture (other than in connection with the authentication and delivery of
Bonds pursuant to Sections 2.05 and 2.12 in connection with their initial
issuance and for purposes of Section 2.08), the authentication and delivery of
Bonds by the Authenticating Agent pursuant to this Section shall be deemed to be
the authentication and delivery of Bonds "by the Trustee". Such Authenticating
Agent shall at all times be a Person that both meets the requirements of Section
6.09 for the Trustee hereunder and has its principal office in the Borough of
Manhattan, City and State of New York.
Any Authenticating Agent shall also serve as Bond Registrar or co-Bond
Registrar, as provided in Section 2.07. Any Authenticating Agent appointed by
the Trustee pursuant to the terms of this Section 6.15 or pursuant to the terms
of any supplemental indenture shall deliver to the Trustee as a condition
precedent to the effectiveness of such appointment an instrument accepting the
trusts, duties and responsibilities of Authenticating Agent and of Bond
Registrar or co-Bond Registrar and indemnifying the Trustee for and holding the
Trustee harmless against, any loss, liability or expense (including reasonable
attorneys' fees) incurred without negligence or bad faith on its part, arising
out of or in connection with the acceptance, administration of the trust or
exercise of authority by such Authenticating Agent, Bond Registrar or co-Bond
Registrar.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding
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to the corporate trust business of any Authenticating Agent, shall be the
successor of the Authenticating Agent hereunder, if such successor corporation
is otherwise eligible under this Section, without the execution or filing of any
further act on the part of the parties hereto or the Authenticating Agent or
such successor corporation.
Any Authenticating Agent may at any time resign by giving written notice
of resignation to the Trustee and the Issuer. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and the Issuer. Upon receiving such a
notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section, the Trustee
shall promptly appoint a successor Authenticating Agent, shall give written
notice of such appointment to the Issuer and shall mail notice of such
appointment to all Holders of Bonds.
The Trustee agrees, subject to Section 6.01(e), to pay to any
Authenticating Agent from time to time reasonable compensation for its services
and the Trustee shall be entitled to be reimbursed for such payments, subject to
Section 6.07. The provisions of Sections 2.10, 6.04 and 6.05 shall be applicable
to any Authenticating Agent.
ARTICLE VII
BONDHOLDERS' LISTS AND REPORTS
Section 7.01. ISSUER TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
BONDHOLDERS.
(a) The Issuer shall furnish or cause to be furnished to the Trustee
(i) semi-annually, not less than 45 days nor more than 60 days after the
Interest Payment Date occurring closest to six months after the Closing Date and
each Interest Payment Date occurring at six-month intervals thereafter, a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Holders of Bonds and (ii) at such other times, as the Trustee may request
in writing, within 30 days after receipt by the Issuer 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 Trustee is
the Bond Registrar, no such list described in (i) or (ii) above shall be
required to be furnished.
(b) In addition to furnishing to the Trustee the Bondholder lists,
if any, required under subsection (a), the Issuer shall also furnish all
Bondholder lists, if any, required under Section 3.03 at the times required by
Section 3.03.
Section 7.02. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
BONDHOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Holders of Bonds
contained in the most recent list, if any, furnished to the Trustee as provided
in Section 7.01 and the names and addresses of the Holders of Bonds
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received by the Trustee in its capacity as Bond Registrar. The Trustee may
destroy any list furnished to it as provided in Section 7.01 upon receipt of a
new list so furnished.
(b) If this Indenture is qualified under the TIA, Bondholders may
communicate pursuant to TIA Section 312(b) with other Bondholders with respect
to their rights under this Indenture or under the Bonds.
(c) If this Indenture is qualified under the TIA, the Issuer, the
Trustee and the Bond Registrar shall have the protection of TIA Section 312(c).
Section 7.03. REPORTS BY TRUSTEE.
(a) If this Indenture is qualified under the TIA, then within 30
days after May 15 of each year (the "reporting date"), commencing with the year
after the issuance of the Bonds, (i) in the circumstance required by TIA Section
313(a), the Trustee shall mail to all Holders a brief report dated as of such
reporting date that complies with TIA Section 313(a), (ii) the Trustee shall
also mail to Holders of Bonds with respect to which it has made advances any
reports with respect to such advances that are required by TIA Section 313(b)(2)
and (iii) the Trustee shall also mail to Holders of Bonds any reports required
by TIA Section 313(b)(1). For purposes of the information required to be
included in any such reports pursuant to TIA Sections 313(a)(3), 313(b)(1) (if
applicable) or 313(b)(2), the principal amount of indenture securities
outstanding on the date as of which such information is provided shall be the
aggregate Class Principal Amount of the Bonds of the then Controlling Class
covered by the report. The Trustee shall comply with TIA Section 313(c) with
respect to any reports required by this Section 7.03(a).
(b) If this Indenture is qualified under the TIA, a copy of each
report required under this Section 7.03 shall, at the time of such transmission
to Holders of Bonds be filed by the Trustee with the Commission and with each
securities exchange upon which the Bonds are listed. The Issuer shall notify the
Trustee when the Bonds are listed on any securities exchange.
Section 7.04. REPORTS BY ISSUER.
If this Indenture is qualified under the TIA, the Issuer (a) shall file
with the Trustee, within 15 days after it files them with the Commission, copies
of the annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may by rules
and regulations prescribe) which the Issuer is required to file with the
Commission pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 and (b) shall also comply with the other provisions of TIA Section 314(a).
Section 7.05. NOTICE TO THE RATING AGENCIES.
The Issuer shall use its best efforts promptly to provide notice to the
Rating Agencies of any of the following events of which it has actual knowledge:
(a) any material change to or amendment of this Indenture;
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(b) the occurrence of any Default or Event of Default that has not
been cured;
(c) the resignation or termination of the Trustee;
(d) the substitution of Mortgage Loans; and
(e) the final payment of Bondholders; and
ARTICLE VIII
ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
Section 8.01. COLLECTION OF MONEYS.
Except as otherwise expressly provided herein, the Trustee 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 Trustee pursuant to this
Indenture. The Trustee shall hold all such money and property received by it as
part of the Trust Estate and shall apply it as provided in this Indenture.
Except as otherwise expressly provided herein, if any default occurred in the
making of any payment or performance under any agreement or instrument that is
part of the Trust Estate, the 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 hereunder and any
right to proceed thereafter as provided in Article V.
Section 8.02. DISTRIBUTION ACCOUNT.
(a) On or prior to the Closing Date, the Issuer shall cause the
Servicers to establish and maintain, in the name of the Trustee, for the benefit
of the Bondholders, the Custodial Accounts as provided in the Servicing
Agreements.
(b) On each Distribution Account Deposit Date, the Servicers shall
deposit in the Distribution Account all amounts required to be deposited therein
under the Servicing Agreements.
(c) The Trustee shall establish and maintain, on behalf of the
Bondholders, the Distribution Account. The Trustee shall, promptly upon receipt,
deposit in the Distribution Account and retain therein the following:
(i) the aggregate amount remitted by the Servicers to the
Trustee pursuant to the Servicing Agreements; and
(ii) any other amounts deposited hereunder which are required
to be deposited in the Distribution Account.
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In the event that a Servicer shall remit any amount not required to be
remitted, it may at any time direct the Trustee to withdraw such amount from the
Distribution Account, any provision herein to the contrary notwithstanding. Such
direction may be accomplished by delivering an Officers' Certificate to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Bondholders until disbursed in accordance with this
Indenture or withdrawn in accordance with Section 2.03(b). In no event shall the
Trustee incur liability for withdrawals from the Distribution Account at the
direction of a Servicer.
(d) Subject to Sections 5.02 and 5.08, on each Payment Date and
Redemption Date, the Trustee shall distribute all amounts on deposit in the
Distribution Account to Bondholders in respect of the Bonds to the extent of
amounts due and unpaid on the Bonds for principal and interest in the amounts
and in the order of priority set forth in Section 2.03(b).
Section 8.03. GENERAL PROVISIONS REGARDING PLEDGED ACCOUNTS.
(a) Each Pledged Account shall relate solely to the Bonds, and to
the Mortgage Loans, Permitted Investments and other property securing the Bonds.
Funds and other property in each Pledged Account shall not be commingled with
any other moneys or property of the Issuer or any Affiliate thereof.
Notwithstanding the foregoing, the Trustee may hold any funds or other property
received or held by it as part of a Pledged Account, other than the Distribution
Account, in collective accounts maintained by it in the normal course of its
business and containing funds or property held by it for other Persons (which
may include the Issuer or an Affiliate), provided that such accounts are under
the sole control of the Trustee and the Trustee maintains adequate records
indicating the ownership of all such funds or property and the portions thereof
held for credit to each Custodial Account.
(b) So long as no Default or Event of Default shall have occurred
and be continuing, all or a portion of the funds in the Pledged Accounts, other
than the Distribution Account, shall be invested in Permitted Investments and
reinvested by the Trustee upon written direction of the Issuer. All or a portion
of the funds in the Distribution Account shall be invested in Permitted
Investments as determined by the Trustee. Any such Permitted Investment shall
mature not later than the earliest date the funds so invested may be needed to
be applied to the use intended therefor. All income and gain (net of any losses)
realized from any such investment of funds on deposit in the Pledged Accounts,
other than the Distribution Account, shall be for the benefit of the Issuer and
shall be remitted to it monthly or upon its order. All income and gain (net of
any losses) realized from any investment of Distribution Account funds shall be
for the benefit of and retained by the Trustee. The amount of any realized
losses in the Pledged Accounts, other than the Distribution Account, incurred in
respect of any such investments shall promptly be deposited by the Issuer in the
applicable Pledged Account or Pledged Accounts; and the amount of any realized
losses in the Distribution Account incurred in respect of any such investments
shall promptly be deposited by the Trustee in the Distribution Account.
(c) Subject to Section 6.01(c), the Trustee shall not in any way be
held liable by reason of any insufficiency in any of the Pledged Accounts
resulting from any loss on any Permitted Investment included therein except for
losses attributable (i) to the Distribution
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Account and (ii) to the Trustee's failure to make payments on such Permitted
Investments issued by the Trustee, in its commercial capacity as principal
obligor and not as trustee, in accordance with their terms.
(d) If (i) the Issuer shall have failed to give investment
directions for any funds on deposit in the Pledged Accounts, other than the
Distribution Account, to the Trustee by 11:00 a.m. Eastern Time (or such other
time as may be agreed by the Issuer and Trustee) on any Business Day or (ii) a
Default or Event of Default shall have occurred and be continuing with respect
to the Bonds but the Bonds shall not have been declared due and payable pursuant
to Section 5.02 or (iii) if such Bonds shall have been declared due and payable
following an Event of Default, amounts collected or receivable from the Trust
Estate are being applied in accordance with Section 5.08 as if there had not
been such a declaration, then the Trustee shall, to the fullest extent
practicable, invest and reinvest funds in the Pledged Accounts in one or more
Permitted Investments.
