================================================================================
EX 4.2
EQCC ASSET BACKED CORPORATION,
Depositor
and
[TRUSTEE],
Trustee
and
as
Securities Intermediary
TRUST AGREEMENT
Dated as of [_______ __, 2001]
EQCC Asset Backed Trust [2001-1]
================================================================================
TABLE OF CONTENTS
ARTICLE I DEFINITIONS...................................................................................... 1
SECTION 1.1 Defined Terms......................................................................... 1
ARTICLE II CONVEYANCE OF THE UNDERLYING CERTIFICATES; ORIGINAL ISSUANCE OF CERTIFICATES.................... 10
SECTION 2.1 Conveyance of the Underlying Certificates............................................. 10
SECTION 2.2 Issuance of Certificates Evidencing Interests in the Trust Fund...................... 12
SECTION 2.3 Representations, Warranties and Covenants of the Depositor with
Respect to the Underlying Certificates................................................ 12
ARTICLE III ADMINISTRATION OF THE UNDERLYING CERTIFICATES; PAYMENTS AND REPORTS TO CERTIFICATEHOLDERS...... 13
SECTION 3.1 Administration of the Trust Fund and the Underlying Certificates...................... 13
SECTION 3.2 Collection of Monies.................................................................. 13
SECTION 3.3 Establishment of Accounts............................................................. 14
SECTION 3.4 Deposits and Collections with Respect to the Accounts................................. 17
SECTION 3.5 Payments.............................................................................. 18
SECTION 3.6 Statements to Certificateholders...................................................... 19
ARTICLE IV THE CERTIFICATES................................................................................ 20
SECTION 4.1 The Certificates...................................................................... 20
SECTION 4.2 Regular Certificates.................................................................. 21
SECTION 4.3 Registration of Transfer and Exchange of Certificates................................. 22
SECTION 4.4 Restrictions on Transfer.............................................................. 23
SECTION 4.5 Mutilated, Destroyed, Lost or Stolen Certificates..................................... 24
SECTION 4.6 Persons Deemed Owners................................................................. 25
ARTICLE V THE TRUSTEE...................................................................................... 25
SECTION 5.1 Duties of Trustee..................................................................... 25
SECTION 5.2 Certain Matters Affecting the Trustee................................................. 26
SECTION 5.3 Trustee Not Liable for Certificates................................................... 28
SECTION 5.4 Trustee May Own Certificates.......................................................... 28
SECTION 5.5 Trustee's Fees and Expenses........................................................... 28
SECTION 5.6 Eligibility Requirements for Trustee.................................................. 28
SECTION 5.7 Resignation and Removal of the Trustee................................................ 29
SECTION 5.8 Successor Trustee..................................................................... 30
SECTION 5.9 Merger or Consolidation of Trustee.................................................... 30
SECTION 5.10 Appointment of Co-Trustee or Separate Trustee......................................... 30
SECTION 5.11 Appointment of Office or Agency....................................................... 31
SECTION 5.12 Compliance with Withholding Requirements.............................................. 31
SECTION 5.13 Trustee May Enforce Claims Without Possession of Certificates......................... 32
ARTICLE VI TERMINATION..................................................................................... 00
-x-
XXXXXXX 0.0 Xxxxxxxxxxx Xxxx Xxxxxxxxxx or Liquidation of All Underlying Certificates............. 32
SECTION 6.2 Additional Termination Requirements................................................... 33
ARTICLE VII THE DEPOSITOR.................................................................................. 34
SECTION 7.1 Liability of the Depositor............................................................ 34
SECTION 7.2 The Depositor's Representations and Warranties........................................ 34
SECTION 7.3 Corporate Existence................................................................... 36
SECTION 7.4 Limitation on Liability of the Depositor and Others................................... 36
SECTION 7.5 Protection of Trust Fund.............................................................. 36
ARTICLE VIII REMIC TAX PROVISIONS.......................................................................... 37
SECTION 8.1 REMIC Administration.................................................................. 37
SECTION 8.2 Prohibited Activities................................................................. 38
ARTICLE IX MISCELLANEOUS PROVISIONS........................................................................ 39
SECTION 9.1 Amendment............................................................................. 39
SECTION 9.2 Counterparts.......................................................................... 40
SECTION 9.3 Limitation on Rights of Certificateholders............................................ 40
SECTION 9.4 Governing Law......................................................................... 41
SECTION 9.5 Notices............................................................................... 41
SECTION 9.6 Severability of Provisions............................................................ 42
SECTION 9.7 Successors and Assigns................................................................ 42
SECTION 9.8 Article and Section Headings.......................................................... 42
Signatures
Acknowledgments
Exhibits
Exhibit A Form of Class A Certificates
Exhibit B Form of Class IO Certificates
Exhibit C Form of Class R Certificates
Exhibit D Underlying Certificate Schedule
Exhibit E Form of Rule 144A Investment Agreement
Exhibit F Form of Residual Transferee Agreement
Exhibit G Form of Benefit Plan Affidavit
-ii-
THIS TRUST AGREEMENT, dated as of ______________, 200__, is made with
respect to the formation of EQCC Asset Backed Trust 2001-[__] (the "Trust") by
and between EQCC ASSET BACKED CORPORATION, a Delaware corporation, as depositor
(the "Depositor") and [Trustee], a [____________] banking corporation, as
trustee and securities intermediary (the "Trustee").
PRELIMINARY STATEMENT
The Trust has been organized to issue securities with an aggregate initial
principal amount of $[_______], to be known as the EQCC Asset Backed
Certificates, Series [2001-1] (the "Certificates "). The Certificates consist
of [four] classes that in the aggregate evidence the entire beneficial ownership
interest in the Trust.
In consideration of the mutual agreements herein contained, the Depositor
and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Defined Terms.
-------------
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:
Affiliate: As to any specified Person, any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
Agreement: This Trust Agreement and all amendments hereof, including all
Exhibits hereto.
Beneficial Owner: With respect to a Certificate, the Person who is
registered as owner of that Certificate in the books of the Depository for that
Certificate or in the books of a Person maintaining an account with such
Depository.
Benefit Plan Affidavit: An affidavit substantially in the form of Exhibit
-------
G hereto.
-
Benefit Plan Opinion: An Opinion of Counsel to the effect that a proposed
transfer of a Certificate will not (a) cause any of the assets of the Trust to
be regarded as "plan assets" for purposes of the Plan Asset Regulations, (b)
give rise to any fiduciary duty under ERISA on the part of the Depositor, the
Trustee or the Trust's Tax Matters Person, if any, or (c) be treated as, or
result in, a "prohibited transaction" under section 406 or section 407 of ERISA
or under section 4975 of the Code. The cost of obtaining a Benefit Plan Opinion
shall not be borne by the Depositor or the Trustee.
-1-
Business Day: Any day other than (i) a Saturday or Sunday or (ii) a day on
which banking institutions in the States of [_______], New York or Florida are
authorized or obligated by law or executive order to be closed.
Certificate: Any of the Class A, Class IO or Class R Certificates.
Certificateholder or Holder: The person in whose name a Certificate is
registered in the Certificate Register, except that solely for the purpose of
giving any consent or exercising any Voting Rights pursuant to this Agreement,
any Certificate registered in the name of the Depositor or any affiliate thereof
shall be deemed not to be Outstanding or counted in any way.
Certificate Account: The trust account or accounts, which shall at all
times be Eligible Accounts, created and maintained by the Trustee pursuant to
Section 3.3. Funds deposited in the Certificate Account shall be held in trust
-----------
for the Certificateholders for the uses and purposes set forth in Article III
hereof.
Certificate Balance: With respect to any class of Certificates, on any
date of determination, the initial principal amount, if any, of such
Certificate, less the amount, if any, applied to reduce the principal amount
thereof.
Certificate Registrar and Certificate Register: Shall each have the
meanings provided in Section 4.3.
-----------
Class A Certificates : The Class A-1 Certificates and the Class A-2
Certificates.
Class A Underlying Certificates: The EQCC Asset Backed Certificates,
Series [2001-A], Class A.
Class A-1 Certificates : The EQCC Asset Backed Certificates, Series [2001-
1], Class A-1 Certificates, which shall be "regular interests" in the Trust
REMIC within the meaning of Code section 860G(a)(1). The Class A-1 Certificates
shall have an initial Certificate Balance of $[___________], and shall bear
interest at the rate of [__]% per annum. For purposes of Treasury Regulation
section 1.860G-1(a)(4), the latest possible maturity date of the Class A-1
Certificates is [___________].
Class A-2 Certificates : The EQCC Asset Backed Certificates, Series 2001-
1], Class A-2 Certificates, which shall be "regular interests" in the Trust
REMIC within the meaning of Code section 860G(a)(1). The Class A-2 Certificates
shall have an initial Certificate Balance of $[___________], and shall bear
interest at the rate of [__]% per annum. For purposes of Treasury Regulation
section 1.860G-1(a)(4), the latest possible maturity date of the Class A-2
Certificates is [___________].
Class IO Certificates : The EQCC Asset Backed Certificates, Series [2001-
1], Class IO Certificates, which shall be "regular interests" in the Trust REMIC
within the meaning of Code section 860G(a)(1). The Class IO Certificates shall
have an initial Notional Balance of $[___________], and shall bear interest at
the rate of [__]% per annum. For purposes of Treasury Regulation section
1.860G-1(a)(4), the latest possible maturity date of the Class IO Certificates
is [___________].
-2-
Class R Certificates : The EQCC Asset Backed Certificates, Series [2001-
1], Class R Certificates, which shall be the "residual interest" in the Trust
REMIC within the meaning of Code section 860G(a)(2). The Class R Certificates
shall not have any Certificate Balance or stated interest rate.
Closing Date: [_________, 2001].
Code: The Internal Revenue Code of 1986, as amended.
Corporate Trust Office: With respect to the Trustee, the principal office
at which at any particular time the corporate trust business of the Trustee
shall be principally administered, which offices at the Closing Date are located
at [__________________________].
Cut-off Date: [_________, 2001].
Depositor: EQCC Asset Backed Corporation, a Delaware corporation, or its
successor in interest.
Depository: Initially, The Depository Trust Company, the nominee of which
is Cede & Co. The Depository shall at all times constitute a "clearing
corporation" as defined in Section 8-102(3) of the Uniform Commercial Code of
the State of New York.
Depository Participant: A broker, dealer, bank, 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.
Disqualified Organization: Either (a) the United States, (b) any state or
political subdivision thereof, (c) any foreign government, (d) any international
organization, (e) any agency or instrumentality of any of the foregoing, (f) any
organization (other than a cooperative described in section 521 of the Code)
that is exempt from federal income taxation (including taxation under the
unrelated business taxable income provisions of the Code), (g) any organization
described in section 1381(a)(2)(C) of the Code, or (h) an "electing large
partnership" within the meaning of Code section 775, or (i) any other entity
identified as a disqualified organization by legislation enacted or
administrative pronouncement in effect as of the time of the most recent
transfer of the Class R Certificates. A corporation will not be treated as an
instrumentality of the United States or any state or political subdivision
thereof if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such governmental unit.
Distribution Date: The 25th day of any month, or if such 25th day is not a
Business Day, the first Business Day immediately following, which is the date
each month on which payments are made to holders of the Underlying Certificates
in accordance with the Pooling and Servicing Agreement.
Distribution Date Statement: With respect to any Underlying Certificate
and any Payment Date, the monthly remittance report forwarded to the Holder of
such Underlying Certificate with respect to such Distribution Date pursuant to
the Pooling and Servicing Agreement.
-3-
Eligible Account: Either (A) a segregated account or segregated accounts
maintained with an institution whose deposits are insured by the Bank Insurance
Fund or the Savings Association Insurance Fund of the FDIC, (x) the unsecured
and uncollateralized debt obligations of which shall be rated "A" or better by
S&P or have the highest short-term rating by S&P and (y) the unsecured and
uncollateralized debt obligations of which shall be rated "A-1" or better by
Xxxxx'x and have the highest short-term rating by Xxxxx'x and which is either
(i) a federal savings and loan association duly organized, validly existing and
in good standing under the federal banking laws, (ii) an institution duly
organized, validly existing and in good standing under the applicable banking
laws of any state, (iii) a national banking association duly organized, validly
existing and in good standing under the federal banking laws, (iv) a principal
subsidiary of a bank holding company, or (v) approved in writing by the Rating
Agencies or (B) a segregated trust account or accounts maintained with the
corporate trust department of a federal or state chartered depository
institution or trust company, having capital and surplus of not less than
$50,000,000, acting in its fiduciary capacity, and has a rating from Xxxxx'x and
S&P for long-term deposits of at least "Baa3" and "BBB," respectively. Any
Eligible Accounts maintained with the Trustee shall conform to the preceding
clause (B).
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
FDIC: The Federal Deposit Insurance Corporation or any successor.
Independent: When used with respect to any specified Person, such a Person
who (i) is in fact independent of the Depositor, (ii) does not have any direct
financial interest in the Depositor or in an Affiliate of the Depositor, and
(iii) is not connected with the Depositor as an officer, employee, promoter,
underwriter, trustee, partner, director or person performing similar functions.
Interest Amounts: All amounts received in respect of interest on the
Underlying Certificates.
Monthly Interest: With respect to any Payment Date, an amount of interest
equal to 1/12 of the amount determined by multiplying the Certificate Balance of
the Class A Certificates immediately prior to such Payment Date by [_______].
Xxxxx'x: Xxxxx'x Investor's Service, Inc., or its successor.
Mortgage Loans: With respect to any Underlying Certificate, the Mortgage
Loans in which such Underlying Certificate evidences a beneficial ownership
interest.
Non-United States Person: Any Person other than a United States Person.
Notice of Termination: Any of the notices given by the Trustee pursuant to
Section 6.1.
-----------
Notional Balance: With respect to the Class IO Certificates, the amount
used to determine interest payments. The Notional Balance does not represent
any right to receive principal payments.
NY UCC: The Uniform Commercial Code as in effect in the State of New York.
-4-
Officer's Certificate: A certificate signed by the President or a Vice
President or an Assistant Vice President of the Depositor or the Trustee, as
required by this Agreement or a related transaction document.
Opinion of Counsel: A written opinion of counsel delivered hereunder or
under any transaction document, reasonably acceptable to the Trustee, and
experienced in matters relating to the subject of such opinion; except that any
opinion of counsel relating to (a) the qualification of any Trust REMIC as a
REMIC or (b) compliance with the REMIC Provisions must be an opinion of counsel
who (i) is in fact independent of the Depositor, (ii) does not have any direct
financial interest or any material indirect financial interest in the Depositor
or in an affiliate thereof and (iii) is not connected with the Depositor as an
officer, employee, director or person performing similar functions.
Outstanding Certificates: With respect to the Certificates, as of the date
of determination, all Certificates theretofore executed and delivered under this
Agreement except:
(a) Certificates theretofore canceled by the Trustee or delivered to the
Trustee for cancellation; and
(b) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered pursuant to this Agreement unless
proof satisfactory to the Trustee is presented that any such Certificates are
held by a holder in due course.
Ownership Interest: As to any Certificate or Underlying Certificate, any
ownership, security interest or "security entitlement" (as defined in Article 8
of the NY UCC) in such Certificate or Underlying Certificate, including any
interest in such Certificate or Underlying Certificate as the Holder or
"entitlement holder" (as defined in Article 8 of the NY UCC) thereof and any
other interest therein, whether direct or indirect, legal or beneficial, as
owner or as pledgee.
Payment Date. The second Business Day following the Business Day occurring
on or after the 25th of each month. The first Payment Date will be [_________,
2001].
Percentage Interest: With respect to any Class A Certificate, the
percentage derived from dividing the initial Certificate Balance of such
Certificate by the initial Certificate Balance of the Class A Certificates; with
respect to any Class IO Certificate, the percentage derived from dividing the
initial Notional Balance of such Certificate by the initial Notional Balance of
the Class IO Certificates; with respect to any Class R Certificate, the
undivided percentage ownership interest evidenced by such Certificate, as stated
on the face of such Class R Certificate, respectively.
Permitted Instruments: As used herein, Permitted Instruments shall include
the following:
(i) (A) direct general obligations of, or obligations fully and
unconditionally guaranteed as to the timely payment of principal and
interest by, the United States or any agency or instrumentality thereof,
provided such obligations are backed by the full faith and credit of the
United States, and (B) Federal Housing Administration debentures,
-5-
FHLMC senior debt obligations, and FNMA senior debt obligations assigned
having the highest long-term rating by S&P and Xxxxx'x, but excluding any
of such securities described in clauses (A) and (B) whose terms do not
provide for payment of a fixed dollar amount upon maturity or call for
redemption;
(ii) federal funds, certificates of deposit, time and demand
deposits and banker's acceptances (in each case having maturities of not
more than 365 days) of any bank or trust company incorporated under the
laws of the United States or any state thereof, provided that (A) the
short-term debt obligations of such bank or trust company at the date of
acquisition thereof have been rated "A-1" or better by S&P and (B) the
short-term and long-term debt obligations of such bank or trust company at
the date of acquisition thereof have been rated Prime-1 and "A1" or better,
respectively, by Xxxxx'x;
(iii) deposits of any bank or savings and loan association which has
combined capital, surplus and undivided profits of at least $3,000,000,
which deposits are not in excess of the applicable limits insured by the
Bank Insurance Fund or the Savings Association Insurance Fund of the FDIC,
provided that the long-term deposits of such bank or savings and loan
association are rated at least "BBB" by S&P and "Baa3" by Xxxxx'x;
(iv) commercial paper (having original maturities of not more than
180 days) rated "A-1+" or better by S&P and Prime-1 by Xxxxx'x;
(v) investments in money market funds rated "AAAm" or "AAAm-G" by
S&P and "Aaa" by Xxxxx'x;
(vi) investments in Permitted Instruments on an overnight basis in
investment accounts maintained at the Trustee; provided, however, that any
-------- -------
such account shall be an Eligible Account; and
(vii) any other obligation or security acceptable to the Rating
Agencies (as certified by a letter from each Rating Agency to the Trustee);
provided, that no instrument described hereunder shall be a Permitted Instrument
--------
if it evidences either the right to receive (a) only interest with respect to
the obligations underlying such instrument or (b) both principal and interest
payments derived from obligations underlying such instrument and the interest
and principal payments with respect to such instrument provided a yield to
maturity at par greater than 120% of the yield to maturity at par of the
underlying obligations; and provided, further, that no instrument described
-------- -------
hereunder may be purchased at a price greater than par if such instrument may be
prepaid or called at a price less than its purchase price prior to stated
maturity; and provided, further that no instrument shall be a Permitted
-------- -------
Instrument unless such instrument is a "permitted instrument" within the meaning
of Section 860G(a)(5) of the Code.
Person: Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, national
banking association, unincorporated organization or government or any agency or
political subdivision thereof.
-6-
Plan: Any employee benefit plan or retirement arrangement, including
individual retirement accounts and annuities, Xxxxx plans and collective
investment funds in which such plans, accounts, annuities or arrangements are
invested, that are described in or subject to the Plan Asset Regulations, ERISA
or corresponding provisions of the Code.
Plan Asset Regulations: The Department of Labor regulations set forth in
29 C.F.R. (S) 2510.3-101.
Plan Investor: A Plan, a Person acting on behalf of a Plan or a Person
using the assets of a Plan.
Pooling and Servicing Agreement: With respect to any Underlying
Certificate and the assets in which such Underlying Certificate evidences a
beneficial ownership interest, the pooling and servicing agreement or other
governing agreement, together with all exhibits thereto, pursuant to which such
Underlying Certificate was issued.
Proceeding: Any suit in equity, action at law or other judicial or
administrative proceeding.
Qualified Institutional Buyer: Any "qualified institutional buyer" as
defined in clause (a)(1) of Rule 144A.
Rating Agency: Collectively, Xxxxx'x and S&P.
Record Date: With respect to any Payment Date, the last day of the
calendar month preceding the month in which the related Payment Date occurs.
Regular Certificates: Each of the Certificates other than the Class R
Certificates.
Regulations: The regulations promulgated under the Code by the Treasury.
REMIC: A "real estate mortgage investment conduit," within the meaning of
Section 860D of the Code.
REMIC Provisions: Provisions of the Code relating to real estate mortgage
investment conduits, which appear at sections 860A through 860G of the Code,
related Code provisions, and Regulations (whether in proposed, temporary or
final form), announcements and rulings thereunder, as the foregoing may be in
effect from time to time.
Reserve Account: The trust account or accounts, which shall at all times
be Eligible Accounts, created and maintained by the Trust pursuant to Section
-------
3.3. Funds deposited in the Reserve Account shall be held in trust for the
---
Certificateholders for the uses and purposes set forth in Article III hereof.
-----------
The Reserve Account shall not be an asset of the Trust REMIC created hereunder.
Residual Transferee Agreement: A certification and agreement required to
be executed and delivered by the prospective transferee of a Residual
Certificate pursuant to Section 4.4(b) hereof, substantially in the form of
--------------
Exhibit F hereof.
---------
-7-
Responsible Officer: When used with respect to the Trustee or the
Certificates Administrator, any officer assigned to the Corporate Trust Office
(or any successor thereto) with direct responsibility for the administration of
this Agreement, including any Vice President, Assistant Vice President, Senior
Trust Officer, Trust Officer, Assistant Trust Officer, any Assistant Secretary,
any trust officer or any other officer of such Trustee customarily performing
functions similar to those performed by any of the above designated officers and
to whom, with respect to a particular matter, such matter is referred because of
such officer's knowledge of and familiarity with the particular subject. When
used with respect to the Depositor, the President or any Vice President,
Assistant Vice President, or any Secretary or Assistant Secretary authorized to
perform the actions required, including, without limitation, each Person whose
name appears on a list of Responsible Officers furnished to the Trustee on the
Closing Date, as such list may be amended from time to time.
Rule 144A: Rule 144A under the Securities Act, as in effect from time to
time.
Rule 144A Investment Agreement: An agreement, in substantially the form of
Exhibit F hereto, required to be delivered with respect to a transfer of a Class
---------
R Certificate.
S&P: Standard & Poor's, a division of The XxXxxx-Xxxx Companies, Inc., or
its successors.
Securities Act: The Securities Act of 1933, as amended.
Single Certificate: A Class A Certificate with an initial Certificate
Balance of $1,000.
Special Tax Consent: The written consent of the Holder of the Class R
Certificates to any tax (or risk thereof) arising out of a proposed transaction
or activity that may be imposed upon such Holder or that may affect adversely
the value of such Holder's Class R Certificates.
Special Tax Opinion: An Opinion of Counsel that a proposed transaction or
activity will not (a) affect adversely the status of the Trust REMIC as a REMIC
or the Class A Certificates as the regular interests therein, (b) affect the
timing or amount of distributions of interest or principal on the Class A
Certificates, (c) result in the encumbrance of the Underlying Certificates by a
tax lien, or (d) result in the imposition of a tax on the Trust REMIC.
Startup Day: The Startup Day of the Trust REMIC (within the meaning of
Code section 860G(a)(9)) is the Closing Date.
Target Balance: $[_____________].
Tax Matters Person: The Person or Persons designated from time to time
hereunder to act as tax matters person (within the meaning of the REMIC
Provisions) of the Trust REMIC.
Termination Price: The greater of (i) the outstanding Certificate Balance
of the Certificates, together with accrued and unpaid interest thereon, and (ii)
the aggregate fair market value of the Underlying Certificates, as determined
pursuant to Section 6.1.
-----------
Trust: The trust created pursuant to this Agreement.
-8-
Trust Fund: As defined in Section 2.1.
-----------
Trust REMIC: The REMIC comprised of the Trust Fund, excluding the Reserve
Account.
Trustee: [Trustee], a [_________] banking corporation, its successor in
interest, or any successor trustee appointed as herein provided.
Trustee Fee: With respect to any Payment Date, an amount equal to the
product of (i) 1/12 of [____]% and (ii) the Class A Certificate Balance
immediately prior to the such Payment Date.
Underlying Certificate: Any of the Class A Underlying Certificates
transferred to the Trustee by the Depositor pursuant hereto, as specified on
Exhibit D hereto.
---------
Underlying Certificate Balance: With respect to any Underlying
Certificate, on any date of determination, the initial principal amount of such
Underlying Certificate, less the amout applied to reduce the principal amount
thereof.
Underlying Certificate Owner: The registered holder of any Underlying
Certificate, or if the registered holder is the Depository, the beneficial owner
of such Underlying Certificate, which, following the execution and delivery of
this Agreement by the parties hereto, shall be the Trustee for the benefit of
the Certificateholders.
Underlying Servicer Default: The occurrence or continuance of any servicer
event of default as set forth in the Pooling and Servicing Agreement.
Underlying Trustee: The trustee of the trust created pursuant to the
Pooling and Servicing Agreement as identified therein.
United States Person: (i) A citizen or resident of the United States, (ii)
a corporation or partnership (unless, in the case of a partnership, Treasury
regulations are adopted that provide otherwise) created or organized in or under
the laws of the United States, any state thereof or the District of Columbia,
including an entity treated as a corporation or partnership for federal income
tax purposes, (iii) an estate the income of which is includible in gross income
for United States federal income tax purposes, regardless of its source or (iv)
a trust if a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more United States
Persons have the authority to control all substantial decisions of such trust
(or, to the extent provided in applicable Treasury regulations, certain trusts
in existence on August 20, 1996 which are eligible to be treated as United
States persons).
Voting Rights: 98% to the Class A Certificates, 1% to the Class IO
Certificates and 1% to the Class R Certificates, allocated in each case among
the Certificates of such class in proportion to their respective Percentage
Interests.
-9-
ARTICLE II
CONVEYANCE OF THE UNDERLYING CERTIFICATES;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.1 Conveyance of the Underlying Certificates.
-----------------------------------------
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby sell, transfer, assign, set-over and otherwise convey to the
Trustee, in trust, for the use and benefit of the Certificateholders, without
recourse, all the right, title and interest of the Depositor in and to the
following to be collectively known herein as the Trust Fund:
(i) The Underlying Certificates, and all distributions and payments
thereon and proceeds of the conversion, voluntary and involuntary, of the
foregoing, including, without limitation, all rights to receive all
principal and interest payments due on the Underlying Certificates after
the Cut-off Date;
(ii) all funds, whether in the form of cash, instruments, securities
or other property, on deposit or held by the Trustee from time to time in
the Reserve Account and the Certificate Account; and
(iii) proceeds of the foregoing.
(b) In connection with such transfer and assignment, the Depositor does
hereby deliver or cause to be delivered to, and deposit or cause to be deposited
with, the Trustee each of the following documents or instruments relating to
each Underlying Certificate:
(i) if the registered owner of such Underlying Certificate is the
Depository, written evidence of the transfer of the Ownership Interest in
such Underlying Certificate on the books and records of the Depository, any
Depository Participant or any "securities intermediary" (as defined in
Article 8 of the NY UCC) to the account of the Trustee or its nominee
(which nominee shall not be the Depositor or any affiliate of the
Depositor); otherwise, a duly issued and authenticated Underlying
Certificate endorsed to [Trustee], as trustee under the Trust Agreement,
dated [__________, 2001], for the EQCC Asset Backed Certificates, Series
[2001-1] together with such documents as shall be necessary to cause
registration of transfer of such certificate to be made and to obtain a
duly issued and authenticated Underlying Certificate in such name;
(ii) a copy of the Pooling and Servicing Agreement; and
(iii) copies of the most recent Distribution Date Statements delivered
to the related Underlying Certificate Owner with respect to each Underlying
Certificate.
(c) The Trustee hereby acknowledges the receipt by it of the Underlying
Certificates and the other documents and instruments referenced above, and
declares that it holds and will hold such Underlying Certificates and such other
documents and instruments, and that it holds and will hold all other assets and
documents included in the Trust Fund, in trust for the exclusive use and benefit
of all present and future Certificateholders.
-10-
The transfer of the Underlying Certificates and all other assets
constituting the Trust Fund is absolute and is intended by the parties hereto as
a sale. Except as provided in Sections 2.3 and 6.1 hereof, the Trustee shall
------------ ---
not assign, sell, dispose of or transfer any interest in the Underlying
Certificates or any other asset constituting the Trust Fund or permit the
Underlying Certificates or any other asset constituting the Trust Fund to be
subjected to any lien, claim or encumbrance arising by, through or under the
Trustee or any person claiming by, through or under the Trustee.
Promptly after the Closing Date, with respect to each Underlying
Certificate the registered owner of which is not the Depository, the Trustee
shall cause registration of transfer of such Underlying Certificate to be made
and shall obtain, in exchange for the documents and instruments specified in
Section 2.1(b)(i), a duly issued and authenticated Underlying Certificate
-----------------
registered in the name specified in Section 2.1 in respect of such Underlying
-----------
Certificate.
(d) It is intended that the conveyance of the Underlying Certificates by
the Depositor to the Trustee as provided in this Section be, and be construed
as, an absolute sale of the Underlying Certificates by the Depositor to the
Trustee for the benefit of the Certificateholders. Furthermore, it is not
intended that such conveyance be deemed a pledge of the Underlying Certificates
by the Depositor to the Trustee to secure a debt or other obligation of the
Depositor. However, in the event that, notwithstanding the intent of the
parties, the Underlying Certificates are held to be the property of the
Depositor, or if for any other reason this Agreement is held or deemed to create
a security interest in the Underlying Certificates, then it is intended that,
(a) this Agreement shall also be deemed to be a security agreement within the
meaning of Articles 8 and 9 of the NY UCC and the Uniform Commercial Code of any
applicable jurisdiction, as currently in effect; (b) the conveyance provided for
in this Section shall be deemed to be a grant by the Depositor to the Trustee
for the benefit of the Certificateholders of a security interest in all of the
Depositor's right, title and interest in and to the Trust Fund and all amounts
payable to the Holders of the Underlying Certificates after the Closing Date in
accordance with the terms thereof, and all proceeds of the conversion, voluntary
or involuntary, of the foregoing into cash, instruments, securities or other
property, including without limitation all amounts from time to time held or
invested in the Certificate Account and the Reserve Account, whether in the form
of cash, instruments, securities, investment property or other property; (c) the
possession by the Trustee or its agent of Underlying Certificates that
constitute Certificated Securities and such other items of property as
constitute instruments, money, negotiable documents or chattel paper, if any,
shall be deemed to be "possession by the secured party" for purposes of
perfecting the security interest pursuant to the NY UCC and the Uniform
Commercial Code of any applicable jurisdiction, as currently in effect; (d) the
Certificate Account and the Reserve Account shall be deemed to be Securities
Accounts and the provisions of Section 3.3 hereof shall be deemed effective to
-----------
constitute Control by the Securities Intermediary (as defined in Section 3.3)
-----------
for purposes of perfecting the security interest pursuant to the NY UCC and the
Uniform Commercial Code of any applicable jurisdiction, as currently in effect,
in the Security Entitlements in the Financial Assets credited from time to time
to such Securities Accounts; and (e) notifications to persons holding such
property, and acknowledgments from persons holding such property that they hold
such property for the Trustee's benefit, shall be deemed notifications to, and
acknowledgments from, bailees, or agents (as applicable) of the Trustee for the
purpose of perfecting such security interest under [Section 9-313(c)] of the NY
UCC and the
-11-
Uniform Commercial Code of any applicable jurisdiction. Capitalized terms used
but not defined herein shall have the meanings assigned to such terms in the NY
UCC.
(e) The Depositor and the Trustee, at the Depositor's direction, shall to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Underlying Certificates and other assets constituting the Trust Fund
described above, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Trustee agrees that it will
maintain physical possession of the Underlying Certificates that constitute
Certificated Securities in the State of New York.
SECTION 2.2 Issuance of Certificates Evidencing Interests in the Trust
----------------------------------------------------------
Fund.
----
The Trustee acknowledges the assignment to it of the Underlying
Certificates and, concurrently therewith and in exchange therefor, pursuant to
the written request of the Depositor executed by an officer of the Depositor,
the Trustee has executed and caused to be authenticated and delivered to, or
upon the written order of, the Depositor the Certificates in authorized
denominations which evidence ownership of the entire Trust Fund.
SECTION 2.3 Representations, Warranties and Covenants of the Depositor
----------------------------------------------------------
with Respect to the Underlying Certificates.
-------------------------------------------
The Depositor hereby represents and warrants to the Trustee for the benefit
of Certificateholders, as of the Closing Date, that immediately prior to the
assignment of the Underlying Certificates to the Trustee, the Depositor had good
title to, was the sole owner of, each Underlying Certificate, free and clear of
any pledge, lien, encumbrance or security interest, and has the right to sell
each Underlying Certificate to the Trustee.
The Depositor further represents and warrants to the Trustee for the
benefit of the Certificateholders that since the original issuance of each
Underlying Certificate that each such Underlying Certificate has qualified as a
regular interest in a REMIC and no event has occurred that would cause any of
the Underlying Certificates to fail to qualify as a REMIC regular interest for
federal income tax purposes.
It is understood and agreed that the representations and warranties set
forth in this Section 2.3 shall survive delivery of the Underlying Certificates
-----------
to the Trustee.
Upon discovery by either the Depositor or the Trustee of a breach of any
representation or warranty set forth in this Section 2.3 which materially and
-----------
adversely affects the interests of the Certificateholders in any Underlying
Certificate, the party discovering such breach shall give prompt written notice
to the other party. In the event of such breach, the Depositor shall have 30
days, from the earlier of the discovery by the Depositor of such breach or the
receipt of such written notice, to cure such breach in all material respects or
become obligated to repurchase such Underlying Certificate as provided below.
If the Depositor fails to cure such breach within such time period, the
Depositor shall deposit into the Certificate Account on the next succeeding
Distribution Date an amount equal to the Underlying Certificate Balance of such
Underlying Certificate. Upon the deposit of such amount, the Trustee shall, at
the Depositor's expense, take
-12-
such actions and execute such documents and instruments as shall be necessary to
reconvey to the Depositor the Ownership Interest in such repurchased Underlying
Certificate and, in the case of any such Underlying Certificate the registered
owner of which is not the Depository, to enable the Depositor to cause
registration of transfer to it of such repurchased Underlying Certificate to be
made and to obtain a duly issued and authenticated Underlying Certificate in its
or its nominee's name.
ARTICLE III
ADMINISTRATION OF THE UNDERLYING CERTIFICATES;
PAYMENTS AND REPORTS TO CERTIFICATEHOLDERS
SECTION 3.1 Administration of the Trust Fund and the Underlying
---------------------------------------------------
Certificates.
------------
If at any time the Trustee, as an Underlying Certificate Owner, is
requested in such capacity to take any action or to give any consent, approval
or waiver, including without limitation in connection with an amendment of the
related Pooling and Servicing Agreement or if an Underlying Servicer Default
occurs under the related Pooling and Servicing Agreement, the Trustee, in its
capacity as an Underlying Certificate Owner, may take such action in connection
with the enforcement of any rights and remedies available to it in such capacity
with respect thereto and only in accordance with the written directions of
Holders of Certificates entitled to at least 51% of the Voting Rights. The
Trustee shall promptly notify all of the Certificateholders in writing of any
such request.
SECTION 3.2 Collection of Monies.
--------------------
(a) In connection with its receipt of any distribution on an Underlying
Certificate on any Distribution Date, the Trustee shall review the related
Distribution Date Statement and shall confirm that the information contained
therein is arithmetically consistent; provided, however, that the Trustee shall
have no obligation to recompute, recalculate or verify any underlying
information from which the information in the Distribution Date Statement is
derived. If the Trustee shall not have received a distribution on any
Underlying Certificate by the close of business on the date on which such
distribution was to be received by the Trustee, the Trustee shall notify the
Underlying Trustee or other party responsible for effectuating distributions
under the related Pooling and Servicing Agreement, and (i) if such distribution
shall not have been received by the Trustee one Business Day following such
notice or (ii) a Responsible Officer of the Trustee shall gain actual knowledge
of any Underlying Servicer Default under any Pooling and Servicing Agreement,
the Trustee shall promptly notify the Certificateholders in writing and such
parties shall proceed in accordance with the terms and conditions of Section
-------
3.1.
(b) Except as otherwise provided in Section 6.1, upon its receipt of a
-----------
Notice of Final Distribution, the Trustee shall present and surrender the
Underlying Certificate to which such notice applies for final payment thereon in
accordance with the terms and conditions of the related Pooling and Servicing
Agreement and such Notice of Final Distribution. The Trustee shall promptly
deposit in the Certificate Account the final distribution received upon
presentation and surrender of any Underlying Certificate.
-13-
SECTION 3.3 Establishment of Accounts.
-------------------------
(a) Certificate Account. The Trustee, for the benefit of the
Certificateholders, shall establish and maintain one or more non-interest
bearing accounts (collectively, the "Certificate Account"), each of which shall
be an Eligible Account maintained in the name of the Trustee, entitled
"Certificate Account, in trust for the Holders of EQCC Asset Backed
Certificates, Series [2001-1] Certificates" held in trust by the Trustee for the
benefit of the Certificateholders.
(b) Reserve Account. The Trustee, for the benefit of the
Certificateholders, shall establish and maintain one or more non-interest
bearing accounts (collectively, the "Reserve Account"), each of which shall be
an Eligible Account maintained in the name of the Trustee, entitled "Reserve
Account, in trust for the registered holders of EQCC Asset Backed Certificates,
Series [2001-1] Certificates" held by the Trustee for the benefit of the
Certificateholders.
(c) Securities Intermediary. The Depositor and the Trustee hereby appoint
[Trustee] as Securities Intermediary with respect to the Certificate Account and
the Reserve Account (individually, a "Trust Account," and collectively, the
"Trust Accounts"). The Security Entitlements and all Financial Assets credited
to the Trust Accounts, including without limitation all amounts, securities,
investments, Financial Assets, investment property and other property from time
to time deposited in or credited to such account and all proceeds thereof, held
from time to time in the Trust Accounts will continue to be held by the
Securities Intermediary for the Trustee for the benefit of the
Certificateholders. Upon the termination of the Trust, the Trustee shall inform
the Securities Intermediary of such termination. By acceptance of their
Certificates or interests therein, the Certificateholders shall be deemed to
have appointed [Trustee] as Securities Intermediary. [Trustee] hereby accepts
such appointment as Securities Intermediary.
(i) With respect to any portion of the Trust Fund that is credited to
the Trust Accounts, the Securities Intermediary agrees that:
(A) with respect to any portion of the Trust Fund that is held in
deposit accounts, each such deposit account shall be subject to the
exclusive custody and control of the Securities Intermediary, and the
Securities Intermediary shall have sole signature authority with
respect thereto;
(B) the sole assets permitted in the Trust Accounts shall be
those that the Securities Intermediary agrees to treat as Financial
Assets;
(C) any portion of the Trust Fund that is, or is treated as, a
Financial Asset shall be physically delivered (accompanied by any
required endorsements) to, or credited to an account in the name of,
the Securities Intermediary or other eligible institution maintaining
any Trust Account in accordance with the Securities Intermediary's
customary procedures such that the Securities Intermediary or such
other institution establishes a Security Entitlement in favor of the
Trustee with respect thereto over which the Securities Intermediary or
such other institution has Control; and
(D) it will use reasonable efforts to promptly notify the Trustee
and the Depositor if any other Person claims that it has a property
interest in a Financial
-14-
Asset in either Trust Account and that it is a violation of that
Person's rights for anyone else to hold, transfer or deal with such
Financial Asset.
(ii) The Securities Intermediary hereby confirms that (A) each Trust
Account is an account to which Financial Assets are or may be credited, and
the Securities Intermediary shall, subject to the terms of this Agreement,
treat the Trustee as entitled to exercise the rights that comprise any
Financial Asset credited to any Trust Account, (B) any portion of the Trust
Fund in respect of any Trust Account will be promptly credited by the
Securities Intermediary to such account, and (C) all securities or other
property underlying any Financial Assets credited to any Trust Account
shall be registered in the name of the Securities Intermediary, endorsed to
the Securities Intermediary or in blank or credited to another securities
account maintained in the name of the Securities Intermediary, and in no
case will any Financial Asset credited to any Trust Account be registered
in the name of the Depositor, payable to the order of the Depositor or
specially endorsed to the Depositor.