(e) The Trustee shall, at all times while any Bonds are outstanding,
maintain in its possession, or in the possession of an agent whose actions with
respect to such items are under the sole control of the Trustee, all
certificates or other instruments, if any, evidencing any investment of funds in
a Pledged Account. The Trustee shall relinquish possession of such items, or
direct its agent to do so, only for purposes of collecting the final payment
receivable on such investment or certificate or, in connection with the sale of
any investment held in a Pledged Account, against delivery of the amount
receivable in connection with any sale.
Section 8.04. PURCHASES OF DEFECTIVE MORTGAGE LOANS.
(a) Upon discovery or receipt of written notice of any materially
defective document in, or, following the date of delivery to the Trustee of the
Custodian's Final Receipt as defined in and delivered under the Custodial
Agreement, that a document is missing from a Trustee Mortgage File or of the
breach by the Seller of any representation or warranty under the Mortgage Loan
Purchase and Sale Agreement in respect of any Mortgage Loan which materially
adversely affects the value of that Mortgage Loan or the interest therein of the
Bondholders (a "Defective Mortgage Loan"), the Trustee, or its designee, shall
promptly notify the Seller in writing of such defective or missing document or
breach and request that the Seller deliver such missing document or cure such
defect or breach within 90 days from the date that the Seller was notified of
such missing document, defect or breach, and if the Seller does not deliver such
missing document or cure such defect or breach in all material respects during
such period, the Trustee shall enforce the Seller's obligation under the
Mortgage Loan Purchase and Sale Agreement and cause the Seller to repurchase
that Mortgage Loan from the Trust Estate at the Purchase Price on or prior to
the Determination Date following the expiration of such 90 day period (subject
to Section 8.04(b) below); provided, however, that, in connection with any such
breach that could not reasonably have been cured within such 90 day period, if
the Seller shall have commenced to cure such breach within such 90 day period,
the Seller shall be permitted to proceed thereafter diligently and expeditiously
to cure the same within an additional 90-day period. The Purchase Price for the
repurchased Mortgage Loan shall be deposited in the related Custodial Account,
and the Trustee, or its designee, upon receipt of written certification from the
related Servicer of such deposit, shall release to the Seller the related
Trustee Mortgage File and
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shall execute and deliver such instruments of transfer or assignment, in each
case without recourse, as the Seller shall furnish to it and as shall be
necessary to vest in the Seller any Mortgage Loan released pursuant hereto and
the Trustee, or its designee, shall have no further responsibility with regard
to such Trustee Mortgage File (it being understood that the Trustee shall have
no responsibility for determining the sufficiency of such assignment for its
intended purpose). In lieu of repurchasing any such Mortgage Loan as provided
above, the Seller may cause such Mortgage Loan to be removed from the Trust
Estate (in which case it shall become a Deleted Mortgage Loan) and substitute
one or more Replacement Mortgage Loans in the manner and subject to the
limitations set forth in Section 8.04(b) below. It is understood and agreed that
the obligation of the Seller to cure or to repurchase (or to substitute for) any
Mortgage Loan as to which a document is missing, a material defect in a
constituent document exists or as to which such a breach has occurred and is
continuing shall constitute the sole remedy against the Seller respecting such
omission, defect or breach available to the Trustee on behalf of the
Bondholders.
(b) Any substitution of Replacement Mortgage Loans for Deleted
Mortgage Loans made pursuant to Section 8.04(a) above must be effected prior to
the last Business Day that is within two years after the Closing Date. As to any
Deleted Mortgage Loan for which the Seller substitutes a Replacement Mortgage
Loan or Mortgages, such substitution shall be effected by the Seller delivering
to the Trustee, for such Replacement Mortgage Loan or Loans, the Mortgage Note,
the Mortgage, the Assignment to the Trustee, and such other documents and
agreements, with all necessary endorsements thereon, together with an Officers'
Certificate stating that each such Replacement Mortgage Loan satisfies the
definition thereof and specifying the Substitution Adjustment (as described
below), if any, in connection with such substitution. The Custodian shall
acknowledge receipt for such Replacement Mortgage Loan and, within 45 days
thereafter, shall review such Mortgage Documents as specified in the Custodial
Agreement and deliver to the Trustee, with respect to such Replacement Mortgage
Loans, a certification substantially in the form of a revised Trust Receipt,
with any exceptions noted thereon. Within one year of the date of substitution,
the Custodian shall deliver to the Trustee a certification substantially in the
form of a revised Final Trust Receipt, with respect to such Replacement Mortgage
Loans, with any exceptions noted thereon. Monthly Payments due with respect to
Replacement Mortgage Loans in the month of substitution are not part of the
Trust Estate and shall be retained by the Seller. For the month of substitution,
distributions to Bondholders shall reflect the collections and recoveries in
respect of such Deleted Mortgage in the Due Period preceding the month of
substitution and the Seller shall thereafter be entitled to retain all amounts
subsequently received in respect of such Deleted Mortgage Loan. The Issuer shall
give or cause to be given written notice to the Bondholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect
the removal of such Deleted Mortgage Loan from the terms of this Indenture and
the substitution of the Replacement Mortgage Loan and shall deliver a copy of
such amended Mortgage Schedule to the Trustee. Upon such substitution, such
Replacement Mortgage Loan shall constitute part of the Trust Estate and shall be
subject in all respects to the terms of this Indenture and the Mortgage Loan
Purchase and Sale Agreement, including all representations and warranties
thereof included in the Mortgage Loan Purchase and Sale Agreement, in each case
as of the date of substitution.
For any month in which the Seller substitutes one or more Replacement
Mortgage Loans for one or more Deleted Mortgage Loans, the related Servicer
shall determine the amount (each,
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a "Substitution Adjustment"), if any, by which the aggregate Purchase Price of
all such Deleted Mortgage Loans exceeds the aggregate, as to each such
Replacement Mortgage Loan, of the principal balance thereof as of the date of
substitution, together with one month's interest on such principal balance at
the applicable Net Mortgage Rate. On the date of such substitution, the Seller
shall deliver or cause to be delivered to the Servicer for deposit in the
Custodial Account an amount equal to the related Substitution Adjustment, if
any, and the Trustee, or its designee, upon receipt of the related Replacement
Mortgage Loan or Loans and certification by the Servicer of such deposit, shall
release to the Seller the related Trustee Mortgage File or Files and shall
execute and deliver such instruments of transfer or assignment, in each case
without recourse, as the Seller shall deliver to it and as shall be necessary to
vest therein any Deleted Mortgage Loan released pursuant hereto.
In addition, the Seller shall obtain at its own expense and deliver to
the Trustee an Opinion of Counsel to the effect that such substitution (either
specifically or as a class of transactions) shall not cause (a) any federal tax
to be imposed on the Trust Estate, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(l) of the Code or on
"contributions after the startup date" under Section 860G(d)(l) of the Code, or
(b) either REMIC created hereunder to fail to qualify as a REMIC at any time
that any Bond is outstanding. If such Opinion of Counsel can not be delivered,
then such substitution may only be effected at such time as the required Opinion
of Counsel can be given.
(c) Upon discovery by the Issuer or the Trustee that any Mortgage
Loan does not constitute a "qualified mortgage" within the meaning of Section
860G(a)(3) of the Code, the party discovering such fact shall within two
Business Days give written notice thereof to the other parties. In connection
therewith, the Seller shall repurchase or, subject to the limitations set forth
in Section 8.04(b), substitute one or more Replacement Mortgage Loans for the
affected Mortgage Loan within 90 days of the earlier of discovery or receipt of
such notice with respect to such affected Mortgage Loan. Any such repurchase or
substitution shall be made in the same manner as set forth in Section 8.04(a)
above, if made by the Seller. The Trustee shall re-convey to the Seller the
Mortgage Loan to be released pursuant hereto in the same manner, and on the same
terms and conditions, as it would a Mortgage Loan repurchased for breach of a
representation or warranty.
Section 8.05. PURCHASES OF CONVERTED MORTGAGE LOANS.
The Trustee shall enforce any Servicer's obligation under a Servicing
Agreement and any seller's obligation under a Purchase Agreement, and shall
cause such party to, purchase at the Purchase Price any Mortgage Loan as to
which the Mortgagor has elected to exercise its option to convert the Mortgage
Rate to a different Index (each, a "Converted Mortgage Loan") from the Trust
Estate. Such party shall purchase each Converted Mortgage Loan from the Trust
Estate on or prior to the Determination Date following the receipt of
notification from the Mortgagor of its election to exercise the conversion
option. The Purchase Price for the Converted Mortgage Loan shall be deposited in
the related Custodial Account, and the Trustee, or its designee, upon receipt of
such deposit, shall release to the purchaser the related Trustee Mortgage File
and shall execute and deliver such instruments of transfer or assignment, in
each case without recourse, as the purchaser shall furnish to it and as shall be
necessary to vest in the purchaser any Converted
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Mortgage Loan released pursuant hereto and the Trustee, or its designee, shall
have no further responsibility with regard to such Trustee Mortgage File (it
being understood that the Trustee shall have no responsibility for determining
the sufficiency of such assignment for its intended purpose). It is understood
and agreed that the obligation of a Servicer or the seller to purchase any
Converted Mortgage Loan shall constitute the sole remedy against such party
respecting such Converted Mortgage Loan available to the Trustee on behalf of
the Bondholders.
Section 8.06. REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE
MORTGAGE LOANS.
Pursuant to the Mortgage Loan Purchase and Sale Agreement, the Seller
has made the representations and warranties with respect to the Mortgage Loans
set forth in Exhibit X hereto.
Section 8.07. RESERVED.
Section 8.08. REPORTS BY TRUSTEE.
In addition to any statements required to be delivered or prepared by
the Trustee pursuant to Section 2.09, 8.02, 8.06 or 10.01, the Trustee shall
deliver to the Issuer, within two Business Days after the request of the Issuer,
a written report setting forth the amount of each Pledged Account established
hereunder and the identity of the investments included therein. Without limiting
the generality of the foregoing, the Trustee shall, upon the written request of
the Issuer, promptly transmit to the Issuer copies of all accountings of, and
information with respect to, collections furnished to it by the Servicers and
shall promptly notify the Issuer if on the second Business Day after any
Distribution Account Deposit Date, the related Bond Payment Amount or any
portion thereof has not been received by the Trustee.
Section 8.09. TRUST ESTATE; RELEASE AND DELIVERY OF MORTGAGE DOCUMENTS.
(a) The Trustee may, and when required by the provisions of this
Indenture shall, execute instruments in form supplied to it to release property
from the lien of this Indenture, or convey the Trustee's interest in the same,
in a manner and under circumstances which are not inconsistent with the
provisions of this Indenture and the TIA. No party relying upon an instrument
executed by the Trustee as provided in this Article VIII shall be bound to
ascertain the Trustee's authority, inquire into the satisfaction of any
conditions precedent or see to the application of any moneys.