(iii) If at any time the Securities Intermediary shall receive an
Entitlement Order from the Trustee directing transfer or redemption of any
Financial Asset relating to any Trust Account, the Securities Intermediary
shall comply with such Entitlement Order without further consent by the
Depositor or any other Person. If at any time the Trustee notifies the
Securities Intermediary in writing that the Trust has been terminated in
accordance herewith, then thereafter if the Securities Intermediary shall
receive any order from the Depositor directing transfer or redemption of
any Financial Asset relating to any Trust Account, the Securities
Intermediary shall comply with such Entitlement Order without further
consent by the Trustee or any other Person.
(iv) In the event that the Securities Intermediary has or
subsequently obtains by agreement, operation of law or otherwise a security
interest in any Trust Account or any Financial Asset credited thereto, the
Securities Intermediary hereby agrees that such security interest shall be
subordinate to the security interest of the Trustee. The Financial Assets
credited to the Trust Accounts will not be subject to deduction, set-off,
banker's lien, or any other right in favor of any Person other than the
Trustee in the case of the Trust Accounts (except that the Securities
Intermediary may set-off (i) all amounts due to it in respect of its
customary fees and expenses for the routine maintenance and operation of
the Trust Accounts, and (ii) the face amount of any checks which have been
credited to any Trust Account but are subsequently returned unpaid because
of uncollected or insufficient funds).
(v) There are no other agreements entered into between the
Securities Intermediary in such capacity and the Securities Intermediary
agrees that it will not enter into any agreement with, the Depositor, or
any other Person with respect to any Trust Account. In the event of any
conflict between this Agreement (or any provision of this Agreement) and
any other agreement now existing or hereafter entered into, the terms of
this Agreement shall prevail.
(vi) The rights and powers granted herein to the Trustee have been
granted in order to perfect its interest in the Trust Accounts and the
Security Entitlements to the
-15-
Financial Assets credited thereto, and are powers coupled with an interest
and will neither be affected by the bankruptcy of the Depositor nor by the
lapse of time. The obligations of the Securities Intermediary hereunder
shall continue in effect until the interest of the Trustee in the Trust
Accounts and in such Security Entitlements, has been terminated pursuant to
the terms of this Agreement and the Trustee has notified the Securities
Intermediary of such termination in writing; and
(vii) Notwithstanding the foregoing, the Trustee shall have the power
to make withdrawals and distributions from the Trust Accounts for the
purpose of permitting Trustee to carry out its respective duties hereunder
or permitting the Trustee to carry out its duties hereunder.
(d) Investment. Funds on deposit in the Certificate Account and Reserve
Account may be invested, and if invested shall be invested in Permitted
Instruments at the direction of the Depositor. Amounts in the Certificate
Account and the Reserve Account shall be invested in Permitted Instruments that
mature not later than the immediately succeeding Payment Date. The Trustee
shall have no obligation to invest and reinvest any cash held in the Certificate
Account or Reserve Account in the absence of timely and specific written
direction. All such investments shall be made in the name of the Trustee in the
manner provided herein.
(e) Losses. It is understood and agreed that the Trustee shall not be
liable for any loss arising from an investment in Permitted Instruments made in
accordance with this Section (other than with respect to Permitted Instruments
as to which it is the issuer). 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 to be provided with timely written investment
direction.
(f) Definitions; Choice of Law. Capitalized terms used herein and not
defined herein shall have the meanings assigned to such terms in the NY UCC, as
currently in effect. For purposes of Section 8-110(e) of the NY UCC, the
"securities intermediary's jurisdiction" shall be the State of New York.
(g) Limitation on Liability; Indemnification. None of the Securities
Intermediary or any director, officer, employee or agent of the Securities
Intermediary shall be under any liability to the Trustee or the
Certificateholders for any action taken, or not taken, in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Securities Intermediary against any liability to
the Trustee or the Certificateholders which would otherwise be imposed by reason
of the Securities Intermediary's willful misconduct, bad faith or negligence in
the performance of its obligations or duties hereunder. The Securities
Intermediary and any director, officer, employee or agent of the Securities
Intermediary may rely in good faith on any document of any kind which, prima
facie, is properly executed and submitted by any Person respecting any matters
arising hereunder. The Securities Intermediary shall be under no duty to
inquire into or investigate the validity, accuracy or content of such document.
The Trust Fund shall indemnify the Securities Intermediary for and hold it
harmless against any loss, liability or expense arising out of or in connection
with this Agreement and carrying out it duties hereunder, including the costs
and expenses of defending itself against any claim of liability, except in those
cases where the Securities Intermediary has
-16-
been guilty of bad faith, negligence or willful misconduct. The foregoing
indemnification shall survive any termination of this Agreement.
SECTION 3.4 Deposits and Collections with Respect to the Accounts.
-----------------------------------------------------
(a) The Certificate Account.
(i) The Trustee shall cause the following payments and collections
in respect of the Underlying Certificates to be deposited directly into the
Certificate Account:
(A) all distributions (including, without limitation, amounts in
respect of the Underlying Certificate Insurance Policy) received on
the Underlying Certificates subsequent to the Closing Date;
(B) any amounts received in connection with the sale of the
Underlying Certificates pursuant to Section 6.1; and
-----------
(C) any other amounts specifically required to be deposited in
the Certificate Account hereunder.
(ii) The Trustee shall withdraw funds from the Certificate Account
for the following purposes:
(A) to reimburse the Depositor, the Trustee and the Securities
Intermediary for expenses incurred by and reimbursable to any of them
pursuant to Sections 3.3, 5.5 or 7.4, except as otherwise provided in
------------ --- ---
such sections; and
(B) to make payments in the amounts and in the manner provided
for in Section 3.5;
-----------
(C) to clear and terminate the Certificate Account upon the
termination of this Agreement.
(iii) On each Payment Date, the Trustee shall withdraw all funds from
the Certificate Account and shall use such funds withdrawn from the
Certificate Account only for the purposes described in Sections 3.4 and
------------
3.5.
---
(b) The Reserve Account.
(i) The Trustee shall cause to be deposited into the Reserve Account
amounts transferred from the Certificate Account. The Reserve Account shall
be part of the Trust, but not part of the Trust REMIC. The Holders of the
Class R Certificates shall be the legal owners of the Reserve Account. The
Reserve Account shall be an "outside reserve fund" within the meaning of
Treasury regulation section 1.860G-2(h) and shall be treated as
beneficially owned for federal income tax purposes by the Holders of the
Class R Certificates. For all federal tax purposes amounts transferred by
the Trust REMIC to the Reserve Account shall be treated as amounts
distributed by the Trust REMIC to the Holders of the Class R Certificates.
-17-
(ii) On each Payment Date, to the extent that funds in the
Certificate Account are insufficient to make the payments set forth in
Section 3.5(a)(ii) or (iii), the Trustee shall withdraw funds from the
------------------ -----
Reserve Account (to the extent of funds therein) to enable it to make such
payments.
(iii) On each Payment Date, to the extent that the funds in the
Reserve Account exceed the Requisite Amount (after making all payments
required on such Payment Date), the Trustee shall withdraw such excess and
pay it to the Class R Certificateholders. On the final Payment Date, the
Trustee shall distribute the balance in the Reserve Account to the Class R
Certificateholders.
SECTION 3.5 Payments.
--------
(a) On each Payment Date, the Trustee shall withdraw funds from the
Certificate Account and, to the extent required, from the Reserve Account as
provided below, and apply such funds in the following order of priority.
(i) To pay itself the Trustee Fee for such Payment Date only to the
extent of amounts in the Certificate Account representing Interest Amounts;
(ii) To pay to the Class A-1 Certificates, (A) interest on any
overdue interest at the rate of [___]% per annum, from the Payment Date on
which interest was not paid to the Payment Date on which such interest is
paid, (B) interest accrued but not paid with respect to previous Payment
Dates, and (C) thereafter, Monthly Interest on the Class A-1 Certificates
for such Payment Date, but in each case only to the extent of amounts in
the Certificate Account representing Interest Amounts, and if such amounts
are insufficient therefore, from the Reserve Account to the extent funds
are available therein;
(iii) To pay to the Class A-2 Certificates, (A) interest on any
overdue interest at the rate of [___]% per annum, from the Distribution
Date on which interest was not paid to the Payment Date on which such
interest is paid, (B) interest accrued but not paid with respect to
previous Payment Dates, and (C) thereafter, Monthly Interest on the Class
A-2 Certificates for such Payment Date, but in each case only to the extent
of amounts in the Certificate Account representing Interest Amounts, and if
such amounts are insufficient therefore, from the Reserve Account to the
extent funds are available therein;
(iv) To pay to the Class IO Certificates, (A) interest on any overdue
interest at the rate of [__]% per annum, from the Payment Date on which
interest was not paid to the Payment Date on which such interest is paid;
(B) interest accrued but not paid with respect to previous Payment Dates,
and (C) thereafter, Monthly Interest on the Class IO Certificates for such
Payment Date, but in each case only to the extent of amounts in the
Certificate Account representing Interest Amounts, and if such amounts are
insufficient therefore, from the Reserve Account to the extent funds are
available therein;
(v) To pay principal on the Class A-1 Certificates, from amounts in
the Certificate Account and, if necessary, amounts in the Reserve Account,
if any, in an amount required to reduce the Certificate Balance of the
Class A-1 Certificates to zero;
-18-
(vi) To pay principal on the Class A-2 Certificates, from amounts in
the Certificate Account and, if necessary, amounts in the Reserve Account,
if any, in an amount required to reduce the Certificate Balance of the
Class A-2 Certificates to zero;
(vii) To deposit to the Reserve Account funds remaining in the
Certificate Account until the Target Balance is achieved; and
(viii) To pay to the Class R Certificateholders any funds remaining in
the Certificate Account and any amounts on deposit in the Reserve Account
that are in-excess of the Target Balance.
(b) All payments made with respect to the Certificates on any Payment Date
shall be allocated pro rata among the Outstanding Certificates of such class
based upon their respective Percentage Interests. Payments to the
Certificateholders on each Payment Date will be made to the Certificateholders
of record on the related Record Date. Payments to any Certificateholder on any
Payment Date shall be made by wire transfer of immediately available funds to
the account of such Certificateholder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder shall have so
notified the Trustee in writing at least five Business Days prior to the related
Record Date and if such Certificateholder is the registered owner of Underlying
Certificates with an aggregate Percentage Interest equivalent to an initial
Certificate Balance of not less than $1,000,000 or, in the case of the Class IO
and Class R Certificates, a 10% Percentage Interest, or otherwise by check
mailed by first class mail to the address of such Certificateholder appearing in
the Certificate Register. Final payment on each Certificate will be made in
like manner, but only upon presentment and surrender of such Certificate at the
Corporate Trust Office or such other location specified in the notice to
Certificateholders of such final payment.
(c) For all purposes hereunder, interest shall accrue on the basis of a
360-day year consisting of twelve 30-day months.
SECTION 3.6 Statements to Certificateholders.
--------------------------------
On each Payment Date, the Trustee shall prepare, and shall forward by mail,
a statement, together with a copy of the Distribution Date Statement for the
immediately preceding Distribution Date, to each Certificateholder and to the
Depositor stating:
(i) the funds available for such Payment Date and the breakdown of
such funds between principal and interest;
(ii) with respect to such Payment Date, the aggregate amount paid to
the Holders of each class of Certificates on such Payment Date (specifying
the amount of interest and principal with respect to the Class A
Certificates);
(iii) the aggregate Certificate Balance of the Class A-1 Certificates
after giving effect to payments of principal in respect of the Certificates
on such Payment Date;
(iv) the aggregate Certificate Balance of the Class A-2 Certificates
after giving effect to payments of principal in respect of the Certificates
on such Payment Date;
-19-
(v) the aggregate Notional Balance of the Class IO Certificates
after giving effect to payments in respect of the Certificates on such
Payment Date;
(vi) the amount of the Reserve Account (after making all deposits and
withdrawals on such Distribution Date), and the Target Balance thereof; and
(vii) the amount of the Trustee Fee for such Distribution Date.
In the case of the information furnished pursuant to clause (ii) above, the
amounts shall also be expressed as a dollar amount per Single Certificate with
respect to the Class A Certificates.
In addition, the Trustee promptly will furnish to Certificateholders and
the Depositor copies of any notices, statements, reports or other communications
received by the Trustee as the holder of the Underlying Certificates. Trustee
shall request the Underlying Trustee of each trust relating to an Underlying
Certificate to send to it the related Distribution Date Statement.
On or before March 31st of each calendar year, beginning with calendar year
[2002], the Trustee shall prepare, or cause to be prepared, and deliver, or
cause to be delivered, by first class mail to each Person who at any time during
the previous calendar year was a Certificateholder of record a statement
containing the information required to be contained in the regular monthly
report to Certificateholders, as set forth in clause (ii) above aggregated for
such calendar year or the applicable portion thereof during which such Person
was a Certificateholder. Such obligation of the Trustee shall be deemed to have
been satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code and
Regulations.
Upon the written request of any Certificateholder, the Trustee shall
furnish to such Holder such information with respect to the Trust Fund and the
Certificates as is reasonably requested by such holder for purposes of enabling
such holder to satisfy the applicable informational requirements under Rule 144A
or otherwise, to the extent that the Trustee possesses such information or can
obtain possession of such information without incurring undue burden or expense.
ARTICLE IV
THE CERTIFICATES
SECTION 4.1 The Certificates.
----------------
The Class A-1 Certificates will be issued with an initial Certificate
Balance equal to $[________] and the Class A-2 Certificates will be issued with
an initial Certificate Balance equal to $[________], and each such class of
Certificates will be substantially in the form annexed hereto as Exhibit A. The
Class IO Certificates will be issued with an initial Notional Balance equal to
$[______], and will be substantially in the form annexed hereto as Exhibit B.
---------
The Class R Certificates will be substantially in the form annexed hereto as
Exhibit C. The Certificates are issuable in registered form only. The Class A
---------
Certificates will be issuable in Percentage Interests equivalent to initial
Certificate Balances of not less than [$100,000] and integral multiples of
[$1.00] in excess thereof. The Class IO Certificates will be issuable in
-20-
Percentage Interests equivalent to initial Notional Balances of not less than
[$100,000] and integral multiples of [$1.00] in excess thereof. The Class R
Certificates are issuable in Percentage Interests of [10%] and integral
multiples of [1%] in excess thereof.
The Certificates shall, on original issue, be executed and authenticated by
the Trustee, not in its individual capacity but solely as Trustee, and delivered
by the Trustee to or upon the written order of the Depositor upon receipt by the
Trustee of the Underlying Certificates and any other documents that are required
by this Agreement or that the Trustee may reasonably request. The Certificates
shall be executed by manual signature on behalf of the Trustee in its capacity
as trustee hereunder by a Responsible Officer. Certificates bearing the manual
signatures of individuals who were at any time the Responsible Officers of the
Trustee shall bind the Trustee, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Certificates or did not hold such offices at the date of such
Certificate. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
SECTION 4.2 Regular Certificates.
--------------------
(a) The Regular Certificates will be represented initially by one or more
Certificates registered in the name of CEDE & Co., as nominee of the Depository.
The Depositor and the Trustee may for all intents and purposes (including the
making of payments on the Regular Certificates) deal with the Depository as the
authorized representative of the Beneficial Owners of the Regular Certificates
for as long as those Certificates are registered in the name of the Depository.
The rights of Beneficial Owners of the Regular Certificates shall be limited to
those established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. The Beneficial Owners of the Regular
Certificates shall not be entitled to Certificates for the Regular Certificates
as to which they are the Beneficial Owners, except as provided in subsection (c)
below. Requests and directions from, and votes of, the Depository, as Holder,
shall not be deemed to be inconsistent if they are made with respect to
different Beneficial Owners. Without the consent of the Depositor and the
Trustee, a Regular Certificate may not be transferred by the Depository except
to another Depository that agrees to hold the Regular Certificate for the
account of the respective Depository Participants and Beneficial Owners.
(b) Neither the Depositor nor the Trustee will have any liability for any
aspect of the records relating to or payment made on account of Beneficial
Owners of the Regular Certificates held by the Depository, for monitoring or
restricting any transfer of beneficial ownership in a Regular Certificate or for
maintaining, supervising or reviewing any records relating to such Beneficial
Owners.
(c) The Regular Certificates will be issued in fully-registered,
certificated form to Beneficial Owners of Regular Certificates or their
nominees, rather than to the Depository or its nominee, only if (1) the
Depositor advises the Trustee in writing that the Depository is no longer
-21-
willing or able to discharge properly its responsibilities as Depository with
respect to the Regular Certificates and the Depositor is unable to locate a
qualified successor within 30 days or (2) the Depositor elects to terminate the
book-entry system operating through the Depository. Upon the occurrence of
either such event, the Trustee shall notify the Depository, which in turn will
notify all Beneficial Owners of Regular Certificates through Depository
Participants, of the availability of certificated Certificates. Upon surrender
by the Depository of the Certificates representing the Regular Certificates and
receipt of instructions for re-registration, the Trustee will reissue the
Regular Certificates as certificated Certificates to the Beneficial Owners
identified in writing by the Depository. Such certificated Certificates shall
not constitute Regular Certificates. All reasonable costs associated with the
preparation and delivery of certificated Certificates shall be borne by the
Depositor.
SECTION 4.3 Registration of Transfer and Exchange of Certificates.
-----------------------------------------------------
The Trustee shall cause to be kept at its Corporate Trust Office a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee will
initially serve as Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided.
If a Person other than the Trustee is appointed by the Trustee as
Certificate Registrar, such Person will give the Trustee prompt written notice
of the location, and any change in the location, of the Certificate Register,
and the Trustee shall have the right to inspect the Certificate Register at all
reasonable times and to obtain copies thereof, and the Trustee shall have the
right to rely upon a Certificate executed on behalf of the Certificate Registrar
by an Officer thereof as to the names and addresses of the Holders of the
Certificates and the principal amounts and numbers of such Certificates.
Subject to Section 4.4 below, upon surrender for registration of transfer
-----------
of any Certificate at the Corporate Trust Office of the Trustee or at any other
office or agency of the Trustee maintained for such purpose, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
of the same Class of a like aggregate Percentage Interest.
At the option of the Certificateholders, each Certificate may be exchanged
for other Certificates of the same Class with the same and authorized
denominations and a like aggregate Percentage Interest, upon surrender of such
Certificate to be exchanged at any such office or agency. Whenever any
Certificates are so surrendered for exchange, the Trustee shall execute and
cause the Certificate Registrar to authenticate and deliver the Certificates
which the Certificateholder making the exchange is entitled to receive. Every
Certificate presented or surrendered for transfer or exchange shall (if so
required by the Trustee) be duly endorsed by, or be accompanied by a written
instrument of transfer in the form satisfactory to the Trustee duly executed by,
the Holder thereof or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any transfer
or exchange of Certificates, but the Trustee may require payment of a sum
sufficient to cover any tax or
-22-
governmental charge that may be imposed in connection with any transfer or
exchange of Certificates.
All Certificates surrendered for transfer and exchange shall be destroyed
by the Certificate Registrar.
SECTION 4.4 Restrictions on Transfer.
------------------------
(a) Securities Law Compliance. No transfer of any Class R Certificate
shall be made unless that transfer is made pursuant to the provisions of this
Section 4.4. Any Holder of a Class R Certificate shall, and, by acceptance of
-----------
such Class R Certificate, does agree to, indemnify the Depositor and the Trustee
against any liability that may result if any transfer of such Class R
Certificates by such Holder is not made in accordance with federal and state
laws and the provisions of this Section 4.4. Neither the Depositor nor the
-----------
Trustee is obligated to register or qualify any Class R Certificate under the
Securities Act or any other securities law or to take any action not otherwise
required under this Agreement. In the event of any transfer of the Class R
Certificates (other than in connection with the initial transfer of any Class R
Certificates by the Depositor to an Affiliate of the Depositor) (i) unless such
transfer is made in reliance upon Rule 144A under the Securities Act (as
evidenced by a Rule 144A Investment Agreement delivered to the Trustee), the
Trustee and the Depositor shall require a written Opinion of Counsel (which may
be in-house counsel) acceptable to and in form and substance reasonably
satisfactory to the Trustee and the Depositor that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the Securities Act or is being made pursuant to the Securities
Act, which Opinion of Counsel shall not be an expense of the Trustee or the
Depositor or (ii) the Trustee shall require the transferor to execute a
transferor certificate and the transferee to execute an investment letter
acceptable to and in the form and substance reasonably satisfactory to the
Depositor and the Trustee certifying to the Depositor and the Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Trustee or the Depositor.
The Trustee shall provide to any transferee Holder and any prospective
transferee designated by such Holder information regarding the related Class R
Certificates and the related Underlying Certificates and such other information
as shall be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for transfer of any such Class R Certificate without registration
thereof under the Securities Act pursuant to the registration exemption provided
by Rule 144A, upon the request for such information by such Holder.
(b) Class R Certificates. The Trustee shall not register any transfer of a
Class R Certificate (including any beneficial interest therein) unless it shall
have received the written consent of the Trustee. No Class R Certificate may be
transferred to a Disqualified Organization. The Trustee will not consent to any
proposed transfer or sale of a Class R Certificate (1) to any investor that it
knows is a Disqualified Organization or (2) if the transfer involves less than
an entire interest in a Class R Certificate, unless (A) the interest transferred
is an undivided interest or (B) the transferor or the transferee provides the
Trustee with an Opinion of Counsel obtained at its own expense to the effect
that the transfer will not jeopardize the REMIC status of the Trust REMIC. The
Trustee's consent to any transfer is further conditioned upon the Trustee's
receipt from the proposed transferee of (x) a Residual Transferee Agreement,
-23-
(y) a Benefit Plan Affidavit, and (z) either (A) if the transferee is a non-
United States Person, an affidavit of the proposed transferee in substantially
the form attached as Exhibit F-1 to Exhibit F hereto and a certificate of the
----------- ---------
transferor stating whether the Class R Certificate has "tax avoidance potential"
as defined in Treasury Regulations Section 1.860G-3(a)(2), or (B) if the
transferee is a U.S. Person, an affidavit in substantially the form attached as
Exhibit F-2 to Exhibit F hereto. In addition, the transfer shall be subject to
----------- ---------
the additional restrictions set forth in Section 4.4(a) above. Notwithstanding
--------------
the foregoing, no Opinion of Counsel shall be required in connection with the
initial transfer of the Class R Certificates or their transfer by a broker or
dealer, if such broker or dealer was the initial transferee. Notwithstanding the
fulfillment of the prerequisites described above, the Trustee may withhold its
consent to, or the Trustee may refuse to recognize, a transfer of a Class R
Certificate, but only to the extent necessary to avoid a risk of
disqualification of the Trust REMIC as a REMIC or the imposition of a tax upon
the Trust REMIC. Any attempted transfer in violation of the foregoing
restrictions shall be null and void and shall not be recognized by the Trustee.
If a tax or a reporting cost is borne by the Trust REMIC as a result of the
transfer of a Class R Certificate or any beneficial interest therein in
violation of the restrictions set forth in this Section, the transferor shall
pay such tax or cost and, if such tax or cost is not so paid, the Trustee shall
pay such tax or cost or may pay such tax or reporting cost with amounts that
otherwise would have been paid to the transferee of the Class R Certificate (or
beneficial interest therein). In that event, neither the transferee nor the
transferor shall have any right to seek repayment of such amounts from the
Depositor, the Trustee, the Trust REMIC or the other Holders of any of the
Certificates, and none of such parties shall have any liability for payment of
any such tax or reporting cost. In the event that a Class R Certificate is
transferred to a Disqualified Organization, the Trustee shall make, or cause to
be made, available the information necessary for the computation of the excise
tax imposed under section 860E(e) of the Code.
SECTION 4.5 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If (i) any mutilated Certificates is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificates, and
(ii) there is delivered to the Trustee and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificates has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificates, a new Certificates of the same Percentage Interest. Upon the
issuance of any new Certificates under this Section, the Trustee may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Trustee and the Certificate Registrar) connected therewith.
Any replacement Certificates issued pursuant to this Section shall constitute
complete and indefeasible evidence of ownership in the Trust Fund, as if
originally issued, whether or not the lost, stolen or destroyed Certificates
shall be found at any time.
-24-
SECTION 4.6 Persons Deemed Owners.
----------------------
Prior to due presentation of a Certificates for registration of transfer,
the Depositor, the Trustee, the Certificate Registrar and any agent of the
Depositor, the Trustee or the Certificate Registrar may treat the Person in
whose name any Certificates is registered as the owner of such Certificates for
the purpose of receiving payments pursuant to Section 3.5 and for all other
-----------
purposes whatsoever, and neither the Depositor, the Trustee, the Certificate
Registrar nor any agent of the Depositor, the Trustee or the Certificate
Registrar shall be affected by notice to the contrary except as provided in
Section 4.3.
-----------
ARTICLE V
THE TRUSTEE
SECTION 5.1 Duties of Trustee.
-----------------
The Trustee undertakes to perform its duties as are set forth in this
Agreement and shall exercise such of the rights and powers vested in it by this
Agreement, using the same degree of care and skill in its exercise as a prudent
person would exercise or use under the circumstances in the conduct of such
person's own affairs.
The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement, shall examine them to determine whether they conform to the
requirements of this Agreement; provided, however, that the Trustee shall not be
-------- -------
responsible for the accuracy or content of any resolution, certificate,
statement, opinion, report, document, order or other instrument furnished by the
Depositor hereunder. If any such instrument is found not to conform to the
requirements of this Agreement, the Trustee shall take such action as it deems
appropriate to have the instrument corrected, and if the instrument is not so
corrected, the Trustee will provide notice thereof to the related
Certificateholders.
No provision of this Agreement shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct; provided, however, that:
-------- -------
(i) The duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not
be liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee and conforming to the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or other officers of
the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
-25-
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Holders of Certificates entitled to at
least 25% of the related Voting Rights, relating to the time, method and
place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) The Trustee shall not be required to expend or risk its own
funds or otherwise incur financial liability for the performance of any of
its duties hereunder or the exercise of any of its rights or powers if
there is reasonable ground for believing that the repayment of such funds
or adequate indemnity against such risk or liability is not reasonably
assured to it; and
(v) Subject to the other provisions of this Agreement and without
limiting the generality of this Section, the Trustee shall have no duty (A)
to see to any recording, filing, or depositing of this Agreement or any
agreement referred to herein or any financing statement or continuation
statement evidencing a security interest, or to see to the maintenance of
any such recording or filing or depositing or to any rerecording, refiling
or redepositing of any thereof, (B) to see to any insurance, (C) to see to
the payment or discharge of any tax, assessment, or other governmental
charge or any lien or encumbrance of any kind owing with respect to,
assessed or levied against, any part of the Trust Fund or any Trust REMIC
or (D) to confirm or verify the contents of any reports or certificates
delivered to the Trustee pursuant to this Agreement believed by the Trustee
to be genuine and to have been signed or presented by the proper party or
parties.
SECTION 5.2 Certain Matters Affecting the Trustee.
-------------------------------------
(a) Except as otherwise provided in Section 5.1 hereof:
-----------
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate, Opinion
of Counsel, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal,
bond or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct or
defend by litigation hereunder or in relation hereto at the request, order
or direction of the Underlying Certificate Insurer or any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may
be incurred therein or thereby; nothing contained herein shall, however,
relieve the Trustee of the
-26-
obligation, to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in its exercise as
a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs;
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) The Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond or other paper or document, unless requested in writing to do so by
the Holders of Certificates entitled to at least 25% of the related Voting
Rights; provided, however, that if the payment within a reasonable time to
-------- -------
the Trustee of the costs, expenses or liabilities likely to be incurred by
it in the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to taking any such action;
(vi) The right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the
Trustee shall not be answerable for other than its negligence or willful
misconduct in the performance of such act;
(vii) The Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust created hereby or the powers granted
hereunder;
(viii) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder, including, without limitation, under
Section 2.1 hereof, either directly or by or through agents or attorney;
-----------
and
(ix) Certificateholders shall have the rights to institute suits,
actions or proceedings in equity or at law upon or under it with respect to
this Agreement only under the circumstances described in the third
paragraph of Section 9.3 hereof.
-----------
(b) Following the Startup Day, the Trustee shall not knowingly accept any
contribution of assets, including substitutions, to the Trust Fund or any Trust
REMIC, unless the Trustee shall have received an Opinion of Counsel to the
effect that the inclusion of such assets in the Trust Fund or any Trust REMIC
will not cause such Trust REMIC to fail to qualify as a REMIC at any time that
any Underlying Certificates are outstanding or subject any Trust REMIC to any
tax under the REMIC Provisions or other applicable provisions of federal, state
and local law or ordinances.
(c) All rights of action under this Agreement or under any of the
Certificates enforceable by the Trustee may be enforced by it without the
possession of any of the Certificates, or the production thereof at the trial or
other proceeding relating thereto, and any such suit, action or proceeding
instituted by the Trustee shall be brought in its name for the benefit of all
the Holders of the Certificates, subject to the provisions of this Agreement.
-27-
SECTION 5.3 Trustee Not Liable for Certificates.
-----------------------------------
The recitals contained herein and in the Certificates (other than the
signature and counter signature authentication on the Certificates) shall be
taken as the statements of the Depositors, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Agreement or of the Certificates (other than
the signature and counter signature of the Trustee on the Certificates) or of
any Underlying Certificates or related document. The Trustee shall not be
accountable for the use or application by the Depositor of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds deposited in or withdrawn from the Certificate Account
or the Reserve Account other than any funds held by or on behalf of the Trustee
in accordance with this Agreement. The Trustee shall not be responsible for the
legality or validity of the Agreement or the validity, priority, perfection or
sufficiency of the security for the Certificates issued or intended to be issued
hereunder.
SECTION 5.4 Trustee May Own Certificates.
----------------------------
The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights it would have if it were not
Trustee, and may otherwise deal with the parties hereto.
SECTION 5.5 Trustee's Fees and Expenses.
---------------------------
The Trustee shall be entitled to the Trustee Fee for each Payment Date, as
reasonable compensation (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) for all services
rendered by it in the execution of the trusts hereby created and in the exercise
and performance of any of the powers and duties hereunder of the Trustee.
Pursuant to a fee letter entered into with an Affiliate of the Depositor, the
Trustee, shall be reimbursed for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any of the
provisions of this Agreement (including, without limitation, the reasonable
fees, expenses and disbursements of its counsel and of all persons not regularly
in its employ, including any agents, attorneys and accountants of the Trustee,
except any such expense, disbursement or advance as may arise from its
negligence or bad faith, and provided that the Trustee shall have no lien on the
Trust Fund or any Trust REMIC for the payment of its fees and expenses. Failure
to pay any such fees or other expenses shall not relieve the Trustee of its
obligations hereunder. The Trustee and any director, officer, employee or agent
of the Trustee shall be indemnified by an affiliate of the Depositor and held
harmless against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense incurred by reason of willful misfeasance, bad faith
or negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder.
SECTION 5.6 Eligibility Requirements for Trustee.
------------------------------------
The Trustee hereunder shall at all times (i) be a banking association
organized and doing business under the laws of any state or the United States of
America, (ii) be authorized under such laws to exercise corporate trust powers,
including taking title to the Trust Fund assets on
-28-
behalf of the Certificateholders, (iii) have a combined capital and surplus of
at least $50,000,000, (iv) have long-term deposits, if any, be rated at least
"BBB" by S&P or such lower long-term deposit rating by S&P as may be approved in
writing by S&P and with a long-term deposit rating of at least "Baa2" from
Xxxxx'x (or such lower rating which would not cause Xxxxx'x to reduce its then
current ratings of the Class A Certificates), and (v) be subject to supervision
or examination by federal or state authority. If such banking association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 5.6 its combined capital and surplus shall be deemed to
-----------
be as set forth in it most recent report of condition so published. In case at
any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign upon the request of the
Holders of a majority of the Voting Rights, in the manner and with the effect
specified in Section 5.7.
-----------
SECTION 5.7 Resignation and Removal of the Trustee.
--------------------------------------
The Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Depositor and to all
Certificateholders. Upon receiving such notice of resignation, the Depositor
shall promptly appoint a successor trustee by written instrument, in duplicate,
which instrument shall be delivered to the resigning Trustee and to the
successor trustee. A copy of such instrument shall be delivered to the
Certificateholders by the successor trustee. Unless a successor trustee shall
have been appointed and have accepted appointment within 60 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.
If at any time the Trustee shall cease to be eligible in accordance with
the provisions of Section 5.6 and shall fail to resign after written request
-----------
therefor by the Depositor or the Holders of a majority of the Voting Rights, or
if at any time the Trustee shall become incapable of acting, or shall be
adjudged 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 the Depositor may remove the Trustee and
shall, within 30 days after such removal, appoint, subject to the approval of
the Depositor, which approval shall not be unreasonably withheld, a successor
trustee by written instrument, in duplicate, which instrument shall be delivered
to the Trustee so removed and to the successor trustee. A copy of such
instrument shall be delivered to the Certificateholders by the successor
trustee.
The Holders of a majority of the Voting Rights or, if the Trustee fails to
perform in accordance with this Agreement, the Depositor may remove the Trustee
and appoint a successor trustee by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys-in-fact duly authorized,
or by the Depositor, as the case may be, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor trustee so appointed.
Any resignation or removal of the Trustee and appointment of a successor
trustee pursuant to any of the provisions of this Section shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
-------
5.8.
---
-29-
SECTION 5.8 Successor Trustee.
-----------------
Any successor trustee appointed as provided in Section 5.7 shall execute,
-----------
acknowledge and deliver to the Depositor, and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the predecessor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations (including without
limitation its rights, powers, duties and obligations as an "entitlement holder"
within the meaning of Article 8 of the NY UCC) of its predecessor hereunder,
with the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all related documents and
statements held by it under this Agreement, and the Depositor and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers duties and
obligations.
No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 5.6.
-----------
Upon acceptance of appointment by a successor trustee as provided in this
Section, the successor trustee shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses shown in the
Certificate Register and S&P and Xxxxx'x.
SECTION 5.9 Merger or Consolidation of Trustee.
----------------------------------
Any Person into which the Trustee may be merged or converted or with which
it may be consolidated or any corporation or national banking association
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any corporation or national banking association succeeding
to the business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation or national banking association shall be eligible
under the provisions of Section 5.6, without the execution or filing of any
-----------
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
SECTION 5.10 Appointment of Co-Trustee or Separate Trustee.
---------------------------------------------
Notwithstanding any other provisions hereof, at any time, for the purpose
of meeting any legal requirements of any jurisdiction in which any part of the
Trust Fund or property securing the same may at the time be located, the
Depositor and the Trustee acting jointly shall have the power and shall execute
and deliver all instruments to appoint one or more Persons approved by the
Trustee and the Depositor with written notice to the Rating Agencies to act as
co-trustee or co-trustees, jointly with the Trustee, or separate trustee or
separate trustees, of all or any part of the Trust Fund, and to vest in such
Person or Persons, in such capacity, such title to the Trust Fund, or any part
thereof, and, subject to the other provisions of this Section 5.10, such powers,
------------
duties, obligations, rights and trusts as the Trustee may consider necessary or
desirable. If the Depositor shall not have joined in such appointment within 15
days after the receipt by it of a request so to do, the Trustee alone with
written notice to the Rating Agencies shall have the power to make such
appointment. No co-trustee or separate trustee hereunder shall be required
-30-
to meet the terms of eligibility as a successor trustee under Section 5.8
-----------
hereunder and no notice to Holders of Certificates of the appointment of co-
trustee(s) or separate trustee(s) shall be required under Section 5.8 hereof.
-----------
In the case of any appointment of a co-trustee or separate trustee pursuant
to this Section 5.10, all rights, powers, duties and obligations conferred or
------------
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular act
or acts are to be performed, the Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Trust Fund or any portion
thereof in any such jurisdiction) shall be exercised and performed by such
separate trustee or co-trustee at the direction of the Trustee.
Any notice, request or other writing given to the Trustee shall be deemed
to have been given to each of the then separate trustees and co-trustees, as
effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article V. Each separate trustee and co-trustee, upon its acceptance of
---------
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with the Trustee or separately, as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
SECTION 5.11 Appointment of Office or Agency.
-------------------------------
The Trustee will maintain an office or agency in the [City of New York]
where the Certificates may be surrendered for registration of transfer or
exchange. The Trustee initially designates its offices located at [Address] for
the purpose of keeping the Certificate Register. The Trustee will maintain an
office at the address stated in Section 9.5 hereof where notices and demands to
-----------
or upon the Trustee in respect of this Agreement may be served.
SECTION 5.12 Compliance with Withholding Requirements.
----------------------------------------
Notwithstanding any other provisions of this Agreement, the Trustee shall
comply with all federal withholding requirements with respect to payments to
Certificateholders. The consent of Certificateholders shall not be required for
any such withholding. In the event the Trustee withholds any amount from any
Certificateholder pursuant to federal withholdings requirements, the Trustee
shall indicate to such Certificateholder the amount so withheld.
-31-
SECTION 5.13 Trustee May Enforce Claims Without Possession of
------------------------------------------------
Certificates.
------------
All rights of action and claims under this Agreement or the Certificates
may be prosecuted and enforced by the Trustee without the possession of any of
the Certificates or the production thereof in any proceeding relating thereto
and any such proceeding instituted by the Trustee shall be brought in its own
name or in its capacity as Trustee. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been recovered.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination Upon Repurchase or Liquidation of All Underlying
------------------------------------------------------------
Certificates.
------------
(a) The respective obligations and responsibilities of the Depositor and
the Trustee under this Agreement (other than the obligations of the Trustee to
make distributions to Certificateholders, to provide tax information as provided
in Section 3.6 hereof and the obligations of the Trustee under Article IX
----------- ----------
hereof) shall terminate upon distribution to the Certificateholders of all
amounts held by or on behalf of the Trustee and required hereunder to be so
distributed on the Payment Date coinciding with or following the earlier to
occur of the final payment or other liquidation (or any advance with respect
thereto) of the last Underlying Certificate remaining in the Trust, whether by
purchase or other termination of the related Pooling and Servicing Agreement;
provided, however, that in no event shall the Trust created hereby continue
beyond the expiration of 21 years after the death of the last survivor of the
descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United States to
the Court of St. Xxxxx, living on the date hereof .
(b) The Holders of at least a 51% Percentage Interest of the Class R
Certificates (the "Residual Majority") may, at their option, make, or cause a
Person to make, a terminating purchase for the Termination Price on any Payment
Date on or after the Payment Date on which, after taking into account
distributions of principal to be made on such Payment Date, the aggregate
Certificate Balance of the Class A Certificates is less than 10% of the sum of
the initial Certificate Balance of the Class A Certificates.
(c) The Residual Majority shall notify the Trustee and the Certificate
Registrar in writing of its election to make or to cause a terminating purchase
no later than the Payment Date preceding the Payment Date on which the
Certificates will be retired as a result of such terminating purchase. The
Residual Majority shall advise in writing the Trustee and the Certificate
Registrar of the final payment or other liquidation of the last Underlying
Certificate remaining in the Trust at least three Business Days prior to the
Payment Date in the month in which the Trust will terminate as a result thereof.
Notice of any termination of the Trust shall be given promptly by the
Trustee by letter sent to the Certificateholders by certified mail (1) in the
event such notice is given in connection with a terminating purchase, not
earlier than the fifth day of the month preceding the month of
-32-
such termination and not later than the first day of the month of such
termination or (2) otherwise not later than the third Business Day preceding the
final Payment Date, in each case specifying (A) the Payment Date upon which the
Trust will terminate and that final payment of the Certificates will be made on
such Payment Date subject to presentation and surrender of the Certificate, if
not held through a Depository and (B) the amount of any such final distribution.
The Trustee shall give such notice to the Certificate Registrar at the time such
notice is given to Certificateholders. In the event such notice is given in
connection with a terminating purchase, the purchaser shall deliver to the
Trustee for deposit into the Certificate Account on the Business Day immediately
preceding the Payment Date on which the terminating purchase is to take place an
amount in next day funds equal to the Termination Price.
(d) On the final Payment Date, the Trustee shall distribute to the
Certificateholders as of the related Record Date the amount otherwise
distributable on the Certificates on such Payment Date (if such final Payment
Date is not the result of a terminating purchase).
Upon any termination of the Trust as the result of a terminating purchase,
the Trustee shall distribute the Termination Price as though it were the amount
on deposit in the Certificate Account in accordance with Section 3.5 hereof.
-----------
Following such final distribution, the Trustee shall promptly release to
the purchaser the related Underlying Certificates, and the Trustee shall execute
all assignments, endorsements and other instruments necessary to effectuate
transfer of such Underlying Certificates to such purchaser, whereupon the Trust
shall terminate.