(b) [Reserved]
(c) Upon request by a Servicer accompanied by a Request for Release
delivered to the Custodian to the effect that a Mortgage Loan has been the
subject of a Prepayment in Full or has otherwise been paid in full or purchased
by the Servicer pursuant to the terms of the related Servicing Agreement or by
the seller pursuant to the terms of the related Purchase Agreement, the
Custodian shall promptly release the related Mortgage Documents and the
Custodian and the Trustee shall execute such documents as the Servicer may
request to evidence satisfaction and discharge of such Mortgage Loan.
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(d) In addition, if from time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan, or the other purposes set forth
in the Servicing Agreements, a Servicer requests the Trustee to release any
related Mortgage Documents or other documents contained in the Trustee Mortgage
File relating to such Mortgage Loan and delivers to the Custodian a Request for
Release signed by a Servicing Officer, the Custodian shall release the related
Mortgage Documents to the Servicer if the applicable requirements of the
Custodial Agreement have been satisfied.
(e) The Trustee shall, at such time as there are no Bonds
Outstanding, release all of the Trust Estate to the Issuer (other than any cash
held for the payment of the Bonds pursuant to Section 3.03 or Section 4.02),
subject, however, to Section 4.01 and the rights of the Trustee under Section
6.07.
Section 8.10. SERVICERS AS AGENTS AND BAILEES OF TRUSTEE.
In order to facilitate the servicing of the Mortgage Loans by the each
Servicer, each Servicer shall deposit in the Custodial Account proceeds of the
Mortgage Loans in accordance with the provisions of the Servicing Agreements and
this Indenture, prior to the time they are deposited into the Distribution
Account. In addition, on each Distribution Deposit Date, the Servicers shall
remit to the Trustee or its designee the Custodian for deposit in the
Distribution Account all funds held in the Custodial Account that are required
to be remitted by the Servicers in accordance with the terms of the Servicing
Agreements. Solely for purposes of perfection under Section 9-305 of the Uniform
Commercial Code or similar provision of law in the state in which such property
is held by the Servicers, the Trustee hereby designates each Servicer as its
agents and bailees to hold such funds with respect to the Mortgage Loans until
they are deposited into the Distribution Account as well as its agents and
bailees in holding any Mortgage Documents or other documents contained in a
Trustee Mortgage File released to it by the Trustee pursuant to Section 8.08,
and any other items constituting a part of the Trust Estate which from time to
time come into possession of the Servicers. It is intended that, by the
Servicer's acceptance of such agency pursuant to the Servicing Agreements, the
Trustee, as secured party, shall be deemed to have possession of such Mortgage
Documents, such moneys and such other items for purposes of Section 9-305 of the
Uniform Commercial Code or similar provision of law of the states in which such
property is held by such Servicer or the Servicers.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.
Without the consent of the Holders of any Bonds, the Issuer and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
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(1) 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 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;
(2) to add to the conditions, limitations and restrictions on the
authorized amount, terms and purposes of the issuance, authentication and
delivery of any Bonds, as herein set forth, additional conditions, limitations
and restrictions thereafter to be observed;
(3) to evidence the succession of another Person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer herein and
in the Bonds contained;
(4) to add to the covenants of the Issuer, for the benefit of the
Holders of all Bonds or to surrender any right or power herein conferred upon
the Issuer;
(5) to cure any ambiguity, to correct or supplement any provision
herein which may be defective or inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions arising
under this Indenture, which shall not be inconsistent with the provisions of
this Indenture, provided that such action shall not adversely affect the
interests of the Holders of the Bonds (any such action shall be deemed not to
adversely affect the interests of the Bondholders if the Issuer delivers to the
Trustee letters from each Rating Agency to the effect that such action shall not
result in a downgrading of the Bonds); or
(6) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to effect the qualification of this
Indenture under the TIA or under any similar federal statute hereafter enacted,
and to add to this Indenture such other provisions as may be expressly required
by the TIA.
The Trustee is 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, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise except to the extent required by law.
Section 9.02. SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS.
With the consent of the Holders of Bonds representing not less than
two-thirds of the aggregate Class Principal Amount of the Controlling Class by
Act of said Holders delivered to the Issuer and the Trustee, the Issuer and the
Trustee may 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 Bonds under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Bond affected thereby:
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(1) change the Stated Maturity of the final installment of the
principal of, or any installment of interest on, any Bond or reduce the
principal amount thereof, the Bond Interest Rate thereon or the Redemption Price
with respect thereto, change the earliest date on which any Bond may be redeemed
at the option of the Issuer, change any place of payment where, or the coin or
currency in which, any Bond or any interest thereon is payable, or impair the
right to institute suit for the enforcement of the payment of any installment of
interest due on any Bond on or after the Stated Maturity thereof or for the
enforcement of the payment of the entire remaining unpaid principal amount of
any Bond on or after the Stated Maturity of the final installment of the
principal thereof (or, in the case of redemption, on or after the applicable
Redemption Date);
(2) reduce the percentage of the aggregate Class Principal Amount of
the Bonds of the Controlling Class, 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 provisions of this Indenture
or Defaults hereunder and their consequences provided for in this Indenture;
(3) modify any of the provisions of this Section, Section 5.14 or
Section 5.18(b) except to increase any percentage specified therein or to
provide that certain other provisions of this Indenture cannot be modified or
waived without the consent of the Holder of each Outstanding Bond affected
thereby;
(4) modify or alter the provisions of the proviso to the definition
of the term "Outstanding";
(5) 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
(except for Permitted Encumbrances) or terminate the lien of this Indenture on
any property at any time subject hereto or deprive the Holder of any Bond of the
security afforded by the lien of this Indenture; or
(6) modify any of the provisions of this Indenture in such manner as
to materially and adversely affect rights of the Holders of the Bonds of the
Controlling Class to the benefits of any provisions for the mandatory redemption
of Bonds contained herein.
The Trustee may in its discretion determine whether or not the rights of
the Holder of any Bond of the Controlling Class would be materially and
adversely affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Bonds authenticated and delivered
hereunder. The Trustee shall not be liable for any such determination made in
good faith.
It shall not be necessary for any Act of Bondholders under this Section
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 Issuer and the Trustee of any
supplemental indenture pursuant to this Section, the Trustee shall mail to the
Issuer and to the Holders of the Bonds to
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which such supplemental indenture relates a notice setting forth in general
terms the substance of such supplemental indenture. Any failure of the Trustee
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 accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise.
Section 9.04. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Bonds to which such supplemental indenture relates which have theretofore
been or thereafter are authenticated and delivered hereunder shall be bound
thereby.
Section 9.05. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article shall conform to
the requirements of the TIA as then in effect so long as this Indenture shall
then be qualified under the TIA.
Section 9.06. REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES.
Bonds authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and if required by the
Trustee shall, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Bonds so modified as to conform, in the opinion of the Trustee and the
Issuer, to any such supplemental indenture may be prepared and executed by the
Issuer and authenticated and delivered by the Trustee in exchange for Bonds of
the Controlling Class.
Section 9.07. AMENDMENTS TO DEPOSIT TRUST AGREEMENT OR SERVICING
AGREEMENTS.
The Trustee shall, upon Issuer Request, consent to any proposed
amendment to the Deposit Trust Agreement or a Servicing Agreement, or an
amendment to or waiver of any provision of any other document relating to the
Deposit Trust Agreement or a Servicing Agreement, such consent to be given
without the necessity of obtaining the consent of the Holders of any Bonds upon
receipt by the Trustee of:
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(i) an Opinion of Counsel to the effect that such amendment or
waiver shall not materially and adversely affect the interests of the Holders of
the Bonds and that all conditions precedent to such consent specified in this
Section 9.07 have been satisfied; provided, however, that no such Opinion of
Counsel shall be required if the Person requesting the amendment obtains a
letter from each Rating Agency stating that the amendment would not result in
the downgrading or withdrawal of the respective ratings then assigned to the
Bonds;
(ii) an Officers' Certificate or an Officer's Certificate of the
Servicer, as applicable, to which such proposed amendment or waiver shall be
attached, stating that such attached copy is the true copy of the proposed
amendment or waiver and that all conditions precedent to such consent specified
in this Section 9.07 have been satisfied;
(iii) written confirmation from the Rating Agencies that the
implementation of the proposed amendment or waiver shall not adversely affect
their rating of the Bonds; and
(iv) any other document required pursuant to Section 12.01.
Notwithstanding the foregoing, the Trustee may decline to consent to a
proposed waiver or amendment that adversely affects its own rights, duties or
immunities under this Indenture or otherwise.
Nothing in this Section 9.07 shall be construed to require that any
Person obtain the consent of the Trustee to any amendment or waiver or any
provision of any document where the making of such amendment or the giving of
such waiver without obtaining the consent of the Trustee is not prohibited by
this Indenture or by the terms of the document that is the subject of the
proposed amendment or waiver.
ARTICLE X
REDEMPTION OF BONDS
Section 10.01. REDEMPTION.
(a) The Bonds shall not be subject to special redemption.
(b) The Bonds shall be subject to redemption by the Issuer, in whole
but not in part, on any Payment Date on or after (i) the date on which the then
current Pool Stated Principal Balance is less than or equal to 20% of the
Assumed Principal Balance on the Closing Date or (ii) the Clean-up Call Date, on
the terms and conditions specified in this Article X at the Redemption Price. If
the Issuer elects to so redeem the Bonds, it shall, no later than 30 days prior
to the Payment Date selected for such redemption, deliver notice of such
election to the Trustee and either (a) deposit in the Distribution Account the
Redemption Price therefor (the "Redemption Amount") or (b) state in such notice
that the Redemption Amount shall be deposited in the Distribution Account not
later than 10:00 a.m., New York City time, on the applicable Redemption Date. In
connection with such redemption, the Trustee, on behalf of the
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Issuer, shall cause each REMIC to adopt a plan of complete liquidation for
federal tax purposes by complying with the provisions of Section 11.07.
(c) If the Issuer elects to cause a redemption of the Bonds on any
Payment Date on or after the Clean-up Call Date, the Issuer may effect such
redemption by executing a sale of the property constituting the Trust Estate.
Upon such sale, the Trustee shall execute all customary assignments necessary to
transfer title of the property constituting the Trust Estate to the purchaser of
such assets; provided, however, that the Trustee shall not release its lien on
the Trust Estate until funds in an amount equal to the Redemption Amount have
been deposited in the Distribution Account, or escrow arrangements have been
made to the satisfaction of the Trustee.
(d) In effecting any redemption pursuant to subsection (b),
concurrent with the notice provided for therein, the Issuer shall deliver an
Issuer Order directing the Trustee to effect such redemption, any certification
and opinion required pursuant to Section 12.01 and a form of redemption notice.
Section 10.02. FORM OF REDEMPTION NOTICE.
Notice of redemption shall be given by the Trustee in the name of and at
the expense of the Issuer by first class mail, postage prepaid, mailed not less
than thirty days prior to the applicable Redemption Date (but in no event prior
to the date on which the Redemption Price with respect to the Bonds to be
redeemed pursuant to Section 10.01 has been deposited in the Distribution
Account or the date on which the notice of such deposit referred to in Section
10.01 has been received by the Trustee) and each Holder of Bonds to be redeemed,
such Holders being determined as of the Record Date with respect to the Payment
Date on which such redemption is to occur.
All notices of redemption shall state:
(1) the Redemption Date; and
(2) the fact of such payment in full, the place where such Bonds are
to be surrendered for payment of the Redemption Price (which shall be the office
or agency of the Issuer to be maintained as provided in Section 3.02). Failure
to give notice of redemption, or any defect therein, to any Holder of any Bond
selected for redemption shall not impair or affect the validity of the
redemption of any other Bond.
Section 10.03. BONDS PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as provided in Section 10.02, the
Bonds shall, on the applicable Redemption Date, become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price or elect not to retire the Bonds so redeemed, as provided in
Section 10.04) no interest shall accrue on such Redemption Price for any period
after the last day preceding the day on which such Redemption Date occurs. Upon
deposit of the Redemption Amount in the Distribution Account, if the Bonds are
being redeemed
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and retired, the Trustee shall release any other funds or property remaining in
the Collateral to the Issuer.
Section 10.04. RETENTION OF BONDS BY ISSUER
If the Issuer elects to redeem the Bonds in accordance with the
provisions of Section 10.01(b), it may elect to cause the Bonds to remain
Outstanding and not release the lien of the Indenture with respect to the Trust
Estate securing such Bonds or terminate such Bonds. If the Issuer so elects, the
Bonds shall not merge with the security therefor, but shall remain validly
Outstanding, subject to the following paragraph.
The Trustee, if so directed by the Issuer in writing not less than (5)
Business Days prior to the Redemption Date, shall authenticate and prepare for
delivery on the Redemption Date new Bonds evidencing Book Entry Bonds or
Definitive Bonds (as directed by the Issuer) on the order of the Issuer against
receipt by the Trustee of immediately available funds in an amount not less than
the Redemption Amount.
Notwithstanding the foregoing, no redemption of any Bond shall be
permitted without retiring it and no sale of previously redeemed Bonds may be
made by the Issuer unless the Issuer shall have delivered to the Trustee an
Opinion of Counsel that such redemption without retirement or sale, as the case
may be, does not violate any provision of the TIA or other applicable law.
ARTICLE XI
REMIC PROVISIONS
Section 11.01. TIERED REMIC STRUCTURE
The Trustee shall elect that the Trust Estate be treated for federal
income tax and, if necessary, under Applicable State and/or Local Tax Laws,
purposes as comprising two real estate mortgage investment conduits (each a
"REMIC" or, in the alternative, the Lower Tier REMIC and the Upper Tier REMIC,
respectively). Each Bond, other than the Class A-R Bond, represents ownership of
regular interests in the Upper Tier REMIC for purposes of the REMIC Provisions.
The Class A-R Bond represents ownership of the sole class of residual interest
in each of the Lower Tier REMIC and the Upper Tier REMIC for purposes of the
REMIC Provisions. The Upper Tier REMIC shall hold as assets the several classes
of uncertificated Lower Tier Interests, other than the Class LT-R Interest, set
out below. Each such Lower Tier Interest, other than the Class LT-R Interest, is
hereby designated as a regular interest in the Lower Tier REMIC. The Lower Tier
REMIC shall hold as assets all property of the Trust Estate other than the Lower
Tier Interests and the Basis Risk Reserve Fund and the Issuer's rights in any
Additional Collateral.
LOWER TIER REMIC
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The following table specifies the class designation, interest rate, and
principal amount for each class of Lower Tier Interests and references the
Corresponding Class of Bonds for each Lower Tier Interest.
Lower Tier Class Lower Tier Initial Class or Corresponding Class
Designation Interest Rate Principal Amount of Bonds
---------------- ------------- ---------------- -------------------
Class LT-A Net WAC $496,378,000.00 Class A
(1) Class X
Class LT-A2 Net WAC 100.00 Class A-R
Class LT-X 0% 100.00 Class X
Class LT-B-1 Net WAC 5,915,000.00 Class B-1
(2) Class X
Class LT-B-2 Net WAC 5,143,000.00 Class B-2
(3) Class X
Class LT-B-3 Net WAC 2,315,000.00 Class B-3
(4) Class X
Class LT-B-4 Net WAC 1,534,000.00 Class B-4
Class LT-B-5 Net WAC 1,028,000.00 Class B-5
Class LT-B-6 Net WAC 2,068,996.83 Class B-6
Class LT-R (5) (5) Class A-R
---------------------
(1) The Class X Bond is entitled to a specified portion of the interest
payable on the Class LT-A Interest. Specifically, for each Payment Date
the Class X Bond shall be entitled to interest accrued on the Class LT-A
Interest for the related Accrual Period at a per annum rate equal to the
Net WAC minus the Bond Interest Rate for the Class A Bonds.
(2) The Class X Bond is entitled to a specified portion of the interest
payable on the Class LT-B-1 Interest. Specifically, for each Payment
Date the Class X Bond shall be entitled to interest accrued on the Class
LT-B-1 Interest for the related Accrual Period at a per annum rate equal
to the Net WAC minus the Bond Interest Rate for the Class B-1 Bonds.
(3) The Class X Bond is entitled to a specified portion of the interest
payable on the Class LT-B-2 Interest. Specifically, for each Payment
Date the Class X Bond shall be entitled to interest accrued on the Class
LT-B-2 Interest for the related Accrual Period at a per annum rate equal
to the Net WAC minus the Bond Interest Rate for the Class B-2 Bonds.
(4) The Class X Bond is entitled to a specified portion of the interest
payable on the Class LT-B-3 Interest. Specifically, for each Payment
Date the Class X Bond shall be entitled to interest accrued on the Class
LT-B-3 Interest for the related Accrual Period at a per annum rate equal
to the Net WAC minus the Bond Interest Rate for the Class B-3 Bonds.
(5) The Class LT-R Interest shall represent the sole class of residual
interest in the Lower Tier REMIC. It does not have an interest rate or a
principal amount.
On each Payment Date, the Trustee shall allocate the Bond Payment Amount,
and shall allocate all Realized Losses, among the Lower Tier Interests in the
same manner that interest and principal is paid, and in the same manner that
Realized Losses are allocated, on the Corresponding Classes of Bonds for such
Payment Date.
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UPPER TIER REMIC
The Upper Tier REMIC shall hold as assets the several classes of
uncertificated Lower Tier Interests, other than the Class LT-R Interest,
described above. Each Class of Bonds, other than the Class X and the Class A-R
Bonds, represent ownership of a single class of regular interests in the Upper
Tier REMIC. The Class X Bonds represent the ownership of one principal-only
regular interest, and four interest-only regular interests in the Upper-Tier
REMIC. The Class A-R Bond represents ownership of the sole class of residual
interest in each of the Upper Tier and Lower Tier REMIC for purposes of the
REMIC Provisions.
Section 11.02. REMIC ADMINISTRATION
(a) As set forth in section 11.01 hereto, the Issuer shall elect
REMIC status in accordance with the REMIC Provisions with respect to each of the
Lower Tier REMIC and the Upper Tier REMIC. The Issuer shall make such elections
on Forms 1066 or other appropriate federal tax or information return for the
taxable year ending on the last day of the calendar year in which the Bonds are
issued. For the purposes of such elections, each of the Lower Tier Interests,
other than the Class LT-R Interest, is hereby designated as a regular interest
in the Lower Tier REMIC, and each Bond, other than the Class A-R Bond, is hereby
designated as representing ownership of regular interests in the Upper Tier
REMIC. The Class LT-R Interest is hereby designated as the sole residual
interest in the Lower Tier REMIC. The Class A-R Bond represents ownership of the
Class LT-R Interest and is also hereby designated as the sole residual interest
in the Upper Tier REMIC.
(b) The Closing Date is hereby designated as the "Startup Day" of
each REMIC within the meaning of section 860G(a)(9) of the Code. The latest
possible maturity date for purposes of Treasury Regulation 1.860G-1(a)(4), is
the Payment Date in May, 2027.
(c) The Trustee shall pay any and all tax related expenses (not
including taxes) of each REMIC, including but not limited to any professional
fees or expenses related to audits or any administrative or judicial proceedings
with respect to such REMIC that involve the Internal Revenue Service or state
tax authorities, but only to the extent that (i) such expenses are ordinary or
routine expenses, including expenses of a routine audit but not expenses of
litigation (except as described in (ii)); or (ii) such expenses or liabilities
(including taxes and penalties) are attributable to the negligence or willful
misconduct of the Trustee in fulfilling its duties hereunder (including its
duties as tax return preparer). The Trustee shall be entitled to reimbursement
of the expenses to the extent provided in clause (i) above from the Distribution
Account.
(d) The Trustee shall prepare, and the Issuer shall sign and file,
all of each REMIC's federal and state tax and information returns. The expenses
of preparing and filing such returns shall be borne by the Trustee. If any
Disqualified Organization acquires any Ownership Interest in the Class A-R Bond,
then the Trustee shall upon request provide to the Internal Revenue Service, and
to the persons specified in Sections 860E(e)(3) and (6) of the Code, such
information as required in Section 860D(a)(6)(B) of the Code needed to compute
the tax
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imposed under Section 860E(e) of the Code on transfers of residual interests to
Disqualified Organizations.
(e) The Trustee or its designee shall perform on behalf of each
REMIC all reporting and other tax compliance duties that are the responsibility
of such REMIC under the Code, the REMIC Provisions, or other compliance guidance
issued by the Internal Revenue Service or any state or local taxing authority.
Among its other duties, if required by the Code, the REMIC Provisions, or other
such guidance, the Trustee shall provide (i) to the Treasury or other
governmental authority such information as is necessary for the application of
any tax relating to the transfer of a Residual Certificate to any Disqualified
Organization and (ii) to the Bondholders such information or reports as are
required by the Code or REMIC Provisions.