(e) In the event that all of the Certificateholders shall not surrender
their Certificates within six months after the date specified in the above-
mentioned written notice, the Trustee shall give a second written notice to the
remaining Certificateholders to surrender their Certificates and receive the
final distribution with respect thereto, net of the cost of such second notice.
If within one year after the second notice all the Certificates shall not have
been surrendered for cancellation, the Trustee may take appropriate steps, or
may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the amounts otherwise payable on such Certificates.
Any funds payable to Certificateholders that are not distributed on the final
Payment Date shall be deposited in a termination account, which shall be an
Eligible Account, to be held for the benefit of Certificateholders not
presenting and surrendering their Certificates in the aforesaid manner, and
shall be disposed of in accordance with this Section.
SECTION 6.2 Additional Termination Requirements.
-----------------------------------
(a) In the event of a terminating purchase as provided in Section 6.1
-----------
hereof, the Trust shall be terminated in accordance with the following
additional requirements, unless the Depositor and the Trustee receive (1) a
Special Tax Opinion and (2) a Special Tax Consent from each of the Holders of
the Class R Certificates (unless the Special Tax Opinion specifically provides
that no REMIC-level tax will result from such terminating purchase).
(i) Within 90 days prior to the time of the making of the final
payment on the Certificates, the Trustee on behalf of the Trust REMIC shall
adopt a plan of complete
-33-
liquidation meeting the requirements set forth in the REMIC Provisions for
a qualified liquidation (which plan may be adopted by the Trustee's
attachment of a statement specifying the first day of the 90-day
liquidation period to the Trust REMIC's final federal income tax return)
and the Trust REMIC will sell all of its assets (other than cash).
(ii) At the time of the making of the final payment on the Regular
Certificates, the Trustee shall distribute or credit, or cause to be
distributed or credited, pro rata, to the Holders of the Class R
Certificates, all remaining cash on hand relating to the Trust REMIC after
such final payment (other than cash retained to meet claims against the
Trust) and the Trust REMIC shall terminate at that time.
(iii) In no event may the final payment on the Regular Certificates
or the final distribution or credit to the Holders of the Class R
Certificates be made after the 90th day after the date on which the plan of
complete liquidation relating thereto is adopted. A payment into a
termination account with respect to any Certificate pursuant to Section 6.1
-----------
hereof shall be deemed a final payment on, or final distribution with
respect to, such Certificate for the purposes of this Section 6.2(a)(iii).
-------------------
(b) By their acceptance of the Certificates, the Holders thereof agree to
appoint the Trustee as their attorney-in-fact (1) to adopt a plan of complete
liquidation of the Trust REMIC (and the Holders hereby appoint the Trustee as
their attorney-in-fact to sign such plan) and (2) to take such action as may be
necessary to adopt a plan of complete liquidation of the Trust REMIC upon the
written request of the Trustee, which authorization shall be binding upon all
successor Holders of the Certificates.
ARTICLE VII
THE DEPOSITOR
SECTION 7.1 Liability of the Depositor.
--------------------------
The Depositor shall be liable in accordance herewith only to the extent of
its obligations specifically imposed upon and undertaken by the Depositor
herein.
SECTION 7.2 The Depositor's Representations and Warranties.
----------------------------------------------
The Depositor represents and warrants to the Trustee, as of the date hereof
and as of the Closing Date, as follows:
(a) The Depositor has been duly incorporated and is validly existing as a
corporation under the laws of the State of Delaware and is in good standing
under such laws, with full power and authority to own its properties and conduct
its business as now conducted by it and to enter into and perform its
obligations under this Agreement, and has duly qualified to do business as a
foreign corporation and is in good standing under the laws of each jurisdiction
wherein it conducts any material business or in which the performance of its
duties under this Agreement would require such qualification.
-34-
(b) The Depositor has all requisite corporate power and authority to own
its properties and to conduct any and all business required or contemplated by
this Agreement to be conducted by the Depositor and to perform the covenants and
obligations to be performed by it hereunder; the execution and delivery by the
Depositor of this Agreement are within the corporate power of the Depositor and
have been duly authorized by all necessary corporate action on the part of the
Depositor; and neither the execution and delivery of this Agreement by the
Depositor, nor the consummation by the Depositor of the transactions herein
contemplated, nor compliance with the provisions hereof by the Depositor, will
(1) conflict with or result in a breach of, or will constitute a default under,
any of the provisions of the articles of incorporation or by-laws of the
Depositor or any law, governmental rule or regulation, or any judgment, decree
or order binding on the Depositor or its properties, or any of the provisions of
any indenture, mortgage, deed of trust, contract or other instrument to which
the Depositor is a party or by which it is bound or (2) result in the creation
or imposition of any lien, charge or encumbrance upon any of its property
pursuant to the terms of any such indenture, mortgage, deed of trust, contract
or other instrument.
(c) This Agreement and all other documents and instruments required or
contemplated hereby to be executed or delivered by the Depositor under this
Agreement have been duly authorized, executed and delivered by the Depositor
and, assuming due authorization, execution and delivery thereof by all other
parties thereto, constitute legal, valid and binding agreements enforceable
against the Depositor in accordance with their terms, subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency or other
similar laws affecting creditors' rights generally from time to time in effect
and to general principles of equity.
(d) No consent, approval, order or authorization of, or registration,
qualification or declaration with, any state, federal or other governmental
authority by the Depositor is required in connection with the authorization,
execution or delivery of this Agreement or the performance by the Depositor of
the covenants and obligations to be performed by it hereunder.
(e) As of the Closing Date, no Proceedings are pending or, to the best of
the Depositor's knowledge, threatened against the Depositor that would prohibit
its entering into this Agreement or performing its obligations under this
Agreement, including assisting in the issuance of the Certificates.
(f) The Depositor has obtained or made all necessary consents, approvals,
waivers and notifications of stockholders, creditors, lessors and other
nongovernmental persons, in each case, in connection with the execution and
delivery of this Agreement, and the consummation of all the transactions herein
contemplated.
(g) The Depositor does not believe, nor does it have any reason or cause
to believe, that it cannot perform its obligations under this Agreement.
Upon discovery by any of the Depositor or the Trustee of a breach of any of
the foregoing representations, warranties and covenants that materially and
adversely affects the interest of the Certificateholders in any Underlying
Certificate, the party discovering such breach
-35-
shall give prompt written notice thereof (but in no event later than two
Business Days following such discovery) to the other parties hereto.
SECTION 7.3 Corporate Existence.
-------------------
Subject to the provisions of the following paragraph, the Depositor will
keep in full effect its existence, rights and franchises as a corporation under
the laws of the jurisdiction in which it is incorporated and will obtain and
preserve its qualification to do business as a foreign corporation in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, any Certificates or any of the
Underlying Certificates included in the Trust Fund, and to perform its duties
under this Agreement.
SECTION 7.4 Limitation on Liability of the Depositor and Others.
---------------------------------------------------
Neither the Depositor nor any of the directors, officers, employees or
agents of the Depositor shall be under any liability to the Trust or the
Certificateholders and all such Persons shall be held harmless for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect any such Person against any breach of warranties or
representations made herein or against any liability which would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder. The Depositor and any of the directors, officers, employees or
agents of the Depositor may rely in good faith on any document of any kind
which, prima facie, is properly executed and submitted by any Person respecting
any matters arising hereunder. The Depositor shall not be under any obligation
to appear in, prosecute or defend any legal action unless such action is related
to its respective duties under this Agreement and such action in its opinion
does not involve it in any expense or liability, except as provided in Section
-------
8.1(b) hereof; provided, however, that the Depositor may in its discretion
------
undertake any such action that it deems necessary or desirable with respect to
this Agreement and the rights and duties of the parties thereto and the
interests of the Certificateholders thereunder if the Certificateholders offer
to the Depositor reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby.
SECTION 7.5 Protection of Trust Fund.
------------------------
The Depositor will execute and deliver from time to time all amendments to
this Agreement and all financing statements, continuation statements,
instruments of further assurance and other instruments necessary or advisable in
order to, and will take such other action as the Trustee deems necessary or
advisable in order to:
(a) grant to the Trustee more effectively all or any portion of the Trust
Fund;
(b) preserve and defend the Trust's title to the Trust Fund and the rights
therein of the Trustee and the Holders of Certificates against the claims of all
persons and parties;
(c) maintain or preserve the lien (and the priority thereof) created by
this Agreement or to carry out more effectively the purposes hereof (including
the filing of continuation statements under the UCC as necessary);
-36-
(d) perfect, publish notice of, or protect the validity of any grant made
or to be made pursuant to this Agreement; or
(e) enforce any of the related Underlying Certificates or the Underlying
Certificate Insurance Policy.
The Depositor 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 7.8; provided, that the Trustee shall have no
-----------
duty to determine whether the filing of any financing statement shall be
necessary or to file such statements except upon written request of the
Depositor.
ARTICLE VIII
REMIC TAX PROVISIONS
SECTION 8.1 REMIC Administration.
--------------------
An election will be made by the Trustee to treat the Trust REMIC as a REMIC
under the Code. Each Holder of a Class R Certificate shall, in its Residual
Transferee Agreement, designate the Trustee, as its agent, to act as the Tax
Matters Person for such REMIC. The Trustee agrees that it will serve as such
Tax Matters Person for the Trust REMIC, and also will perform various tax
administration functions for the Trust REMIC, as its agent, as set forth in this
Section 8.1.
-----------
(a) The Trustee shall elect to have the Trust REMIC treated as a REMIC on
Form 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 Certificates are
issued as well as on any corresponding state tax or information return necessary
to have such assets treated as a REMIC under relevant state law.
(b) The Trustee shall prepare any necessary forms for election as well as
all of the Trust's and the Trust REMIC's federal and state tax and information
returns and shall sign and file such returns on behalf of the Trust REMIC.
(c) The Trustee shall perform all reporting and other tax compliance
duties that are the responsibility of the Trust and the Trust REMIC under the
REMIC Provisions or state or local tax law. Among its other duties, if required
by the REMIC Provisions, the Trustee, acting as agent of the Trust REMIC, shall
provide to the Treasury or to other governmental authorities such information as
is necessary for the application of any tax relating to the transfer of a Class
R Certificate to any Disqualified Organization.
(d) The Depositor, the Trustee and the Holders of Class R Certificates
shall take any action or cause the Trust REMIC to take any action necessary to
create or maintain the status of the Trust REMIC as a REMIC under the REMIC
Provisions and shall assist each other as necessary to create or maintain such
status.
(e) The Depositor, the Trustee and the Holders of the Class R Certificate
shall not take any action or fail to take any action, or cause the Trust REMIC
to take any action or fail to
-37-
take any action that, if taken or not taken, could (i) result in the imposition
of any tax on the Trust REMIC that would not otherwise have been imposed or (ii)
endanger the status of the Trust REMIC as a REMIC unless the Trustee has
received an Opinion of Counsel (at the expense of the party seeking to take or
to omit to take such action) to the effect that the contemplated action or
failure to act will not result in the imposition of such a tax or endanger such
status.
(f) Any taxes that are imposed upon the Trust or the Trust REMIC by
federal or state (including local) governmental authorities (other than taxes
paid by a party pursuant to Section 8.2 hereof or as provided in the following
-----------
sentence) shall be payable out of the funds in the Certificate Account before
any distributions are made on the related Certificates on the related Payment
Date. Any state or local taxes imposed upon the Trust, the Trust REMIC or any
related Certificateholder that would not have been imposed on the Trust, the
Trust REMIC or such Certificateholder in the absence of any legal or business
connection between the Trustee and the state or locality imposing such taxes
(including any federal, state or local taxes imposed on such Trust, the Trust
REMIC or such Certificateholder as a result of such Trust, the Trust REMIC or
such Certificateholder being deemed to have received income as a result of the
Trustee's payment of state or local taxes) shall be paid by the Trustee, and,
notwithstanding anything to the contrary in this Agreement, such taxes shall be
deemed to be part of the Trustee's cost of doing business and shall not be
reimbursable to the Trustee.
(g) If the Trustee is unable for any reason to fulfill its duties as Tax
Matters Person, then the holder of the largest Percentage Interest of the Class
R Certificates, without compensation, shall become the successor Tax Matters
Person for the Trust REMIC.
SECTION 8.2 Prohibited Activities.
---------------------
Neither the Depositor, the Holders of Class R Certificates, nor the Trustee
shall engage in, nor shall the Trustee permit, any of the following transactions
or activities unless it has received (1) a Special Tax Opinion and (2) a Special
Tax Consent from each of the Holders of the Class R Certificates:
(a) the sale or other disposition of, or substitution for, any of the
Underlying Certificates except pursuant to (1) the repurchase of an Underlying
Certificate pursuant to Section 2.3 hereof, (2) the bankruptcy or insolvency of
-----------
the Trust REMIC, or (3) the termination of the Trust REMIC pursuant to Article
-------
VI hereof;
--
(b) the acquisition of any assets for the Trust after the Closing Date
except during the three-month period beginning on the Closing Date pursuant to a
fixed-price contract in effect on the Closing Date that has been reviewed and
approved by tax counsel acceptable to the Trustee;
(c) the sale or other disposition of any investment in the Certificate
Account at a gain;
(d) the acceptance of any contribution to the Trust REMIC except the
following cash contributions: (1) a cash contribution received during the three-
month period beginning on the Closing Date; (2) a cash contribution to
facilitate a terminating purchase that is made within the 90-day period
beginning on the date on which a plan of complete liquidation is adopted
pursuant to Section 6.2 hereof; (3) a contribution to a reserve fund owned by
-----------
the Trust REMIC that is
-38-
made pro rata by the Holders of the Class R Certificates; or (4) any other
contribution approved by the Trustee after consultation with tax counsel;
(e) the Trustee nor shall not permit any modification of any material term
of an Underlying Certificate (including, but not limited to, the interest rate,
the principal balance, the amortization schedule, the remaining term to
maturity, or any other term affecting the amount or timing of payments on the
Underlying Certificates), unless the Trustee has received an Opinion of Counsel
(at the expense of the party seeking to modify the Underlying Certificate) to
the effect that such modification would not be treated as giving rise to a new
debt instrument for REMIC purposes;
(f) any other transaction or activity that is not contemplated by this
Agreement;
(g) the sale or other disposition of any asset held in a reserve fund for
a period of less than three months (a "Short-Term Reserve Fund Investment") if
such sale or disposition would cause 30% or more of a related REMIC's income
from all of its reserve funds for the taxable year to consist of gain from the
sale or disposition of Short-Term Reserve Fund Investments;
(h) the withdrawal of any amounts from any reserve fund except (A) for the
distribution pro rata to the Holders of the Class R Certificates or (B) to
provide for the payment of Trust expenses or amounts payable on the Certificates
or lower than expected returns on funds held in the Certificate Account, as
provided under section 860G(a)(7) of the Code; or
(i) the entering into of any arrangement by which the Trust REMIC will
receive a fee or other compensation for services.
Any party causing the Trust REMIC to engage in any of the activities
prohibited in this Section shall be liable for the payment of any tax imposed on
the Trust REMIC pursuant to Code section 860F(a)(1) or 860G(d) as a result of
the Trust REMIC engaging in such activities.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1 Amendment.
---------
(a) This Agreement may be amended from time to time by the Depositor and
the Trustee by written agreement, without notice to or consent of the
Certificateholders, to cure any ambiguity or mistake, to correct or supplement
any provisions herein, to comply with any changes in the Code, or to make any
other provisions with respect to matters or questions arising under this
Agreement which shall not be inconsistent with the provisions of this Agreement;
provided, however, that such action shall not adversely affect the interests of
-------- -------
any Certificateholder, as evidenced by an Opinion of Counsel or written
notification from each Rating Agency to the effect that such amendment will not
cause such Rating Agency to lower or withdraw the then current ratings on the
Certificates, at the expense of the party requesting the change, delivered to
the Trustee and the Depositor; and provided, further, that no such amendment
-------- -------
shall reduce in any manner the amount of, or delay the timing of, payments
received on mortgage loans which are required to be distributed on any
Certificate without the consent of the holder of such Certificate, or change the
rights or obligations of any other party hereto
-39-
without the consent of such party. The Trustee shall give prompt written notice
to each Rating Agency of any amendment made pursuant to this Section 9.1(a).
--------------
(b) This Agreement also may be amended from time to time by the Depositor
and the Trustee with the consent of the Holders of Certificates entitled to at
least a majority of the Voting Rights for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Agreement or of modifying in any manner the rights of the Holders; provided,
--------
however, that no such amendment shall reduce in any manner the amount of, or
-------
delay the timing of, any payments which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate or reduce the
percentage for each Class of Certificates the Holders of which are required to
consent to any such amendment without the consent of the Holders of 100% of each
Class of Certificates affected thereby. Prior notice of any proposed amendment
pursuant to this Section 9.1(b) shall be given to each Rating Agency.
--------------
(c) It shall not be necessary for the consent of Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent shall approve the substance thereof.
(d) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel to the effect that such amendment or the exercise
of any power granted to the Depositor or the Trustee in accordance with such
amendment will not result in the imposition of a tax on any Trust REMIC, will
not cause any Trust REMIC to fail to qualify as a REMIC or will not cause the
portion of the Trust Fund exclusive of any Trust REMIC to fail to qualify as a
grantor trust at any time that any Certificate is outstanding. No amendment
shall have the effect of varying the latest possible maturity, principal amount
or interest rate of the Trust unless the Trustee shall have received an Opinion
of Counsel that the amendment will not cause the regular interest to lack fixed
terms within the meaning of the REMIC provisions.
(e) An amendment or supplement to the original issue discount legend shall
not be an amendment or supplement for purposes of this Article 9.
---------
SECTION 9.2 Counterparts.
------------
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
SECTION 9.3 Limitation on Rights of Certificateholders.
------------------------------------------
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
-40-
(b) No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a notice of a default by the
Depositor or the Trustee in the performance of any obligation hereunder, and of
the continuance thereof, as hereinbefore provided, and unless also the Holders
of Certificates entitled to at least 33% of the Voting Rights shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.
SECTION 9.4 Governing Law.
-------------
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS, WITHOUT GIVING EFFECT TO
PRINCIPLES OF CONFLICTS OF LAW (BUT WITH REFERENCE TO SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW, WHICH BY ITS TERMS APPLIES TO THIS AGREEMENT).
SECTION 9.5 Notices.
-------
All demands and notices hereunder shall be in writing and shall be deemed
effective upon receipt when delivered to (a) in the case of the Depositor, EQCC
Asset Backed Corporation, 00000 Xxxxxxxx Xxxx Xxxxxxxxx, Xxxxxxxxxxxx, Xxxxxxx
00000-0000, Attention: General Counsel, or such other address as may hereafter
be furnished to the Trustee in writing by the Depositor and (b) in the case of
the Trustee and the Securities Intermediary, [Name and Address], Attention:
Corporate Trust Department, or such other address as may hereafter be furnished
to the Depositor in writing by the Trustee. Any notice required or permitted to
be
-41-
mailed to a Certificateholder shall be given by first-class mail, postage
prepaid, at the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 9.6 Severability of Provisions.
--------------------------
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
SECTION 9.7 Successors and Assigns.
----------------------
The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Certificateholders.
SECTION 9.8 Article and Section Headings.
----------------------------
The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
-42-
WITNESS WHEREOF, the Depositor, the Trustee and the Securities Intermediary
have caused their names to be signed hereto by their respective officers
thereunto duly authorized and their respective seals, if required, duly
attested, to be hereunto affixed, all as of the day and year first above
written.
EQCC ASSET BACKED CORPORATION
By: ____________________________
Name: ____________________________
Title: ___________________________
[TRUSTEE],
as Trustee
By: ____________________________
Name: ____________________________
Title: ___________________________
[Trust Agreement]
EXHIBIT A
FORM OF CLASS A CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A-1
EQCC ASSET BACKED CERTIFICATES SERIES [2001-1]
CLASS [A-1] ASSET BACKED CERTIFICATE
THIS CLASS [A-1] CERTIFICATE REPRESENTS A REMIC REGULAR INTEREST UNDER THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED. [THIS CERTIFICATE WAS ISSUED WITH
ORIGINAL ISSUE DISCOUNT FOR FEDERAL INCOME TAX PURPOSES.]
THE PRINCIPAL OF THIS CERTIFICATE IS SUBJECT TO PREPAYMENT FROM TIME TO
TIME WITHOUT SURRENDER OF OR NOTATION ON THIS CERTIFICATE. ACCORDINGLY, THE
CERTIFICATE BALANCE OF THIS CERTIFICATE MAY BE LESS THAN THAT SET FORTH BELOW,
AND MAY BE ZERO. ANYONE ACQUIRING THIS CERTIFICATE MAY ASCERTAIN ITS CURRENT
CERTIFICATE BALANCE BY INQUIRY OF THE TRUSTEE.
PERCENTAGE INTEREST: ____% CERTIFICATE BALANCE OF THE CLASS [A-1]
CERTIFICATES AS OF THE CLOSING DATE:
DENOMINATION: $__________ $_________
DATE OF TRUST AGREEMENT: AGGREGATE PRINCIPAL BALANCE OF THE
AS OF ___________ 1, 20__ UNDERLYING CERTIFICATES AS OF THE CUT-
OFF DATE: $__________
CLOSING DATE: ___________, 20__
TRUSTEE:
[_______________]
FIRST PAYMENT DATE:
____________, 20__ CUSIP NO.: [________]
XX. 0
X-0
XXXX XXXXX BACKED CERTIFICATES SERIES [2001-1]
CLASS [A-1] ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists of
previously issued asset backed pass-through certificates (the "Underlying
Certificates") representing interests in mortgage loans, which Trust was formed
and Underlying Certificates sold by
EQCC ASSET BACKED CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN EQCC ASSET
BACKED CORPORATION, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING CERTIFICATES ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT:
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class [A-1] Certificates issued by EQCC Asset Backed Trust [2001-1] (the
"Trust"), which was created pursuant to a Trust Agreement, dated as specified
above (the "Trust Agreement"), between EQCC Asset Backed Corporation (the
"Depositor"), and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereinafter. The Trust consists of Underlying
Certificates. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned to them in the Trust Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate, by virtue of the acceptance hereof, assents and by which such
Holder is bound.
Distributions of principal of and interest on this Certificate (including
the final distribution on this Certificate) will be made, to the extent and
subject to the limitations set forth in the Trust Agreement, on the second
business day following the business day occurring on or after the 25th day of
each month commencing in ____________ 20__ (each a "Payment Date"), to the
Person in whose name this Certificate is registered at the close of business on
the last Business Day of the month immediately preceding the month of such
distribution, (the related "Record Date"). All sums distributed on this
Certificate are payable in the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
Principal and interest will be distributed on this Certificate on any
Payment Date in the manner specified in the Trust Agreement. Distributions
allocated to the Class [A-1] Certificates will be allocated among the
Certificates of such Class pro rata based upon their respective Percentage
Interests, with a final distribution to be made upon retirement of this
Certificate as set forth in the Trust Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the EQCC Asset Backed Certificates, Series [2001-1] (herein called
the "Certificates") and representing a
A-3
Percentage Interest in the Class of Certificates specified on the face hereof
equal to the quotient, expressed as a percentage, obtained by dividing the
denomination of this Certificate specified on the face hereof by the initial
aggregate Principal Balance of the Class [A-1] Certificates. The Certificates
are issued in four classes as specifically set forth in the Trust Agreement. The
Certificates will evidence in the aggregate 100% of the beneficial ownership of
the Trust.
The Certificates are limited in right of payment to certain collections on
the Underlying Certificates, all as more specifically set forth in the Trust
Agreement. As provided in the Trust Agreement, withdrawals from the Certificate
Account and related accounts shall be made from time to time for purposes other
than distributions to Holders, such purposes including certain expenses
incurred, with respect to the Underlying Certificates and administration of the
Trust.
So long as this Certificate is registered in the name of a Depository or
its nominee, the Trustee will make payments of principal and interest on this
Certificate by wire transfers of immediately available funds to the Depository
or its nominee. Otherwise, all distributions made on any Certificate pursuant
to the Trust Agreement will be made by or on behalf of the Trustee on each
Payment Date to the Holder of such Certificate as of the related Record Date (i)
by check mailed to such Holder at its address reflected in the Certificate
Register as of the related Record Date or (ii) if such Holder is the Holder of
Certificates of this Class with aggregate initial denominations of at least
$1,000,000, by wire transfer of immediately available funds to the account of
such Holder, upon receipt by the Trustee of a written request of such Holder
accompanied by the appropriate wiring instructions at or before the Closing Date
or, in the case of any wire instructions delivered after the Closing Date, at
least five Business Days prior to the related Record Date. A fee may be charged
by the Trustee to a Holder of Certificates for any distribution made to such
Holder by wire transfer. Notwithstanding the above, the final distribution on
this Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the office or agency of the Trustee specified in the final distribution
notice to Certificateholders.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Holders under the Trust
Agreement at any time by the Depositor and the Trustee, with the consent of the
Holders of Certificates evidencing at least a majority of the Voting Rights of
each Class affected by the proposed amendment (and in certain circumstances a
higher percentage of such Voting Rights as specified in the Trust Agreement).
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer or exchange hereof or in lieu herefor,
regardless of whether notation of such consent is made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Trust Agreement and subject to any limitations on
transfer of this Certificate by a Depository or its nominee and certain
limitations set forth in the Trust Agreement, the transfer of this Certificate
is registrable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the principal Corporate Trust Office of the
Trustee or such other offices or agencies appointed by the Trustee for that
purpose or such other locations, if any, provided in the Trust Agreement, duly
endorsed by, or accompanied by an
A-4
assignment in the form attached hereto or other written instrument of transfer
in form satisfactory to the Trustee and the Certificate Registrar duly executed
by the Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of the same Class in authorized
denominations will be issued to the designated transferee or transferees.
Subject to the terms of the Trust Agreement, the Certificates of this Class
will be registered as one or more Certificates held by a Depository or its
nominee and beneficial interests will be held by Beneficial Owners through the
book-entry facilities of such Depository or its nominee in minimum denominations
of $100,000 and integral multiples of $1 in excess thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized denominations as requested by the Holder surrendering
the same. No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor, the Trustee and the Certificate Registrar and any agent of
the Depositor, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.
The obligations created by the Trust Agreement and the Trust created
thereby shall terminate upon payment to the Holders of all amounts held by or on
behalf of the Trustee and required to be paid to them pursuant to the Trust
Agreement following the earlier of (a) the final payment of the last Underlying
Certificate remaining in the Trust or (b) a Terminating Purchase pursuant to the
terms of the Trust Agreement. Pursuant to the terms of the Trust Agreement, the
Holders of at least a 51% Percentage Interest of the Class R Certificates may
make a Terminating Purchase or cause a Terminating Purchase to be made on or
after the Payment Date on which the sum of the Certificate Balance of the
Certificates is less than 10% of the sum of the original Certificate Balance of
the Certificates. After a Terminating Purchase, the Termination Price shall be
applied to pay administrative expenses of the Trust and to make final
distributions on the Certificates as described in the Trust Agreement, and
thereafter any remaining assets of the Trust shall be released to the Holders of
the Residual Certificates (or shall be sold, with the proceeds of such sale
distributed to the Holders of the Residual Certificates), as described in the
Trust Agreement.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Trust Agreement or be valid for any
purpose.
THIS CERTIFICATE AND THE TRUST AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE INTERNAL STATE OF NEW YORK.
A-5
The Trustee has executed this Certificate on behalf of the Trust not in its
individual capacity but solely as Trustee under the Trust Agreement and the
Trustee shall be liable hereunder only in respect of the assets of the Trust.
A-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.
Dated: ________ ___, 20__ [TRUSTEE], NOT IN ITS INDIVIDUAL CAPACITY, BUT
SOLELY AS TRUSTEE
BY:___________________________
AUTHORIZED OFFICER
ATTEST:
______________________________
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS [A-1] CERTIFICATES REFERRED TO IN THE WITHIN-
MENTIONED TRUST AGREEMENT.
[CERTIFICATE REGISTRAR], AS CERTIFICATE
REGISTRAR
BY:___________________________
AUTHORIZED OFFICER
A-7
ABBREVIATIONS
The following abbreviations, when used in this Certificate, shall be construed
as though they were written out in full according to applicable laws or
regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--.....Custodian.........
TEN ENT--as tenants by the (Cus) (Minor)
entireties Under Uniform Gifts to Minors
JT TEN--as joint tenants with
rights of survivor- Act................
ship and not as Tenants (State)
in Common
Additional abbreviations may also be used though not
in the above list.
A-8
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE __________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of assignee)
the within Certificate and does hereby irrevocably constitute and appoint
____________ (Attorney) to transfer the said Certificate in the Certificate
Register 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 Certificate in every
particular without alteration or
enlargement or any change whatever.
_______________________________________________
[SIGNATURE GUARANTEED: The signature
must be guaranteed by a commercial bank
or trust company or by a member firm
of the New York Stock Exchange or another
national securities exchange.] Notarized or
witnessed signatures are not acceptable.
A-9
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds, to____________________________________________________________,
for the account of _______________________________, account number
__________________, or, if mailed by check, to ____________________________.
Applicable reports and statements should be mailed to
____________________________________________. This information is provided by
__________________________________________________, the assignee named above, or
___________________________, as its agent.
A-10
EXHIBIT B
FORM OF CLASS IO CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
B-1
EQCC ASSET BACKED CERTIFICATES SERIES [2001-1]
CLASS IO ASSET BACKED CERTIFICATE
THIS CLASS IO CERTIFICATE REPRESENTS A REMIC REGULAR INTEREST UNDER THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED.
PERCENTAGE INTEREST: ____% NOTIONAL BALANCE OF THE CLASS IO
CERTIFICATES AS OF THE CLOSING DATE:
DATE OF TRUST AGREEMENT: $___________
AS OF ___________ 1, 20__
CLOSING DATE: ___________, 20__ AGGREGATE PRINCIPAL BALANCE OF THE
UNDERLYING CERTIFICATES AS OF THE CUT-
OFF DATE: $__________
FIRST PAYMENT DATE: TRUSTEE:
____________, 20__ [_______________]
CUSIP NO.: [________]
XX. 0
X-0
XXXX XXXXX BACKED CERTIFICATES SERIES 2001-[__]
CLASS IO ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists of
previously issued asset backed pass-through certificates (the "Underlying
Certificates") representing interests in mortgage loans, which Trust was formed
and Underlying Certificates sold by
EQCC ASSET BACKED CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN EQCC ASSET
BACKED CORPORATION, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING CERTIFICATES ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT:
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class IO Certificates issued by EQCC Certificate Asset Backed
Certificates Series [2001-1] (the "Trust"), which was created pursuant to a
Trust Agreement, dated as specified above (the "Trust Agreement"), among EQCC
Asset Backed Corporation (the "Depositor") and the Trustee, a summary of certain
of the pertinent provisions of which is set forth hereinafter. The Trust
consists of Underlying Certificates. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned to them in the Trust
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Holder of this Certificate, by virtue of the acceptance hereof, assents and by
which such Holder is bound.
The Holder of this Certificate will not be entitled to any scheduled
distributions of principal. Distributions on this Certificate, if any
(including the final distribution on this Certificate), will be made, to the
extent and subject to the limitations set forth in the Trust Agreement, on the
second business day following the business day occurring on or after the 25th
day of each month commencing in ____________ 20__ (each a "Payment Date"), to
the Person in whose name this Certificate is registered at the close of business
on the last Business Day of the month immediately preceding the month of such
distribution, (the related "Record Date"). All sums distributed on this
Certificate are payable in the coin or currency of the United States of America
as at the time of payment is legal tender for the payment of public and private
debts.
Distributions on this Certificate, if any, will be distributed on any
Payment Date in the manner specified in the Trust Agreement. Distributions
allocated to the Class IO Certificates will be allocated among the Certificates
of such Class pro rata based upon their respective Percentage Interests, with a
final distribution to be made upon retirement of this Certificate as set forth
in the Trust Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the EQCC Asset Backed Certificates Series [2001-1] (herein called
the "Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof. The Certificates are
B-3
issued in four classes as specifically set forth in the Trust Agreement. The
Certificates will evidence in the aggregate 100% of the beneficial ownership of
the Trust.
The Certificates are limited in right of payment to certain collections on
the Underlying Certificates, all as more specifically set forth in the Trust
Agreement. As provided in the Trust Agreement, withdrawals from the Certificate
Account and related accounts shall be made from time to time for purposes other
than distributions to Holders, such purposes including certain expenses
incurred, with respect to the Underlying Certificates and administration of the
Trust.
So long as this Certificate is registered in the name of a Depository or
its nominee, the Trustee will make payments of principal and interest on this
Certificate by wire transfers of immediately available funds to the Depository
or its nominee. Otherwise, all distributions made on any Certificate pursuant
to the Trust Agreement will be made by or on behalf of the Trustee on each
Payment Date to the Holder of such Certificate as of the related Record Date (i)
by check mailed to such Holder at its address reflected in the Certificate
Register as of the related Record Date or (ii) if such Holder is the Holder of
Certificates of this Class evidencing a Percentage Interest of 10% or greater,
by wire transfer of immediately available funds to the account of such Holder,
upon receipt by the Trustee of a written request of such Holder accompanied by
the appropriate wiring instructions at or before the Closing Date or, in the
case of any wire instructions delivered after the Closing Date, at least five
Business Days prior to the related Record Date. A fee may be charged by the
Trustee to a Holder of Certificates for any distribution made to such Holder by
wire transfer. Notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency of the Trustee specified in the final distribution notice to
Certificateholders.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor and the Trustee and the rights of the Holders under the Trust
Agreement at any time by the Depositor and the Trustee, with the consent of the
Holders of Certificates evidencing at least a majority of the Voting Rights of
each Class IOffected by the proposed amendment (and in certain circumstances a
higher percentage of such Voting Rights as specified in the Trust Agreement).
Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer or exchange hereof or in lieu herefor,
regardless of whether notation of such consent is made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Trust Agreement and subject to any limitations on
transfer of this Certificate by a Depository or its nominee and certain
limitations set forth in the Trust Agreement, the transfer of this Certificate
is registrable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the principal Corporate Trust Office of the
Trustee or such other offices or agencies appointed by the Trustee for that
purpose or such other locations, if any, provided in the Trust Agreement, duly
endorsed by, or accompanied by an assignment in the form attached hereto or
other written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
B-4
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations will be issued to the designated
transferee or transferees.
Subject to the terms of the Trust Agreement, the Certificates of this Class
will be registered as one or more Certificates held by a Depository or its
nominee and beneficial interests will be held by Beneficial Owners through the
book-entry facilities of such Depository or its nominee in minimum denominations
of $100,000 and integral multiples of $1 in excess thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized denominations as requested by the Holder surrendering
the same. No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
The Depositor, the Trustee and the Certificate Registrar and any agent of
the Depositor, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.
The obligations created by the Trust Agreement and the Trust created
thereby shall terminate upon payment to the Holders of all amounts held by or on
behalf of the Trustee and required to be paid to them pursuant to the Trust
Agreement following the earlier of (a) the final payment of the last Underlying
Certificate remaining in the Trust or (b) a Terminating Purchase pursuant to the
terms of the Trust Agreement. Pursuant to the terms of the Trust Agreement, the
Holders of at least a 51% Percentage Interest of the Class R Certificates may
make a Terminating Purchase or cause a Terminating Purchase to be made on or
after the Payment Date on which the sum of the Certificate Balance of the
Certificates is less than 10% of the sum of the original Certificate Balance of
the Certificates. After a Terminating Purchase, the Termination Price shall be
applied to pay administrative expenses of the Trust and to make final
distributions on the Certificates as described in the Trust Agreement, and
thereafter any remaining assets of the Trust shall be released to the Holders of
the Residual Certificates (or shall be sold, with the proceeds of such sale
distributed to the Holders of the Residual Certificates), as described in the
Trust Agreement.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Trust Agreement or be valid for any
purpose.
THIS CERTIFICATE AND THE TRUST AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE LAWS OF THE INTERNAL STATE OF NEW YORK.
The Trustee has executed this Certificate on behalf of the Trust not in its
individual capacity but solely as Trustee under the Trust Agreement and the
Trustee shall be liable hereunder only in respect of the assets of the Trust.
B-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.
Dated: ________ ___, 20__ [TRUSTEE], NOT IN ITS INDIVIDUAL CAPACITY, BUT
SOLELY AS TRUSTEE
BY:___________________________
AUTHORIZED OFFICER
ATTEST:
______________________________
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS IO CERTIFICATES REFERRED TO IN THE WITHIN-
MENTIONED TRUST AGREEMENT.
[CERTIFICATE REGISTRAR], AS CERTIFICATE
REGISTRAR
BY:_____________________________
AUTHORIZED OFFICER
B-6
ABBREVIATIONS
The following abbreviations, when used in this Certificate, shall be construed
as though they were written out in full according to applicable laws or
regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--.....Custodian........
TEN ENT--as tenants by the (Cus) (Minor)
entireties Under Uniform Gifts to Minors
JT TEN--as joint tenants with
rights of survivor- Act................................
ship and not as Tenants (State)
in Common
Additional abbreviations may also be used though not
in the above list.
B-7
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE __________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of assignee)
the within Certificate and does hereby irrevocably constitute and appoint
____________ (Attorney) to transfer the said Certificate in the Certificate
Register 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 Certificate in every
particular without alteration or
enlargement or any change whatever.
__________________________________________
[SIGNATURE GUARANTEED: The signature
must be guaranteed by a commercial bank
or trust company or by a member firm
of the New York Stock Exchange or another
national securities exchange.] Notarized or
witnessed signatures are not acceptable.
B-8
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds, to____________________________________________________________,
for the account of _______________________________, account number
__________________, or, if mailed by check, to ____________________________.
Applicable reports and statements should be mailed to
____________________________________________. This information is provided by
__________________________________________________, the assignee named above, or
___________________________, as its agent.
B-9
EXHIBIT C
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933 (THE "1933 ACT") OR THE SECURITIES LAWS OF ANY STATE. ANY RESALE,
TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE WITHOUT SUCH REGISTRATION OR
QUALIFICATION MAY BE MADE ONLY IN A TRANSACTION WHICH DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION AND WHICH IS IN ACCORDANCE WITH THE PROVISIONS OF
SECTION 4.4 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
SOLELY FOR US. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A DISQUALIFIED NON-
U.S.PERSON OR A DISQUALIFIED ORGANIZATION OR AGENT THEREOF.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO AN EMPLOYEE BENEFIT PLAN OR
OTHER RETIREMENT ARRANGEMENT, INCLUDING INDIVIDUAL RETIREMENT ACCOUNTS AND
ANNUITIES, XXXXX PLANS AND COLLECTIVE INVESTMENT FUNDS AND SEPARATE ACCOUNTS IN
WHICH SUCH PLANS, ACCOUNTS OR ARRANGEMENTS ARE INVESTED, THAT IS SUBJECT TO THE
FIDUCIARY RESPONSIBILITY PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY
ACT OF 1974, AS AMENDED ("ERISA") OR SECTION 4975 OF THE CODE (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) (EACH, AN "ERISA PLAN").
THE TRUSTEE MUST GIVE ITS WRITTEN CONSENT TO ANY TRANSFER OF THIS CLASS R
CERTIFICATE. AS A CONDITION TO THIS CONSENT, A TRANSFEREE MUST PROVIDE THE
TRUSTEE WITH A RESIDUAL TRANSFEREE AGREEMENT CONTAINING CERTAIN REPRESENTATIONS
AND COVENANTS, AN AFFIDAVIT RELATING TO VARIOUS TAX MATTERS AND AN AFFIDAVIT
RELATING TO VARIOUS ERISA MATTERS (AND AN OPINION OF COUNSEL AS TO ERISA MATTERS
IF REQUIRED UNDER SUCH AFFIDAVIT), ALL AS DESCRIBED IN THE TRUST AGREEMENT
REFERRED TO HEREIN. NOTWITHSTANDING THE FULFILLMENT OF THE PREREQUISITES
DESCRIBED ABOVE, THE SERVICER MAY WITHHOLD ITS CONSENT TO A TRANSFER TO THE
EXTENT NECESSARY TO AVOID A RISK OF (1) DISQUALIFICATION OF THE REMIC AS A REMIC
OR (2) THE IMPOSITION OF A TAX UPON THE REMIC.