(f) The Trustee, the Issuer, the Manager acting on behalf of the
Issuer, and the Class A-R Bondholder shall take all reasonable actions or cause
each REMIC to take all reasonable actions necessary to create or maintain the
status of such REMIC as a REMIC under the REMIC Provisions and shall assist each
other as necessary to create or maintain such status. Neither the Trustee, the
Issuer, the Manager on behalf of the Issuer, nor the Class A-R Bondholder shall
take any action, cause either REMIC to take any action or fail to take (or fail
to cause to be taken) any action that, under the REMIC Provisions, if taken or
not taken, as the case may be, could (i) endanger the status of such REMIC as a
REMIC or (ii) result in the imposition of a tax upon such REMIC (including but
not limited to the tax on prohibited transactions as defined in Code Section
860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d)
of the Code) (either such event, an "Adverse REMIC Event") unless the Trustee
has received an Opinion of Counsel (at the expense of the party seeking to take
such action) to the effect that the contemplated action shall not endanger such
status or result in the imposition of such a tax. In addition, prior to taking
any action with respect to either REMIC or the assets therein, or causing such
REMIC to take any action, which is not expressly permitted under the terms of
this Agreement, the Class A-R Bondholder shall consult with the Trustee, or its
respective designee, in writing, with respect to whether such action could cause
an Adverse REMIC Event to occur with respect to either REMIC created hereunder,
and no such Person shall take any such action or cause such REMIC to take any
such action as to which the Trustee has been advised it in writing that an
Adverse REMIC Event could occur.
(g) To the extent either REMIC created hereunder is subject to
federal, state, or local taxes, then except as otherwise provided in Section
11.02(c), the Trustee shall pay such taxes out of current or future amounts
otherwise distributable to the Class A-R Bondholder, or, if no such amounts are
available, out of other amounts held in the Distribution Account, and shall
reduce amounts otherwise payable to holders of regular interests in such REMICs.
(h) The Trustee shall, for federal income tax purposes, maintain
books and records with respect to each REMIC on a calendar year and on an
accrual basis.
(i) No additional contributions of assets shall be made to any
REMIC, except as expressly provided in this Agreement with respect to
Replacement Mortgage Loan.
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(j) Neither the Trustee, the Issuer, nor the Manager acting on behalf
of the Issuer shall enter into any arrangement by which any REMIC shall receive
a fee or other compensation for services.
Section 11.03. PROHIBITED TRANSACTIONS AND ACTIVITIES.
Neither the Trustee, the Issuer, nor the Manager acting on behalf of the
Issuer shall sell, dispose of, or substitute for any of the Mortgage Loans,
except in a disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii)
the bankruptcy of the Trust Estate, (iii) the termination of each REMIC pursuant
to Article X of this Indenture, (iv) a substitution of a Replacement Mortgage
Loan for a Mortgage Loan or (v) a purchase of a Mortgage Loan pursuant to
Section 8.04 or Section 8.05 of this Indenture, nor acquire any assets for any
REMIC, nor sell or dispose of any investments in the Distribution Account for
gain, nor accept any contributions to the REMIC after the Closing Date, unless
the Trustee has received an Opinion of Counsel (at the expense of the party
causing such disposition, acquisition, substitution, or acceptance) that such
disposition, acquisition, substitution, or acceptance shall not (a) affect
adversely the status of such REMIC as a REMIC or of the Bonds other than the
Class A-R Bonds as the regular interests therein, (b) affect adversely the
payment of interest or principal on the Bonds, (c) result in the encumbrance of
the assets constituting the Trust Estate (except pursuant to the provisions of
this Indenture) or (d) cause such REMIC to be subject to a tax on prohibited
transactions or prohibited contributions pursuant to the REMIC Provisions.
Section 11.04. INDEMNIFICATION WITH RESPECT TO PROHIBITED TRANSACTIONS
OR LOSS OF REMIC STATUS
In the event that a REMIC fails to qualify as a REMIC, loses its status
as a REMIC, or incurs federal, state or local taxes as a result of a prohibited
transaction or prohibited contribution under the REMIC Provisions due to the
negligent performance by the Trustee of its duties and obligations set forth
herein, the Trustee shall indemnify the Bondholders against any and all losses,
claims, damages, liabilities or expenses ("Losses") resulting from such
negligence; provided, however, that the Trustee shall not be liable for any such
Losses attributable to the action or inaction of the Issuer, the Manager acting
on behalf of the Issuer, the Depositor, or the Seller, as applicable, nor for
any such Losses resulting from misinformation provided by any of the foregoing
parties on which the Trustee has relied. Notwithstanding the foregoing, however,
in no event shall the Trustee have any liability (1) for any action or omission
that is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of, this Indenture, (2) for any Losses
other than arising out of malfeasance, willfull misconduct or negligent
performance by the Trustee of its duties and obligations set forth herein, and
(3) for any special or consequential damages to Bondholders (in addition to
payment of principal and interest on the Bonds).
Section 11.05. REO PROPERTY.
(a) Notwithstanding any other provision of this Agreement, neither
the Trustee, the Issuer, nor the Manager acting on behalf of the Issuer shall
permit any Servicer to, rent, lease, or otherwise earn income on behalf of any
REMIC with respect to any REO Property which might
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cause such REO Property to fail to qualify as "foreclosure" property within the
meaning of section 860G(a)(8) of the Code or result in the receipt by any REMIC
of any "income from non-permitted assets" within the meaning of section
860F(a)(2) of the Code or any "net income from foreclosure property" which is
subject to tax under the REMIC Provisions unless the applicable Servicer has
provided to the Trustee an Opinion of Counsel concluding that, under the REMIC
Provisions, such action would not adversely affect the status of the REMIC as a
REMIC and any income generated for such REMIC by the REO Property would not
result in the imposition of a tax upon such REMIC.
(b) The Manager acting on behalf of the Issuer shall make, or shall
cause the applicable Servicer to make, reasonable efforts to sell any REO
Property for its fair market value. In any event, however, the Manager acting on
behalf of the Issuer shall cause the applicable Servicer to dispose of any REO
Property within three years from the end of the calendar year of its acquisition
unless the Trustee (on behalf of the Issuer) has received a grant of extension
from the Internal Revenue Service to the effect that, under the REMIC Provisions
and any relevant proposed legislation and under Applicable State and/or Local
Tax Law, the REMIC may hold REO Property for a longer period without adversely
affecting the REMIC status of such REMIC or causing the imposition of a Federal
or state tax upon such REMIC. If the Trustee has received such an extension,
then (a) the Trustee shall provide a copy of such extension to the Manager
acting on behalf of the Issuer and (b) the Trustee, or the Manager acting on
behalf of the Issuer shall cause the applicable Servicer to continue to attempt
to sell the REO Property for its fair market value for such period longer than
three years as such extension permits (the "Extended Period"). If the Trustee
has not received such an extension and the Trustee, or the applicable Servicer
is unable to sell the REO Property within 33 months after its acquisition by the
Trust Fund or if the Trustee has received such an extension, and the Trustee is
unable to sell the REO Property within the period ending three months before the
close of the Extended Period, the Trustee shall auction the REO Property to the
highest bidder (which may be the Depositor or the Seller) in an auction
reasonably designed to produce a fair price prior to the expiration of the
three-year period or the Extended Period, as the case may be.
Section 11.06. TAX CLASSIFICATION OF THE BASIS RISK RESERVE FUND
The Trustee shall treat the Basis Risk Reserve Fund as an outside
reserve fund within the meaning of Treasury Regulation Section 1.860G-2(h) that
is owned by the Class X Bondholder and that is not an asset of any REMIC created
pursuant to this Indenture. The Trustee shall treat the rights of the LIBOR
Bondholders to receive payments from the Basis Risk Reserve Fund as rights in an
interest rate cap contract written by the Class X Bondholder in favor of the
LIBOR Bondholders. Thus, each LIBOR Bond shall be treated as representing not
only ownership of a regular interest in the Upper Tier REMIC, but also ownership
of an interest in an interest rate cap contract.
Section 11.07. REMIC LIQUIDATION
If the Issuer exercises its option under Section 10.01(b) to redeem the
Bonds, then, in preparing any REMIC tax returns, the Trustee shall treat such
redemption as a sale of the Trust
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Estate for cash followed by a payment of the purchase price to the Bondholders
in redemption of their Bonds and in liquidation of each REMIC created hereunder.
The Trustee shall attach a statement to the final federal income tax return of
each REMIC created hereunder stating that pursuant to Treasury Regulation
Section 1.860F-1, the first day of the 90-day liquidation period for each REMIC
was the date on which the Issuer redeemed the Bonds.
ARTICLE XII
MISCELLANEOUS
Section 12.01. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Issuer to the Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Trustee an Officers' Certificate stating that all conditions precedent, if any,
provided for in this Indenture relating to the proposed action have been
complied with and 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
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate, opinion or letter with respect to compliance with a
condition or covenant provided for in this Indenture (including one furnished
pursuant to specific requirements of this Indenture relating to a particular
application or request) shall include:
(1) a statement that each individual signing such certificate,
opinion or letter has 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, opinion or letter are based;
(3) a statement that, in the opinion of each such individual, he or she
has made such examination or investigation as is necessary to enable such
individual to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
Section 12.02. FORM OF DOCUMENTS DELIVERED TO 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
97
Any certificate or opinion of an officer of the Issuer 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 other certificate or opinion is based
are erroneous. Any such Issuer certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an Authorized Officer or Officers of the Owner Trustee or a
certificate of the officers of the Depositor or the manager of the Issuer,
stating that the information with respect to such factual matters is in the
possession of the Owner Trustee, or the Depositor or the manager of the Issuer,
unless such officer or 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. Any Opinion of Counsel may be based on the written
opinion of other counsel, in which event such Opinion of Counsel shall be
accompanied by a copy of such other counsel's opinion and shall include a
statement to the effect that such counsel believes that such counsel and the
Trustee may reasonably rely upon the opinion of such other counsel.
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.
Wherever in this Indenture, in connection with any application or
certificate or report to the Trustee, it is provided that the Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of the Issuer'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 Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Trustee's right to rely upon the truth and accuracy of
any statement or opinion contained in any such document as provided in Section
6.01(b)(2).
Whenever in this Indenture it is provided that the absence of the
occurrence and continuation of a Default or Event of Default is a condition
precedent to the taking of any action by the Trustee at the request or direction
of the Issuer, then, notwithstanding that the satisfaction of such condition is
a condition precedent to the Issuer's right to make such request or direction,
the Trustee shall be protected in acting in accordance with such request or
direction if it does not have knowledge of the occurrence and continuation of
such Default or Event of Default as provided in Section 6.01(d).
Section 12.03. ACTS OF BONDHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Bondholders may be embodied in any evidence by one or more instruments of
substantially similar tenor signed by such Bondholders in person or by an agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
delivered
98
to the Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Bondholders
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) conclusive in favor of
the Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgements of deeds, certifying that the individual signing
such instrument or writing acknowledged to him or her the execution thereof.
Whenever such execution is by an officer of a corporation or a member of a
partnership on behalf of such corporation or partnership, such certificate or
affidavit shall also constitute sufficient proof of his or her authority.
(c) The ownership of Bonds shall be proved by the Bond Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Bonds shall bind the Holder of every
Bond issued upon the registration of transfer thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Trustee or the Issuer in reliance thereon, whether or not any notation of
such action is made upon such Bonds.
Section 12.04. NOTICES, ETC. TO TRUSTEE AND ISSUER.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Bondholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed in
writing to or with and received by the Trustee at its Corporate Trust Office;
(2) the Issuer by the Trustee or by any Bondholder shall be
sufficient for every purpose hereunder (except as provided in Sections 5.01(3)
and (4)) if in writing and mailed, first-class, postage prepaid, to the Issuer
addressed to it c/o Sequoia Mortgage Funding Corporation, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or at any other address previously furnished
in writing to the Trustee by the Issuer; or
(3) any Rating Agency by the Trustee, the Issuer or the Servicers
shall be sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with and received by such Rating Agency at the address
specified therefor in the definition corresponding to the name of such Rating
Agency.
99
Section 12.05. NOTICES AND REPORTS TO BONDHOLDERS; WAIVER OF NOTICES.
Where this Indenture provides for notice to Bondholders of any event or
the mailing of any report to Bondholders, such notice or report shall be
sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class, postage prepaid, to each Bondholder affected by such event or to
whom such report is required to be mailed, at the address of such Bondholder as
it appears on the Bond Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice or the mailing
of such report. In any case where a notice or report to Bondholders is mailed in
the manner provided above, neither the failure to mail such notice or report,
nor any defect in any notice or report so mailed, to any particular Bondholder
shall affect the sufficiency of such notice or report with respect to other
Bondholders, and any notice or report which is mailed in the manner herein
provided shall be conclusively presumed to have been duly given or provided.
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. Waiver of notice by any Bondholder shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such 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 Bondholders 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 Trustee shall be deemed to be a
sufficient giving of such notice.
Section 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for any meeting of Bondholders.
Any Agent may make reasonable rules and set reasonable requirements for its
functions.
Section 12.07. CONFLICT WITH TRUST INDENTURE ACT.
If this Indenture is qualified under the TIA and any provision hereof
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Indenture by any of the provisions of the TIA, such
required provision shall control.
Section 12.08. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
100
Section 12.09. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Issuer shall bind
its successors and assigns, whether so expressed or not.
Section 12.10. SEPARABILITY.
In case any provision in this Indenture or in the Bonds 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 12.11. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Bonds, expressed or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, any separate trustee or co-trustee appointed under Section 6.14 and
the Bondholders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section 12.12. LEGAL HOLIDAYS.
In any case where the date of any Payment Date, Redemption Date or any
other date on which principal of, or interest on, any Bond is proposed to be
paid shall not be a Business Day, then (notwithstanding any other provision of
the Bonds 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 nominal date of any such Payment Date, Redemption Date or other date
for the payment of principal of, or interest on, any Bond, as the case may be,
and no interest shall accrue for the period from and after any such nominal
date, provided such payment is made in full on such next succeeding Business
Day.
Section 12.13. GOVERNING LAW.
This Indenture and each Bond shall be construed in accordance with and
governed by the substantive laws of the State of New York applicable to
agreements made and to be performed in the State of New York and the
obligations, rights and remedies of the parties hereto and the Bondholders shall
be determined in accordance with such laws.
Section 12.14. COUNTERPARTS.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 12.15. RECORDING OF INDENTURE.
This Indenture is subject to recording in any appropriate public
recording office, such recording to be effected by the Issuer and at its expense
in compliance with any Opinion of Counsel delivered pursuant to Section 2.12(c)
or Section 3.06.
101
Section 12.16. ISSUER OBLIGATION.
No recourse may be taken, directly or indirectly, against (i) the Owner
Trustee, (ii) any incorporator, subscriber to the capital stock, stockholder,
officer or director of the Owner Trustee or of any predecessor or successor of
the Owner Trustee, (iii) any holder of a beneficial interest in the Issuer
(solely in its capacity as such), (iv) any incorporator, subscriber to the
capital stock, stockholder, partner, beneficiary, agent, officer, director,
employee, or successor or assign of a holder of a beneficial interest in the
Issuer, (v) the Seller or any Affiliate thereof (other than the Issuer) or (vi)
any incorporator, subscriber to the capital stock, stockholder, officer,
director or employee of the Trustee or any predecessor or successor of the
Trustee with respect to the Issuer's obligation with respect to the Bonds or the
obligation of the Issuer or the Trustee under this Indenture or any certificate
or other writing delivered in connection herewith or therewith.
Section 12.17. INSPECTION.
The Issuer agrees that, on reasonable prior notice, it shall permit any
representative of the Trustee, during the Issuer's normal business hours, to
examine all books of account, records, reports and other papers of the Issuer,
to make copies and extracts therefrom, to cause such books to be audited by
Independent Accountants selected by the Trustee, and to discuss its affairs,
finances and accounts with its officers, employees and Independent Accountants
(and by this provision the Issuer hereby authorizes its Accountants to discuss
with such representatives such affairs, finances and accounts), all at such
reasonable times and as often as may be reasonably requested. Any reasonable
expense incident to the exercise by the Trustee of any rights under this Section
12.17 shall be borne by the Issuer.
Section 12.18. USURY.
The amount of interest payable or paid on any Bond under the terms of
this Indenture shall be limited to an amount which shall not exceed the maximum
nonusurious rate of interest allowed by the applicable laws of the United States
or the State of New York (whichever shall permit the higher rate), which could
lawfully be contracted for, charged or received (the "Highest Lawful Rate"). In
the event any payment of interest on any Bond exceeds the Highest Lawful Rate,
the Issuer stipulates that such excess amount shall be deemed to have been paid
as a result of an error on the part of both the Trustee, acting on behalf of the
Holder of such Bond, and the Issuer, and the Holder receiving such excess
payment shall promptly, upon discovery of such error or upon notice thereof from
the Issuer or the Trustee, refund the amount of such excess or, at the option of
the Trustee, apply the excess to the payment of principal of such Bond, if any,
remaining unpaid.
Section 12.19. NO PETITION.
The Trustee, by entering into this Indenture, and each Bondholder, by
accepting a Bond, hereby covenant and agree that they shall not at any time
institute against the Depositor or the Issuer, or join in any institution
against the Depositor or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
102
any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Bonds, this Indenture or any of the Operative
Agreements.
103
IN WITNESS WHEREOF, each party has caused this Indenture to be executed
by its duly authorized officer or officers as of the day and year first above
written.
SEQUOIA MORTGAGE TRUST 6,
as Issuer
By: WILMINGTON TRUST COMPANY
not in its individual capacity but solely
as Owner Trustee
By:
-----------------------------------
Name:
Title:
DEUTSCHE BANK NATIONAL TRUST COMPANY,
as Trustee
By:
-------------------------------------
Authorized Officer
STATE OF DELAWARE )
) SS.:
COUNTY OF NEW CASTLE )
On the ____ day of __________ 200__, before me personally came
__________________________, to me known, who being by me duly sworn did depose
and say that she/he resides in _______________, that she/he is the
______________________ of __________________________, the corporation described
in and which executed the above instrument and that she/he signed her/his name
thereto by authority of the Board of Directors of said corporation.
[NOTARIAL SEAL]
-----------------------------
Notary Public
STATE OF _________________ )
) SS.:
COUNTY OF ________________ )
On the ____ day of __________ 200__, before me, a notary public in and
for said State, personally appeared ___________________________, known to me (or
proved to me on the basis of satisfactory evidence) to be a ______
______________ of ____________________________________, the ___________________
corporation that executed the within instrument, and also known to me (or proved
to me on the basis of satisfactory evidence) to be the persons who executed it
on behalf of said _____________________ corporation, and acknowledged to me that
such ___________________ corporation 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.
[NOTARIAL SEAL]
-----------------------------
Notary Public
EXHIBIT I
LETTER AGREEMENT WITH THE DEPOSITORY
EXHIBIT II
FORM OF FACE OF CLASS A BOND
EII-1
EXHIBIT III
FORM OF FACE OF CLASS X BOND
EIII-1
EXHIBIT IV
FORM OF FACE OF SUBORDINATE BONDS
EIV-1
EXHIBIT V
FORM OF FACE OF CLASS A-R BOND
EV-1
EXHIBIT VI
FORM OF REVERSE OF BONDS
EVI-1
EXHIBIT VII
FORM OF INVESTMENT LETTER FOR HOLDERS OF THE
PRIVATE BONDS
1. The Purchaser is acquiring the [Class X] [Class B-4] [Class B-5]
[Class B-6] Bond (the "Bond") as principal for its own account for the purpose
of investment [neither the Depositor nor any of its Affiliates need represent
that it is acquiring for purposes of investment] and not with a view to or for
sale in connection with any distribution thereof, subject nevertheless to any
requirement of law that the disposition of the Purchaser's property shall at all
times be and remain within its control.
2. The Purchaser has knowledge and experience in financial and
business matters and is capable of evaluating the merits and risks of its
investment in the Bonds and is able to bear the economic risk of such
investment. The Purchaser is an "accredited investor" within the meaning of Rule
501(a) under the rules and regulations of the Securities and Exchange Commission
under the Securities Act of 1933, as amended [Affiliates of the Depositor need
not make this representation]. The Purchaser has been given such information
concerning the Bond, the underlying mortgage loans and the Servicers as it has
requested.
3. The Purchaser will comply with all applicable federal and state
securities laws in connection with any subsequent resale by the Purchaser of the
Bond.
4. The Purchaser understands that the Bond has not been and will
not be registered under the Securities Act of 1933, as amended, or any state
securities laws and may be resold (which resale is not currently contemplated)
only if an exemption from registration is available, that neither the Depositor,
the Servicers nor the Trustee is required to register the Bond and that any
transfer must comply with Section 2.07 of the Indenture. In connection with any
resale of the Bond, the Purchaser shall not make any general solicitation or
advertisement.
5. The Purchaser agrees that it will obtain from any purchaser of
the Bond from it the same representations, warranties and agreements contained
in the foregoing paragraphs 1 through 4 and in this paragraph 5.
6. The Purchaser hereby directs the Trustee to register the Bond
acquired by the Purchaser in the name of its nominee as follows: ____________.
EVII-1
Very truly yours,
-----------------------------------
NAME OF PURCHASER
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EVII-2
EXHIBIT VIII
FORM OF TRANSFER AFFIDAVIT FOR CLASS A-R BOND
STATE OF )
): ss.
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as follows:
1. The undersigned is an officer of _____________________ (the
"Transferee"), a corporation duly organized and existing under the laws of the
State of Delaware and on behalf of which the undersigned makes this affidavit.
2. The Transferee is acquiring a beneficial ownership interest in
Sequoia Mortgage Trust 6, Collateralized Mortgage Bond, Class A-R (the "Class
A-R Bond"), issued pursuant to the Indenture, dated as of April 1, 2002 (the
"Indenture"), by and among Sequoia Mortgage Trust 6, as Issuer (the "Issuer")
and Deutsche Bank National Trust Company, as Trustee (the "Trustee").
Capitalized terms used, but not defined herein, shall have the meanings ascribed
to such terms in the Indenture. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee.