C-1
THE HOLDER OF THIS RESIDUAL CERTIFICATE IS NOT ENTITLED TO SCHEDULED
DISTRIBUTIONS OF PRINCIPAL OR INTEREST. THIS CERTIFICATE MAY BE A "NON-ECONOMIC
RESIDUAL INTEREST," CERTAIN TRANSFERS OF WHICH MAY BE DISREGARDED FOR FEDERAL
INCOME TAX PURPOSES. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS
CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
C-2
EQCC ASSET BACKED CERTIFICATES SERIES [2001-1]
CLASS R ASSET BACKED CERTIFICATE
THIS CLASS R CERTIFICATE REPRESENTS BENEFICIAL OWNERSHIP OF A REMIC
RESIDUAL INTEREST IN A REMIC UNDER THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
PERCENTAGE INTEREST: ___% AGGREGATE SCHEDULED PRINCIPAL BALANCE
OF THE UNDERLYING CERTIFICATES AS OF
DATE OF TRUST AGREEMENT: THE CUT-OFF DATE:
AS OF ____________ 1, 20__ $____________
CLOSING DATE: ________ ___, 20__ TRUSTEE:
[_______________]
FIRST PAYMENT DATE:
____________ __, 20__
XX. 0
X-0
XXXX XXXXX BACKED CERTIFICATES SERIES [2001-1]
CLASS R ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in a Trust that consists of
previously issued asset-backed Certificates (the "Underlying Certificates")
representing interests in mortgage loans, which Trust was formed and Underlying
Certificates sold by
EQCC ASSET BACKED CORPORATION
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN EQCC ASSET
BACKED CORPORATION, THE TRUSTEE OR ANY OF THEIR AFFILIATES. NEITHER THIS
CERTIFICATE NOR THE UNDERLYING CERTIFICATES ARE GUARANTEED BY ANY AGENCY OR
INSTRUMENTALITY OF THE UNITED STATES.
THIS CERTIFIES THAT:
is the registered owner of the Percentage Interest evidenced by this Certificate
in the Class R Certificates issued by EQCC Asset Backed Trust [2001-1] (the
"Trust"), which was created pursuant to a Trust Agreement, dated as specified
above (the "Trust Agreement"), between EQCC Asset Backed Corporation (the
"Depositor") and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereinafter. The Trust consists of a pool of Underlying
Certificates. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned to them in the Trust Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate, by virtue of the acceptance hereof, assents and by which such
Holder is bound.
The Holder of this Certificate will not be entitled to any scheduled
distributions of principal or interest. Distributions on this Certificate, if
any (including the final distribution on this Certificate), will be made on the
second business day after the business day occurring on or after the 25th day of
each month commencing in _____ 20__ (a "Payment Date"), to the Person in whose
name this Certificate is registered at the close of business on the last
Business Day of the month immediately preceding the month of such distribution
(the related "Record Date"). All sums distributed on this Certificate are
payable in the coin or currency of the United States of America as at the time
of payment is legal tender for the payment of public and private debts.
Distributions, if any, will be made to the Holders of the Class R
Certificates as described in the Trust Agreement. Distributions allocated to
the Class R Certificates will be allocated among the Certificates of such Class
pro rata based upon their respective Percentage Interests, with a final
distribution to be made upon retirement of this Certificate as set forth in the
Trust Agreement.
This Certificate is one of a duly authorized issue of Certificates
designated as the EQCC Asset Backed Certificates Series [2001-1], (herein called
the "Certificates") and representing a Percentage Interest in the Class of
Certificates specified on the face hereof. The Certificates are issued in four
classes as specifically set forth in the Trust Agreement. The Class R
Certificates
C-4
are sometimes referred to as the "Residual Certificates." The Certificates will
evidence in the aggregate 100% of the beneficial ownership of the Trust.
The Certificates are limited in right of payment to certain collections on
the Underlying Certificates, all as more specifically set forth in the Trust
Agreement. As provided in the Trust Agreement, withdrawals from the Certificate
Account and related accounts shall be made from time to time for purposes other
than distributions to Holders, such purposes including certain expenses incurred
with respect to the Underlying Certificates and administration of the Trust.
All distributions made on any Certificate pursuant to the Trust Agreement
will be made by or on behalf of the Trustee on each Payment Date to the Holder
of such Certificate as of the related Record Date (i) by check mailed to such
Holder at its address reflected in the Certificate Register as of the related
Record Date or (ii) if such Holder is the Holder of Certificates of this Class
evidencing a Percentage Interest of 10% or greater, by wire transfer of
immediately available funds to the account of such Holder, upon receipt by the
Trustee of a written request of such Holder accompanied by the appropriate
wiring instructions at or before the Closing Date or, in the case of any wire
instructions delivered after the Closing Date, at least five Business Days prior
to the related Record Date. A fee may be charged by the Trustee to a Holder of
Certificates for any distribution made to such Holder by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Trustee of the pendency of such distribution and
only upon presentation and surrender of this Certificate at the office or agency
of the Trustee specified in the final distribution notice to Certificateholders.
An election will be made to treat certain of the assets assigned to the
Trust as a real estate mortgage investment conduit (a "REMIC") under the
Internal Revenue Code of 1986, as amended (the "Code"). Assuming that the
election is made properly and that certain qualification requirements concerning
the Underlying Certificates and the Certificates are met, the Holder of this
Certificate will be treated for federal income tax purposes as the beneficial
owner of a "residual interest" in the REMIC. Accordingly, the Holder of this
Class R Certificate will be taxed on its pro rata share of the REMIC's taxable
income or net loss. The requirement that the Holder of this Class R Certificate
report its pro rata share of such income or loss will continue until there are
no Certificates of any Class outstanding.
Pursuant to (and subject to the limitations set forth in) the Trust
Agreement, the Trustee, as agent of the REMIC (the "Tax Matters Person" or
"TMP"), will provide each Holder of a Class R Certificate with information
sufficient to enable such Holder to prepare (i) its federal income tax and
information returns and (ii) any reports required by the Code regarding the
Certificates, except where such information is provided to each such Holder by
the Trustee pursuant to the Trust Agreement. As the Holder of a residual
interest in the REMIC, the Holder of a Class R Certificate will have continuing
administrative rights and obligations generally similar to those of a partner
with respect to its partnership. Such rights and obligations principally
concern the REMIC's federal income tax and information returns and the
representation of the REMIC in administrative or judicial proceedings involving
the Internal Revenue Service. The TMP, however, will act on behalf of the
Holders of the Class R Certificates as the REMIC's representative for such
proceedings. The REMIC's federal tax and information returns will be prepared
by the TMP, and signed and filed by the Trustee. Pursuant to the Trust
Agreement, if the TMP is unable for any reason to fulfill its duties as TMP,
then the
C-5
Holder of the largest Percentage Interest of the Residual Certificates, without
compensation, shall become the successor TMP for the REMIC.
By accepting this Certificate, the Holder of this Certificate agrees to be
bound by all of the provisions of the Trust Agreement, and, in particular,
agrees that it shall (i) take any action required by the Code or Treasury
regulations thereunder in order to create or maintain the REMIC status of the
REMIC and (ii) refrain from taking any action that could endanger such status.
The Trust Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Depositor, the Trustee and the rights of the Holders under the Trust Agreement
at any time by the Depositor and the Trustee, with the consent of the Holders of
Certificates evidencing at least a majority of the Voting Rights of each Class
affected by the proposed amendment (and in certain circumstances a higher
percentage of such Voting Rights as specified in the Trust Agreement). Any
such consent by the Holder of this Certificate shall be conclusive and binding
on such Holder and upon all future Holders of this Certificate and of any
Certificate issued upon the transfer or exchange hereof or in lieu herefor,
regardless of whether notation of such consent is made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of the Holders of any of the Certificates.
As provided in the Trust Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the principal Corporate Trust Office of the Trustee or such other
offices or agencies appointed by the Trustee for that purpose or such other
locations, if any, provided in the Trust Agreement, duly endorsed by, or
accompanied by an assignment in the form attached hereto or other written
instrument of transfer in form satisfactory to the Trustee and the Certificate
Registrar duly executed by the Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of the same
Class in authorized denominations will be issued to the designated transferee or
transferees.
The Certificates of this Class are issuable in fully-registered,
certificated form without coupons in minimum Percentage Interests of 10% and
integral multiples thereof.
As provided in the Trust Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of the
same Class in authorized denominations as requested by the Holder surrendering
the same. No service charge will be made for any such registration of transfer
or exchange, but the Trustee may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with any
transfer or exchange of Certificates.
No transfer of any Class R Certificates shall be made unless that transfer
is made pursuant to an effective registration statement under the Securities Act
and effective registration or qualification under applicable state securities
laws, or is made in a transaction that does not require such registration or
qualification. In the event that a transfer is to be made without registration
or qualification under the Securities Act and applicable state securities laws,
the Trustee shall not register such transfer (other than in connection with the
initial transfer of any
C-6
Class R Certificates by the Depositor to an Affiliate of the Depositor) (i)
unless such transfer is made in reliance upon Rule 144A under the Securities Act
(as evidenced by a Rule 144A Investment Agreement delivered to the Trustee), the
Trustee and the Depositor shall require a written Opinion of Counsel (which may
be in-house counsel) acceptable to and in form and substance reasonably
satisfactory to the Trustee and the Depositor that such transfer may be made
pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the Securities Act or is being made pursuant to the Securities
Act, which Opinion of Counsel shall not be an expense of the Trustee or the
Depositor or (ii) the Trustee shall require the transferor to execute a
transferor certificate and the transferee to execute an investment letter
acceptable to and in the form and substance reasonably satisfactory to the
Depositor and the Trustee certifying to the Depositor and the Trustee the facts
surrounding such transfer, which investment letter shall not be an expense of
the Trustee or the Depositor. Neither the Depositor nor the Trustee is obligated
to register or qualify any of the Class R Certificates under the Securities Act
or any other securities law or to take any action not otherwise required under
the Trust Agreement to permit the transfer of such Certificates without such
registration or qualification. Any such Holder desiring to effect such transfer
shall, and does hereby agree to, indemnify the Depositor and the Trustee against
any liability that may result if the transfer is not exempt from registration
under the Act and all applicable state securities laws or is not made in
accordance with such federal and state laws.
Further, no transfer of a Class R Certificate shall be made unless and
until the prospective transferee provides the Trustee with a properly executed
and completed Benefit Plan Affidavit (and a Benefit Plan Opinion, if required
pursuant to the Benefit Plan Affidavit), which Affidavit (and Opinion, if
required) shall not be obtained at the expense of the Trustee or the Depositor.
Notwithstanding anything herein to the contrary, any purported transfer of a
Class R Certificate to or on behalf of a Plan Investor without delivery of a
Benefit Plan Opinion shall be null and void.
In addition, the Trustee will not consent to any proposed transfer or sale
to any investor that the Trustee knows to be a Disqualified Organization. As
prerequisites to the Trustee's consent to any transfer of a Class R Certificate
(or any beneficial interest therein), the proposed transferee thereof must
provide the Trustee with (i) a Residual Transferee Agreement and (ii) (A) if the
proposed transferee is a non-United States Person, an affidavit of the proposed
transferee in substantially the form attached as Exhibit F-1 to Exhibit F to the
----------- ---------
Trust Agreement and a Certificate of the transferor stating whether the Class R
Certificate has "tax avoidance potential" as defined in Treasury Regulations
Section 1.860G-3(a)(2) or (B) if the proposed transferee is a U.S. Person, an
affidavit of the proposed transferee in substantially the form attached as
Exhibit F-2 to Exhibit F to the Trust Agreement. Notwithstanding the
----------- ---------
fulfillment of the prerequisites described above, the Trustee may withhold its
consent to a transfer, but only to the extent necessary to avoid a risk of (i)
disqualification of the Trust REMIC as a REMIC or (ii) the imposition of a tax
upon the Trust REMIC. In addition, the Trustee shall not give its consent to
the transfer of less than an entire interest in a Class R Certificate unless (A)
the interest transferred is an undivided interest or (B) the transferor or the
transferee provides the Trustee with an Opinion of Counsel obtained at its own
expense that the transfer will not jeopardize the REMIC status of the Trust
REMIC. Any attempted transfer in violation of the foregoing restrictions shall
be null and void and shall not be recognized by the Trustee.
C-7
If a tax or a reporting cost is borne by the REMIC as a result of the
transfer of a Class R Certificate (or any beneficial interest therein) in
violation of the restrictions set forth herein and in the Trust Agreement, the
Trustee, shall pay such tax or reporting cost with amounts that otherwise would
have been paid to the transferee of the Class R Certificate (or beneficial
interest therein). In that event, neither the transferee nor the transferor
shall have any right to seek repayment of such amounts from the Depositor, the
Trustee, the Trust, the REMIC or any other Holders, and none of such parties
shall have any liability for payment of any such tax or reporting cost.
The Depositor, the Trustee and the Certificate Registrar and any agent of
the Depositor, the Trustee or the Certificate Registrar may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and neither the Depositor, the Trustee, the Certificate Registrar nor any such
agent shall be affected by notice to the contrary.
The obligations created by the Trust Agreement and the Trust created
thereby shall terminate upon payment to the Holders of all amounts held by or on
behalf of the Trustee and required to be paid to them pursuant to the Trust
Agreement following the earlier of (a) the final payment of any Underlying
Certificates remaining in the Trust or (b) a Terminating Purchase pursuant to
the terms of the Trust Agreement. Pursuant to the terms of the Trust Agreement,
the Holders of at least a 51% Percentage Interest of the Class R Certificates
may make a Terminating Purchase or cause a Terminating Purchase to be made on or
after the Payment Date on which the sum of the Certificate Balance of the
Certificates is less than 10% of the sum of the original Certificate Balance of
the Certificates. After a Terminating Purchase, the Termination Price shall be
applied to pay administrative expenses of the Trust and to make final
distributions on the Certificates as described in the Trust Agreement, and
thereafter any remaining Underlying Certificates of the Trust shall be released
to the Holders of the Residual Certificates (or shall be sold, with the proceeds
of such sale distributed to the Holders of the Residual Certificates), as
described in the Trust Agreement.
Unless the Certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not represent
entitlement to any benefit under the Trust Agreement or be valid for any
purpose.
THIS CERTIFICATE AND THE TRUST AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH, AND GOVERNED BY, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
This Class R Certificate is a security governed by Article 8 of the Uniform
Commercial Code.
The Trustee has executed this Certificate on behalf of the Trust not in its
individual capacity but solely as Trustee under the Trust Agreement and the
Trustee shall be liable hereunder only in respect of the assets of the Trust.
C-8
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed under its official seal.
Dated: ________ ___, 20__ [TRUSTEE], NOT IN ITS INDIVIDUAL CAPACITY, BUT
SOLELY, AS TRUSTEE
BY:___________________________
AUTHORIZED OFFICER
ATTEST:
______________________________
AUTHORIZED OFFICER
CERTIFICATE OF AUTHENTICATION
THIS IS ONE OF THE CLASS R CERTIFICATES REFERRED TO IN THE WITHIN-MENTIONED
TRUST AGREEMENT.
[CERTIFICATE REGISTRAR], AS CERTIFICATE REGISTRAR
BY:_____________________________
AUTHORIZED OFFICER
C-9
ABBREVIATIONS
The following abbreviations, when used in this Certificate, shall be
construed as though they were written out in full according to applicable laws
or regulations:
TEN COM--as tenants in common UNIF GIFT MIN ACT--.....Custodian..........
TEN ENT--as tenants by the (Cus) (Minor)
entireties Under Uniform Gifts to Minors
JT TEN--as joint tenants with
rights of survivor- Act...........................
ship and not as Tenants (State)
in Common
Additional abbreviations may also be used though not
in the above list.
C-10
FORM OF TRANSFER
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ___________________________________________________________________________
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE___________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address of assignee)
the within Certificate and does hereby irrevocably constitute and appoint
____________ (Attorney) to transfer the said Certificate in the Certificate
Register 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 Certificate in every
particular without alteration or
enlargement or any change whatever.
__________________________________________
[SIGNATURE GUARANTEED: The signature
must be guaranteed by a commercial bank
or trust company or by a member firm
of the New York Stock Exchange or another
national securities exchange.] Notarized or
witnessed signatures are not acceptable.
C-11
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds,to__________________________________________
______________________________________________________________for the account of
______________________________,account number ________________, or, if mailed by
check, to ________________________. Applicable reports and statements should be
mailed to_____________________________________. This information is provided
by__________________________________________________, the assignee named above,
or______________________________________________________,as its agent.
C-12
EXHIBIT D
EQCC UNDERLYING CERTIFICATE SCHEDULE
PERCENTAGE PRINCIPAL
SERIES CLASS INTEREST AMOUNT
------ ----- -------- ------
D-1
EXHIBIT E
FORM OF RULE 144A INVESTMENT AGREEMENT
Description of Rule 144A Certificates:
EQCC Asset Backed Certificates Series [2001-1]
Class R Certificates
_____ Initial Principal Amount
Issued Pursuant to a Trust Agreement dated as of [_________,
20__] between EQCC Asset Backed Corporation, as depositor
"Depositor"), and [Trustee], as Trustee (the "Trustee")
The undersigned seller, as registered holder (the "Transferor"), intends to
transfer the Rule 144A Certificates described above to the undersigned buyer
(the "Buyer").
1. In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Certificates were issued, the Transferor hereby
certifies the following facts: Neither the Transferor nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Certificates, any interest in the Rule 144A Certificates or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Certificates, or otherwise approached or
negotiated with respect to the Rule 144A Certificates, any interest in the Rule
144A Certificates or any other similar security with, any person in any manner,
or made any general solicitation by means of general advertising or in any other
manner, or taken any other action, which would constitute a distribution of the
Rule 144A Certificates under the Securities Act of 1933, as amended (the
"Securities Act"), or which would render the disposition of the Rule 144A
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, and that the Transferor has not offered the Rule
144A Certificates to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the Securities Act.
2. The Buyer warrants and represents to, and covenants with, the
Transferor, the Trustee and the Depositor pursuant to Section 4.4 of the Trust
Agreement as follows:
a. The Buyer understands that the Rule 144A Certificates have not
been registered under the Securities Act or the securities laws of any
state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Certificates.
c. The Buyer has been furnished with all information regarding the
Rule 144A Certificates that it has requested from the Transferor and the
Trustee.
E-1
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Certificates, any interest in the Rule 144A Certificates or any other
similar security to, or solicited any offer to buy or accept a transfer,
pledge or other disposition of the Rule 144A Certificates, any interest in
the Rule 144A Certificates or any other similar security from, or otherwise
approached or negotiated with respect to the Rule 144A Certificates, any
interest in the Rule 144A Certificates or any other similar security with,
any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Rule 144A Certificates under the
Securities Act or that would render the disposition of the Rule 144A
Certificates a violation of Section 5 of the Securities Act or require
registration pursuant thereto, nor will it act, nor has it authorized or
will it authorize any person to act, in such manner with respect to the
Rule 144A Certificates.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the Securities Act and has completed either of
the forms of certification to that effect attached hereto as Annex 1 or
Annex 2. The Buyer is aware that the sale to it is being made in reliance
on Rule 144A. The Buyer is acquiring the Rule 144A Certificates for its
own account or the account of other qualified institutional buyers and
understands that such Rule 144A Certificates may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the resale,
pledge or transfer is being made in reliance on Rule 144A, or (ii) pursuant
to another exemption from registration under the Securities Act.
3. The Buyer represents either (i) that it is not an employee benefit
plan or retirement arrangement, including individual retirement accounts and
annuities, Xxxxx plans and collective investment funds in which such plans,
accounts, annuities or arrangements are invested, that are described in or
subject to the Department of Labor Regulations, the Employee Retirement Income
Security Act of 1974, as amended ("ERISA") or corresponding provisions of the
Internal Revenue Code of 1986, as amended (the "Code") (a "Plan"), a person
acting on behalf of a Plan or a person using the assets of a Plan (a Plan or any
such person, a "Plan Investor"); or (ii) that an exemption from application of
the prohibited transaction provisions of Sections 406 and 407 of ERISA and
Section 4975 of the Code will apply to the acquisition, holding and resale of
the Rule 144A Securities by the Buyer and to transactions in connection with the
administration, servicing, operation and management of the Trust.