3. The Transferee is not, as of the date hereof, and will not be,
as of the date of the Transfer, a Disqualified Organization. The Transferee is
acquiring the Class A-R Bond either (i) for its own account or (ii) as nominee,
trustee or agent for another Person and has attached hereto an affidavit from
such Person in substantially the form as this affidavit attached hereto. The
Transferee has no knowledge that any such affidavit is false.
4. The Transferee has been advised of, and understands that: (i) a
tax shall be imposed on any Transfer to Persons that are Disqualified
Organizations; (ii) such tax is imposed on the transferor, or, if such Transfer
is through an agent (which includes a broker, nominee or middleman) for Persons
that are Disqualified Organizations, on the agent; and (iii) the Person
otherwise liable for the tax shall be relieved of liability for the tax if the
subsequent transferee furnished to such Person an affidavit that such subsequent
transferee is not a Disqualified Organization and, at the time of the Transfer,
such Person does not have actual knowledge that the affidavit is false.
5. The Transferee has been advised and understands that a tax shall
be imposed on a "pass-through entity" holding the Class A-R Bond if at any time
during the taxable year of the pass-through entity a Person that is a
Disqualified Organization is the record holder of an interest in such entity.
The Transferee understands that no tax will be imposed for any period for which
the record holder furnishes to the pass-through entity an affidavit stating that
the record holder is not a Disqualified Organization and the pass-through entity
does not have actual knowledge that such affidavit is false. (For this purpose,
a "pass-through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives and, except as may be provided in Treasury Regulations,
persons holding interests in pass-through entities as nominees for other
Persons.)
6. The Transferee has reviewed the provisions of Section 2.07 of
the Indenture, which is incorporated herein by reference, and understands the
legal consequences of the
EVIII-1
acquisition of the Class A-R Bond including, without limitations, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 2.07 of the Indenture. The Transferee
understands and agrees that any breach of any of the representations included
herein shall render the Transfer to the Transferee contemplated hereby null and
void.
7. The Transferee does not have the intention to impede the
assessment or collection of any income tax legally required to be paid with
respect to the Class A-R Bond and the Transferee hereby acknowledges that the
Class A-R Bond may generate tax liabilities in excess of the cash flow
associated with the Class A-R Bond and intends to pay such taxes associated with
the Class A-R Bond when it become due.
8. The Transferee hereby represents to and for the benefit of the
transferor that the Transferee intends and reasonably expects to have the
ability to pay any taxes associated with the holding of the Class A-R Bond as it
becomes due, fully realizing that it may incur tax liabilities in excess of any
cash flows generated by the Class A-R Bond. The Transferee has provided
financial statements or other financial information requested by the transferor
in connection with the transfer of the Class A-R Bond to permit the transferor
to assess the financial capability of the Transferee to pay any such taxes.
9. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to make a Transfer and in connection with
any Transfer by a Person for whom the Transferee is acting as nominee, trustee
or agent, and the Transferee will not make a Transfer or cause any Transfer to
any Person that the Transferee knows is a Disqualified Organization.
10. That the Transferee (i) is not a Non-U.S. Person or (ii) is a
Non-U.S. Person that holds the Class A-R Bond in connection with the conduct of
a trade or business in the United States and has furnished the transferor and
the Trustee with an effective Internal Revenue Service Form 4224 or successor
form at the time and in the manner required by the Code or (iii) is a Non-U.S.
Person that has delivered to both the transferor and the Trustee an opinion of a
nationally recognized tax counsel to the effect that the transfer of the Class
A-R Bond to it is in accordance with the requirements of the Code and the
regulation promulgated thereunder and that such transfer of the Class A-R Bond
will not be disregarded for federal income tax purposes.
11. The following information as to the Transferee is true and
correct:
Address:
Contact for Tax Matters:
Phone Number:
Form of Organization of Transferee:
Transferee's Federal Tax Identification Number:
Percentage of Residual Interest Acquired: __%
Price Paid for Residual Interest:
Date of Acquisition:
If security is being registered in the name of a nominee, please state
such name:
12. [That the Transferee has computed any consideration paid to it
to acquire the Class A-R Bond in accordance with proposed U.S. Treasury
Regulations Sections 1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) (or, after they have
been finalized, the comparable final
EVIII-2
regulations) by computing present values using a discount rate equal to the
applicable Federal rate prescribed by Section 1274(d) of the Code, compounded
semi-annually.]
or
[That the Transferee has computed any consideration paid to it to
acquire the Class A-R Bond in accordance with proposed U.S. Treasury Regulations
Sections 1.860E-1(c)(4)(iii) and 1.860E-1(c)(5) (or, after they have been
finalized, the comparable final regulations) by computing present values using a
discount rate at least equal to the rate at which the Transferee regularly
borrows, in the ordinary course of its trade or business, substantial funds from
unrelated third parties. The Transferee has provided all information necessary
to demonstrate to the transferor that it regularly borrows at such rate.](1)
--------------------------
(1) Insert appropriate paragraph.
EVIII-3
IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its _________________, by its
duly authorized officer this _____ day of _____________.
[NAME OF TRANSFEREE]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EVIII-4
STATE OF )
) ss.:
COUNTY OF )
Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the _____ of _______________________________, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the
Transferee.
Subscribed and sworn before me this _______ of ___________.
--------------------------------------
NOTARY PUBLIC
My commission expires the ___
day of ________________ 20__.
EVIII-5
EXHIBIT IX
ERISA REPRESENTATION LETTER
(FOR TRANSFERS OF CLASS A-R, CLASS X, CLASS B-4, CLASS B-5 AND CLASS B-6 BONDS)
The Purchaser is not an employee benefit plan or other retirement plan
or arrangement (a "Plan") subject to Section 406 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code") or a person acting on
behalf of such a Plan or arrangement or using the assets of such a Plan or
arrangement to acquire a [Class A-R] [Class X] [Class B-4] [Class B-5] [Class
B-6] Bond.
EXHIBIT X
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
MORTGAGE LOANS PURCHASED UNDER THE MASTER MORTGAGE LOAN PURCHASE
AGREEMENT DATED AS OF AUGUST 1, 2001 BETWEEN REDWOOD TRUST, INC. ("REDWOOD
TRUST") AND ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ CREDIT CORPORATION (THE
"SELLER/SERVICER") (THE "▇▇▇▇▇▇ AGREEMENT").
With respect to each Mortgage Loan, Redwood Trust hereby makes the
following representations and warranties. Such representations and warranties
speak as of the Closing Date, unless otherwise indicated. Capitalized terms are
as defined in this Exhibit X, the Indenture or the ▇▇▇▇▇▇ Agreement.
(i) The information set forth in the Mortgage Loan Schedule is true
and correct in all material respects;
(ii) As of the Closing Date, the Mortgage Loan is not delinquent more
than 29 days, the Mortgage Loan has never been delinquent for more than 59 days
and the Mortgage Loan has not been dishonored. To Redwood Trust's knowledge,
there are no material defaults under the terms of the Mortgage Loan. The
Seller/Servicer has not advanced funds, or induced or, solicited any advance of
funds from a party other than the owner of the Mortgaged Property subject to the
Mortgage, directly or indirectly, for the payment of any amount required by the
Mortgage Loan;
(iii) With respect to those Mortgage Loans which are required to
deposit funds into an escrow account for payment of taxes, assessments,
insurance premiums and similar items as they become due, all escrow deposits
have been collected, are under the control of the Seller/Servicer, and have been
applied by the Seller/Servicer to the payment of such items in a timely fashion,
in accordance with such Mortgage. There exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
met. With respect to those Mortgage Loans for which escrow deposits are not
required, to Redwood Trust's knowledge, there are no delinquent taxes or other
outstanding charges affecting the related Mortgaged Property which constitute a
lien on the related Mortgaged Property;
(iv) The terms of the Mortgage Note and the Mortgage have not been
impaired, waived, altered or modified in any respect, except by written
instruments contained in the Trustee Mortgage File, approved, if necessary, by
the insurer under any Primary Mortgage Insurance Policy and recorded in all
places necessary to maintain the first priority of the lien, the substance of
which waiver, alteration or modification is reflected on the Mortgage Loan
Schedule. No Mortgagor has been released, in whole or in part, except by
operation of law or in connection with an assumption agreement which assumption
agreement is part of the Trustee Mortgage File and the terms of which are
reflected in the Mortgage Loan Schedule;
(v) Neither the Mortgage Note nor the Mortgage is subject to any
right of rescission, set-off, counterclaim or defense, including the defense of
usury, nor will the operation of any of the terms of the Mortgage Note and the
Mortgage, or the exercise of any right thereunder, render the Mortgage
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense, including the defense of usury and, to Redwood
Trust's knowledge, no such right of recission, set-off, counterclaim or defense
has been asserted by any Person with respect thereto;
EX-1
(vi) All buildings upon the Mortgaged Property are required to be
insured by a generally acceptable insurer against loss by fire, hazards of
extended coverage and such other hazards as are customarily included in extended
coverage in the area where the Mortgaged Property is located, pursuant to
standard property insurance policies in compliance with the Seller/Servicer's
policies as from time to time in effect. On the date of origination, all such
property policies were in effect, and contained a standard mortgage clause
naming the Seller/Servicer or the originator of the Mortgage Loan and their
respective successors in interest as mortgagee; to the knowledge of Redwood
Trust, such policy and clause or a replacement is in effect and, to Redwood
Trust's knowledge, all premiums due thereon have been paid. If the Mortgaged
Property is located in an area identified by the Federal Emergency Management
Agency as having special flood hazards under the National Flood Insurance Act of
1994, as amended, such Mortgaged Property is covered by flood insurance in the
amount required under the National Flood Insurance Act of 1994. The Mortgage
obligates the Mortgagor to maintain such insurance and authorizes the holder of
the Mortgage to maintain such insurance at Mortgagor's cost and expense should
the Mortgagor fail to do so and to seek reimbursement therefor from the
Mortgagor;
(vii) At the time of origination of such Mortgage Loan and thereafter,
all requirements of any federal or state law, including usury, truth-in-lending,
real estate settlement procedures, consumer credit protection, equal credit
opportunity or disclosure laws required to be complied with by the
Seller/Servicer as the originator of the Mortgage Loan and applicable to the
Mortgage Loan have been complied with in all material respects;
(viii) The Mortgage has not been satisfied as of the Closing Date,
canceled or subordinated, in whole, or rescinded, and the Mortgaged Property has
not been released from the lien of the Mortgage, in whole or in part (except for
a release that does not materially impair the security of the Mortgage Loan or a
release the effect of which is reflected in the Loan-to-Value Ratio for the
Mortgage Loan as set forth in the Mortgage Loan Schedule);
(ix) Ownership of the Mortgaged Property is held in fee simple or
leasehold estate. With respect to Mortgage Loans that are secured by a leasehold
estate: (i) the lease is valid, in full force and effect, and conforms to all of
▇▇▇▇▇▇ Mae's requirements for leasehold estates; (ii) all rents and other
payments due under the lease have been paid; (iii) the lessee is not in default
under any provision of the lease; (iv) the term of the lease exceeds the
maturity date of the related Mortgage Loan by at least five (5) years; and (v)
the terms of the lease provide a Mortgagee with an opportunity to cure any
defaults. Except as permitted by the fourth sentence of this paragraph (ix), the
Mortgage is a valid, subsisting and enforceable first lien on the Mortgaged
Property securing the Mortgage Note's original principal balance. Such lien is
free and clear of all adverse claims, liens and encumbrances having priority
over the first lien of the Mortgage, subject only to (1) the lien of
non-delinquent current real property taxes and assessments not yet due and
payable, (2) liens, covenants, conditions and restrictions, rights of way,
easements and other matters reflected in the public record as of the date of
recording which are acceptable to mortgage lending institutions generally, or
which are referred to (specifically or generally) in the lender's title
insurance policy delivered to the originator of the Mortgage Loan and either (A)
which are referred to or otherwise considered in such title insurance policy or
the appraisal made for the originator of the Mortgage Loan, or (B) which do not
in the aggregate adversely affect the appraised value of the Mortgaged Property
as set forth in such appraisal, and (3) other matters to which like properties
are commonly subject which do not in the aggregate materially interfere with the
benefits of the security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property. With
respect to
EX-2
each Cooperative Loan, the security instruments create a valid, enforceable and
subsisting first priority security interest in the Cooperative Apartment
securing the related Mortgage Note subject only to (a) the lien of the related
cooperative for unpaid assessments representing the Mortgagor's pro rata share
of payments for a blanket mortgage, if any, current and future real property
taxes, insurance premiums, maintenance fees and other assessments, and (b) other
matters to which the collateral is commonly subject which do not materially
interfere with the benefits of the security intended to be provided; provided,
however, that the related proprietary lease for the Cooperative Apartment may be
subordinated or otherwise subject to the lien of a Mortgage on the cooperative
building;
(x) The Mortgage Note and the related Mortgage are genuine and are
in proper form to constitute a legal, valid and binding obligation of the maker
thereof in all material respects, enforceable in accordance with its terms,
subject to bankruptcy, insolvency and other laws of general application
affecting the rights of creditors, and general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law), and assuming that the maker thereof had the legal capacity to enter into
the Mortgage Loan and to execute and deliver the Mortgage Note and the Mortgage.
The Mortgage Note and the Mortgage have been duly and properly executed by such
parties. An obligor of the debt evidenced by the Mortgage Note is a natural
person. The proceeds of the Mortgage Loan have been fully disbursed and there is
no requirement for future advances thereunder, and any and all requirements in
the Mortgage as to completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with;
(xi) Redwood Trust has good title to, and the full right to transfer
and sell, the Mortgage Loan and the Mortgage Note free and clear of any
encumbrance, equity, lien, pledge, charge, claim or security interest including,
to the knowledge of Redwood Trust, any lien, claim or other interest arising by
operation of law;
(xii) The Mortgage Loan is covered by either an ALTA lender's title
insurance policy or other generally acceptable form of policy or insurance
acceptable to ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, issued by a title insurer acceptable to
▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring (subject to the exceptions contained
in paragraph (ix) (1), (2) and (3) above) to the Seller/Servicer, its successors
and assigns, the first priority lien of the Mortgage in the original principal
amount of the Mortgage Loan. The Seller/Servicer is the sole insured of such
lender's title insurance policy, such title insurance policy has been duly and
validly endorsed to the Trustee (as defined in the Indenture) or the assignment
to such Trustee of the Seller/Servicer's interest does not require the consent
of or notification to the insurer and such lender's title insurance policy is in
full force and effect and will be in full force and effect upon the consummation
of the transactions contemplated by the ▇▇▇▇▇▇ Agreement. To Redwood Trust's
knowledge, no claims have been made under such lender's title insurance policy,
and no prior holder of the related Mortgage has done, by act or omission,
anything which would impair the coverage of such lender's title insurance
policy;
(xiii) There is no default, breach, violation or event of acceleration
existing under the Mortgage or the related Mortgage Note and, to Redwood Trust's
knowledge, no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event permitting acceleration, except for any Mortgage Loan Payment
which is not late by more than 30 days, and the Seller/Servicer has not waived
any default, breach, violation or event permitting acceleration;
EX-3
(xiv) To Redwood Trust's knowledge, all material improvements subject
to the Mortgage, lie wholly within the boundaries and building restrictions
lines of the Mortgaged Property (and wholly within the project with respect to a
condominium unit) and no improvements on adjoining properties materially
encroach upon the Mortgaged Property, except those which are insured against by
the title insurance policy referred to in paragraph (xii) above and all
improvements on the property comply with all applicable zoning and subdivision
laws and ordinances;
(xv) The Mortgage Loan (unless designated as originated by others on
any Mortgage Loan Schedule) was originated by the Seller/Servicer (or the
corporate predecessor of the Seller/Servicer), and at the time of each such
origination of such Mortgage Loan the Seller/Servicer was (unless designated as
"originated prior to HUD approval" on any Mortgage Loan Schedule) a mortgagee
approved by the Secretary of Housing and Urban Development (the "Secretary")
pursuant to Sections 203 and 211 of the National Housing Act. Each such Mortgage
Loan was underwritten in accordance with the Underwriting Guide as in effect at
the time of origination, except to the extent the Seller/Servicer believed as
such time that a variance from such Underwriting Guide was warranted by
compensating factors. The Mortgage contains the usual and customary provision of
the Seller/Servicer, if any, in the applicable jurisdiction at the time of
origination for the acceleration of the payment of the unpaid principal balance
of the Mortgage Loan if the related Mortgaged Property is sold without the prior
consent of the Mortgagee thereunder;
(xvi) The Mortgaged Property at origination or acquisition was and, to
Redwood Trust's knowledge, is free of material damage and waste and at
origination there was, and to Redwood Trust's knowledge there is, no proceeding
pending for the total or partial condemnation thereof;
(xvii) The related Mortgage contains customary and enforceable
provisions such as to render the rights and remedies of the holder thereof
adequate for the realization against the Mortgaged Property of the benefits of
the security provided thereby;
(xviii) If the Mortgage constitutes a deed of trust, a trustee, duly
qualified if required under applicable law to act as such, has been properly
designated and currently so serves as named in the Mortgage, and no fees or
expenses are or will become payable to the trustee under the deed of trust,
except in connection with a trustee's sale or attempted sale after default by
the Mortgagor;
(xix) With respect to the Mortgage Loan, there is an appraisal on a
▇▇▇▇▇▇ ▇▇▇-approved form (or a narrative residential appraisal) of the related
Mortgaged Property that conforms to the applicable requirements of the Financial
Institutions Reform Recovery and Enforcement Act of 1989 and that was signed
prior to the approval of such Mortgage Loan application by a qualified
appraiser, appointed by the Seller/Servicer or the originator of such Mortgage
Loan, as appropriate, who has no interest, direct or indirect, in the Mortgaged
Property or in any loan made on the security thereof, and whose compensation is
not affected by the approval or disapproval of such Mortgage Loan;
(xx) The Mortgage Loan contains no "subsidized buydown" or graduated
payment features;
(xxi) The Mortgaged Property has a single-family (one to four-unit)
dwelling residence erected thereon, or is an individual condominium unit in a
condominium, or a Cooperative Apartment or an individual unit in a planned unit
development or in a de minimis planned unit
EX-4
development as defined by ▇▇▇▇▇▇ Mae. No such residence is a mobile home or a
manufactured dwelling which is not permanently attached to the land;
(xxii) Except as set forth on the Mortgage Loan Schedule the Mortgage
Loan is not a Converted Mortgage Loan. The Mortgage Loan does not provide for
negative amortization;
(xxiii) The Mortgage Loan does not have an original term in excess of
thirty (30) years and one month;
(xxiv) If the Mortgage Loan is a Cooperative Loan, (a) there is no
provision in any proprietary lease which requires the Mortgagor to offer for
sale the cooperative shares owned by such Mortgagor first to the cooperative,
(b) there is no prohibition in the proprietary lease against pledging the
cooperative shares or assigning the proprietary lease, (c) to Redwood Trust's
knowledge, the Cooperative Apartment is lawfully occupied under applicable law,
and (d) to Redwood Trust's knowledge, all inspections, licenses and certificates
required to be made or issued with respect to all occupied portions of the
Cooperative Apartment and the related project have been made or obtained from
the appropriate authorities;
(xxv) There has been no fraud, material misrepresentation or deceit on
the part of any Mortgagor or any third party in connection with the Mortgage
Loan (including the application, processing, appraisal and origination) which
would cause a material economic loss to the owner of the Mortgage Loan,
including, but not limited to, material misrepresentation of such Mortgagor's
income, funds on deposit or employment;
(xxvi) The origination, collection and other servicing practices used
by the Seller/Servicer with respect to the Mortgage Loans are in compliance with
all material requirements of applicable laws and regulations;
(xxvii) The Seller/Servicer shall cause to be maintained for each
Mortgage Loan primary hazard insurance with extended coverage on the related
mortgage property in an amount equal to the lessor of (i) full replacement value
of improvements and (ii) the outstanding principal balance;
(xxviii) Redwood Trust has no knowledge of any homestead or other
exemption available to the mortgagor which would interfere with the right to
sell the mortgage property at trustee's sale or the right to foreclose the
mortgage;
(xxix) At the time of origination of such Mortgage Loan, and
thereafter, all material requirements of any federal, state or local law
including usury, truth-in-lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity or disclosure laws required to be
complied with by the Seller/Servicer as the originator of the Mortgage Loan have
been complied with in all material respects; and
(xxx) The Additional Collateral Mortgage Loans are insured under the
terms and provisions of the Surety Bond subject to the limitations set forth
therein. The Seller/Servicer will deliver to the Surety Bond issuer an
"Assignment and Notice of Transfer" in the form of Attachment to the Surety
Bond, or any other similar instrument required to be delivered under the Surety
Bond, executed by the Seller/Servicer and Redwood Trust, and that all other
requirements for transferring coverage under the Surety Bond in respect of such
Additional Collateral Mortgage Loans to the Trustee (as defined in the
Indenture) shall be complied with.
EX-5
EXHIBIT XI
LIST OF SERVICING AGREEMENTS
The Master Servicing Agreement between Redwood and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ Credit Corporation, dated August 1, 2001, as modified by the related
Acknowledgements.
EXHIBIT XII
LIST OF PURCHASE AGREEMENTS
The Master Mortgage Loan Purchase Agreement between Redwood and ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Credit Corporation, dated August 1, 2001, as modified by the
related Acknowledgements.
EXHIBIT XIII
LIST OF LIMITED PURPOSE SURETY BONDS
Ambac Assurance Corporation Surety Bond No. AB0240BE, issued March 17,
1999, for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Credit Corporation loans.