4. No transfer of all or any portion of a Class R Certificate shall be
made to a transferee that is a Plan Investor unless such transfer qualifies for
an exemption from application of the prohibited transaction provisions of
Sections 401 and 407 of ERISA and Section 4975, and the purchaser makes the
representation set forth in paragraph 3 hereof.
5. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
E-2
WITNESS WHEREOF, each of the parties has executed this document as of the
date set forth below.
_________________________________ ________________________________
Print Name of Transferor Print Name of Buyer
By:______________________________ By:____________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No._____________________________ No.____________________________
Date:___________________________ Date:__________________________
E-3
ANNEX 1 TO EXHIBIT E
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $_____________/1/ in securities (except for the excluded
securities referred to below) as of the end of the Buyer's most recent fiscal
year (such amount being calculated in accordance with Rule 144A) and (ii) the
Buyer satisfies the criteria in the category marked below.
____ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts or
similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code of 1986.
____ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is attached
hereto.
____ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead association
or similar institution, which is supervised and examined by a State or
Federal authority having supervision over any such institutions or is
a foreign savings and loan association or equivalent institution and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements.
____ Broker-dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
______________________________
/1/ Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.
E-4
____ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State, territory or the District of Columbia.
____ State or Local Plan. The Buyer is a plan established and maintained by
a State, its political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the benefit of its
employees.
____ ERISA Plan. The Buyer is an employee benefit plan within the meaning
of Title I of the Employee Retirement Income Security Act of 1974.
____ Investment Adviser. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
____ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
____ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
____ Trust Fund. The Buyer is a Trust Fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established
and maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the
meaning of Title I of the Employee Retirement Income Security Act of
1974, but is not a Trust Fund that includes as participants individual
retirement accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
E-5
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Underlying
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.
6. Will the Buyer be purchasing the Rule 144A Certificates only for the
Buyer's own account?
Yes ____ No ____
If the answer to the foregoing question is "no", the Buyer agrees that, in
connection with any purchase of securities sold to the Buyer for the account of
a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein during the
period between the date of this certification and the date the Buyer purchases
the Rule 144A Certificates. Unless such notice is given, the Buyer's purchase of
the Rule 144A Certificates will constitute a reaffirmation of this certification
as of the date of such purchase.
______________________________________
Print Name of Buyer
By: __________________________________
Name:
Title:
Date:_________________________________
E-6
ANNEX 2 TO EXHIBIT E
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because Buyer is part of a Family of
Investment Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $______________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $______________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with
Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that each of
the parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
E-7
6. The Buyer will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein during the
period between the date of this certification and the date the Buyer purchases
the Rule 144A Certificates. Unless such notice is given, the Buyer's purchase of
the Rule 144A Certificates will constitute a reaffirmation of this certification
as of the date of such purchase.
_________________________
Print Name of Buyer
By:______________________
Name:
Title:
IF AN ADVISER:
_________________________
Print Name of Buyer
Date:____________________
E-8
EXHIBIT F
FORM OF RESIDUAL TRANSFEREE AGREEMENT
RESIDUAL TRANSFEREE AGREEMENT
EQCC ASSET BACKED CORPORATION
EQCC ASSET BACKED CERTIFICATES SERIES [2001-__]
CLASS R CERTIFICATES
______________
[Trustee], as Trustee
[Address of Trustee]
EQCC Asset Backed Corporation
00000 Xxxxxxxx Xxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Attention: General Counsel
Re: EQCC Certificate Asset Backed Certificates Series [2001-__], Class R,
representing a ___% Percentage Interest
Ladies and Gentlemen:
The undersigned (the "Transferee") proposes to purchase the captioned
Certificates (the "Residual Certificates"), issued by the Trust established
pursuant to a trust agreement dated as of ___________, 20__ (the "Trust
Agreement"), among EQCC Asset Backed Corporation (the "Depositor"), and
[Trustee], as Trustee, (the "Agreement"). In doing so the Transferee hereby
acknowledges and agrees as follows:
Section 1. Definitions. Each capitalized term used herein and not otherwise
defined herein shall have the meaning ascribed to it in the Agreement.
Section 2. Representations and Warranties of the Transferee. In connection
with the proposed transfer of the Residual Certificates, the Transferee
represents and warrants to the Depositor, the Trustee and the Trust as follows:
(a) The Transferee has knowledge in investment and business
matters and is capable of evaluating the merits and risks of an investment
in the Residual Certificates; the Transferee has sought such accounting,
legal and tax advice as it has considered necessary to make an informed
decision; and the Transferee is able to bear the economic risk of an
investment in the Residual Certificates and can afford a complete loss of
such investment.
F-1
(b) The Transferee represents that (i) it understands that the
Residual Certificates represent for federal income tax purposes the
"residual interest" in a real estate mortgage investment conduit ("REMIC")
and that, as the holder of the Residual Certificates, it will be required
to take into account, in determining its taxable income, its pro rata share
of the taxable income of such REMIC, (ii) it understands that it may incur
federal income tax liabilities with respect to the Residual Certificates in
excess of any cash flows generated by the Residual Underlying Certificates
and (iii) it has historically paid its debts as they became due and has the
Investment wherewithal and intends to continue to pay its debts as they
come due in the future, including any tax imposed on the income that it
derives from the Residual Certificates as such taxes become due.
(c) The Transferee is acquiring the Residual Certificates for
its own account as principal and not with a view to the resale or
distribution thereof, in whole or in part, in violation of Section 5 of the
Securities Act of 1933, as amended (the "Securities Act").
(d) The Transferee confirms that the Depositor has made
available to the Transferee the opportunity to ask questions of, and
receive answers from, the Depositor concerning the Depositor, the Trust,
the purchase by the Transferee of the Residual Certificates and all matters
relating thereto, and to obtain additional information relating thereto
that the Depositor possesses or can acquire unreasonable effort or expense.
Section 3. Covenants. The Transferee covenants:
(a) The Transferee will not make a public offering of the
Residual Certificates, and will not reoffer or resell the Residual
Certificates in a manner that would render the issuance and sale of the
Residual Certificates whether considered together with the resale or
otherwise, a violation of the Securities Act, or any state securities or
"Blue Sky" laws or require registration pursuant thereto.
(b) The Transferee agrees that, in its capacity as a holder of
the Residual Certificates, it will assert no claim or interest in the
assets by reason of owning the Residual Certificates other than with
respect to amounts that may be properly and actually payable to the
Transferee pursuant to the terms of the Agreement and the Underlying
Certificates.
(c) If applicable, the Transferee will comply with respect to
the Residual Certificates in all material respects with applicable
regulatory guidelines relating to the ownership of mortgage derivative
products.
(d) Upon notice thereof, the Transferee agrees to any future
amendment to the provisions of the Agreement relating to the transfer of
the Residual Certificates (or any interest therein) that counsel to the
Depositor or the Trust may deem necessary to ensure that any such transfer
will not result in the imposition of any tax on the Trust.
(e) The Transferee hereby designates the Trustee, as its agent,
to be and perform the functions of the REMIC's tax matters person ("TMP").
F-2
(f) The Transferee hereby agrees that the Trustee will (i)
supervise or engage in any action necessary or advisable to preserve the
status of the REMIC as a REMIC and (ii) employ on a reasonable basis
counsel, accountants, and professional assistance to aid in the preparation
of tax returns or the performance of the above.
(g) The Transferee hereby agrees to cooperate with the TMP and
to take any action required of it by the REMIC Provisions in order to
create or maintain the REMIC status of the REMIC.
(h) The Transferee hereby agrees that it will not take any
action that could endanger the REMIC status of the REMIC or result in the
imposition of tax on such REMIC unless counsel for, or acceptable to, the
TMP has provided an opinion that such action will not result in the loss of
such REMIC status or the imposition of such tax, as applicable.
(i) The Transferee hereby agrees that it will take no action to
question or invalidate the interest of the Trust in the related assets or
seek or maintain any claim or interest in the related assets having a
priority over the interest of the Trust in the related assets.
(j) The Transferee understands that Treasury regulations, or
other administrative guidance issued by the Treasury, may effectively
prohibit the transfer of the Residual Certificates to foreign persons.
(k) The Transferee hereby agrees that it shall pay any tax or
reporting costs borne by the REMIC as a result of its purchase of a
Residual Certificate or any beneficial interest therein in violation of the
restrictions on transfer contained in the Agreement to the extent such tax
or reporting costs are not paid by the transferor or by the Trustee out of
amounts that otherwise would have been paid to the Transferee.
(l) The Transferee hereby agrees to indemnify and hold harmless
the Depositor, the Trustee, the Trust and each other holder of a Residual
Certificate from and against any tax liabilities or reporting costs arising
from its violation of the restrictions on transfer contained in the
Agreement or its breach of any of its representations, warranties, or
covenants contained herein.
F-3
Section 4. Additional Transfer Restrictions.
(a) No transfer of the Residual Certificates shall be made
unless the Trustee has consented in writing to such transfer. No Residual
Underlying Certificate may be transferred to a Disqualified Organization.
The Trustee will not consent to any proposed transfer (i) to any investor
that it knows is a Disqualified Organization, or (ii) if the transfer
involves less than an entire interest in a Residual Certificate, unless (A)
the interest transferred is an undivided interest or (B) the transferor or
the transferee provides the Trustee with an Opinion of Counsel obtained at
its own expense to the effect that the transfer will not jeopardize the
REMIC status of the REMIC. The Trustee's consent to any transfer is further
conditioned upon the Trustee's receipt from the proposed transferee of (x)
a Residual Transferee Agreement, (y) a Benefit Plan Affidavit, and (z)
either (A) if the transferee is a non-United States Person, an affidavit of
the proposed transferee in substantially the form attached as Exhibit G-1
-----------
to Exhibit G to the Trust Agreement and a certificate of the transferor
---------
stating whether the Class R Underlying Certificate has "tax avoidance
potential" as defined in Treasury Regulations Section 1.860G-3(a)(2), or
(B) if the transferee is a U.S. Person, an affidavit in substantially the
form attached as Exhibit G-2 to Exhibit G to the Trust Agreement. In
----------- ---------
addition (1) the Trustee shall require that any transfer of the Residual
Certificates be made in accordance with Section 4.4 of the Trust Agreement.
Notwithstanding the fulfillment of the prerequisites described above, the
Trustee may withhold its consent to a transfer of a Residual Certificate,
but only to the extent necessary to avoid a risk of disqualification of the
REMIC as a REMIC or the imposition of a tax upon the REMIC. Any attempted
transfer in violation of the foregoing restrictions shall be null and void
and shall not be recognized by the Trustee.
(b) The Transferee acknowledges that, if a tax or a reporting
cost is borne by the REMIC as a result of the transfer of the Residual
Certificates or any beneficial interest therein in violation of the
restrictions referenced herein, the transferor shall pay such tax or cost
and, if such tax or cost is not so paid, the Trustee shall pay such tax or
reporting cost with amounts that otherwise would have been paid to the
transferee of such Residual Certificates. In that event, neither the
transferee nor the transferor shall have any right to seek repayment of
such amounts from the Depositor, the Trustee, the Trust, the REMIC or the
Holders of any other Underlying Certificates, and none of such parties
shall have any liability for payment of any such tax or reporting cost. In
the event that a Residual Certificate is transferred to a Disqualified
Organization, the Trustee shall make available, or cause to be made
available, the information necessary for the computation of the excise tax
imposed under section 860E(e) of the Code.
Section 5. Acknowledgments.
(a) The Transferee acknowledges that the Residual Certificates
have not been registered under the Securities Act or registered or
qualified under any state securities laws and that no transfer may be made
unless the Residual Certificates are registered under the Securities Act
and under applicable state law or unless an exemption from such
registration is available. The Transferee further understands that neither
the Depositor
F-4
nor the Trust is under any obligation to register the Residual Underlying
Certificates or make an exemption from such registration available.
(b) The Transferee acknowledges that if any United States federal
income tax is due at the time a non-United States Person transfers a
Residual Certificate, the Trustee or its designated Paying Agent or other
person who is liable to withhold federal income tax from a distribution on
a Residual Certificate under sections 1441 and 1442 of the Code and the
regulations thereunder (the "Withholding Agent") may (i) withhold an amount
equal to the taxes due upon disposition of the Residual Certificate from
future distributions made with respect to the Residual Certificate to the
transferee (after giving effect to the withholding of taxes imposed on such
transferee), and (ii) pay the withheld amount to the Internal Revenue
Service unless satisfactory written evidence of payment of the taxes due by
the transferor has been provided to the Withholding Agent. Moreover, the
Withholding Agent may (x) hold distributions on a Residual Certificate,
without interest, pending determination of amounts to be withheld, (y)
withhold other amounts required to be withheld pursuant to United States
federal income tax law, if any, from distributions that otherwise would be
made to such transferee on each Residual Certificate it holds, and (z) pay
to the Internal Revenue Service all such amounts withheld.
(c) The Transferee acknowledges that the transfer of all or part
of the Residual Certificates that have "tax avoidance potential" (as
defined in Treasury Regulations section 1.860G-3(a)(2) or any successor
provision) to a non-United States Person will be disregarded for all
federal income tax purposes.
(d) The Transferee acknowledges that the transfer of the
Residual Certificates to a U.S. Person will be disregarded for all federal
income tax purposes if a significant purpose of the transfer is to impede
the assessment or collection of the taxes and expenses associated with the
security within the meaning of Treasury regulation section 1.860E-1(c)(1).
F-5
IN WITNESS WHEREOF, the undersigned has caused this Residual
Transferee Agreement be validly executed by its duly authorized representative
as of the day and year first above written.
[Name of Transferee]
By:_____________________________________
Name:
Title:
F-6
EXHIBIT F-1
EQCC ASSET BACKED CORPORATION
FOREIGN PERSON AFFIDAVIT
AND AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(A) and 860E(e)(4)
OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Re: EQCC Asset Backed Corporation
EQCC Asset Backed Trust [2001-__] (the "Trust")
Asset Backed Certificates, Class R
STATE OF ___________________ )
) ss.:
COUNTY OF _________________ )
Under penalties of perjury, I, the undersigned, declare that to the best of
my knowledge and belief, the following representations are true, correct, and
complete:
1. I am a duly authorized officer of ___________________ (the
"Transferee"), and on behalf of which I have the authority to make this
affidavit.
2. The Transferee is acquiring all or a portion of the securities (the
"Residual Certificates"), which represent a residual interest in a real estate
mortgage investment conduit (a "REMIC") for which elections are to be made under
Section 860D of the Internal Revenue Code of 1986, as amended (the "Code").
3. The Transferee is a foreign person within the meaning of Treasury
Regulation Section 1.860G-3(a)(1) (i.e., a person other than (i) a citizen or
resident of the United States, (ii) a corporation created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia, including an entity treated as a corporation for federal income tax
purposes, (iii) a partnership (unless Treasury regulations are adopted that
provide otherwise) created or organized in or under the laws of the United
States, any state thereof or the District of Columbia, including an entity
treated as a partnership for federal income tax purposes, none of the interests
in which are owned, directly or indirectly through one or more intermediate
entities, by a non-United States Person, (iv) an estate the income of which is
subject to United States federal income tax regardless of its source, (v) a
trust if a court within the United States is able to exercise primary
supervision over the administration of such trust and one or more United States
fiduciaries have the authority to control all substantial decisions of the trust
(or to the extent provided in applicable Treasury regulations, certain trusts in
existence on August 20, 1996 that are eligible to be treated as United States
persons), or (vi) a foreign person who would be subject to United States federal
income taxation on a net basis on income derived from a Residual Certificate ("a
non-United States Person").
F-7
4. The Transferee agrees that it will not hold the Residual Certificates
in connection with a trade or business in the United States, and the Transferee
understands that it will be subject to United States federal income tax under
sections 871 and 881 of the Code in accordance with section 860G of the Code and
any Treasury regulations issued thereunder on "excess inclusions" that accrue
with respect to the Residual Certificates during the period the Transferee holds
the Residual Certificates.
5. The Transferee understands that the federal income tax on excess
inclusions with respect to the Residual Certificates may be withheld in
accordance with section 860G(b) of the Code from distributions that otherwise
would be made to the Transferee on the Residual Certificates and, to the extent
that such tax has not been imposed previously, that such tax may be imposed at
the time of disposition of any such Residual Certificate pursuant to section
860G(b) of the Code.
6. The Transferee agrees (i) to file a timely United States federal
income tax return for the year in which disposition of a Residual Certificate it
holds occurs (or earlier if required by law) and will pay any United States
federal income tax due at that time and (ii) if any tax is due at that time, to
provide satisfactory written evidence of payment to the Trustee or its
designated paying agent or other person who is liable to withhold federal income
tax from a distribution on the Residual Certificates under sections 1441 and
1442 of the Code and the regulations thereunder (the "Withholding Agent").
7. The Transferee understands that, until such written notice is
provided, the Withholding Agent may (i) withhold an amount equal to the taxes
due upon disposition of a Residual Certificates from future distributions made
with respect to the Residual Certificate to subsequent transferees (after giving
effect to the withholding of taxes imposed on such subsequent transferees), and
(ii) pay the withheld amount to the Internal Revenue Service.
8. The Transferee understands that (i) the Withholding Agent may withhold
other amounts required to be withheld pursuant to United States federal income
tax law, if any, from distributions that otherwise would be made to such
transferee on each Residual Certificates it holds and (ii) the Withholding Agent
may pay to the Internal Revenue Service amounts withheld on behalf of any and
all former holders of each Residual Certificate held by the Transferee.
9. The Transferee understands that if it transfers a Residual Certificate
(or any interest therein) to a U.S. Person, the Withholding Agent may disregard
the transfer for federal income tax purposes if the transfer would have the
effect of allowing the Transferee to avoid tax on accrued excess inclusions and
may continue to withhold tax from future distributions as though the Residual
Certificate were still held by the Transferee.
10. The Transferee understands that a transfer of a Residual Certificate
(or any interest therein) to a non-United States Person (i.e., a foreign person
who is not subject to net United States federal income tax with respect to such
Residual Certificate) will not be recognized unless the Withholding Agent has
received from the transferee an affidavit in substantially the same form as this
affidavit containing these same agreements and representations.
F-8
11. The Transferee understands that distributions on a Residual
Certificate may be delayed, without interest, pending determination of amounts
to be withheld.
12. The Transferee is not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of, or with a view to the transfer of direct
or indirect record or beneficial ownership to, a Disqualified Organization. For
the purposes hereof, a Disqualified Organization is any of the following: (i)
the United States, any State or political subdivision thereof, any foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing; (ii) any organization (other than a xxxxxx'x cooperative
as defined in Section 521 of the Code) that is exempt from federal income
taxation (including taxation under the unrelated business taxable income
provisions of the Code); (iii) any rural telephone or electrical service
cooperative described in Section 1381(a)(2)(C) of the Code; (iv) an "electing
large partnership" within the meaning of Code section 775; or (v) any other
entity so designated by Treasury rulings or regulations promulgated or otherwise
in effect as of the date hereof. In addition, a corporation will not be treated
as an instrumentality of the United States or of any state or political
subdivision thereof if all of its activities are subject to tax and, with the
exception of the Federal Home Loan Mortgage Corporation, a majority of its board
of directors is not selected by such governmental unit.
13. The Transferee agrees to consent to any amendment of the Trust
Agreement that shall be deemed necessary by the Depositor (upon the advice of
counsel to the Depositor) to constitute a reasonable arrangement to ensure that
no interest in a Residual Certificate will be owned directly or indirectly by a
Disqualified Organization.
14. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Trust Agreement, dated as of _________ 1, 20__,
between EQCC Asset Backed Corporation and [Trustee], as Trustee.
F-9
IN WITNESS WHEREOF, the Transferee has caused this instrument to be duly
executed on its behalf, by its duly authorized officer as of the _______ day of
_____________, ____.
______________________________
[Name of Transferee]
By:___________________________
Its:__________________________
Personally appeared before me ___________________________, known or proved
to me to be the same person who executed the foregoing instrument and to be a
______________________ of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this ______ day of __________, ____.
______________________________
Notary Public
My commission expires the _____ day of ________________, ____.
F-10
EXHIBIT F-2
EQCC ASSET BACKED CORPORATION
AFFIDAVIT PURSUANT TO SECTIONS
860D(a)(6)(A) and 860E(e)(4)
OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED
Re: EQCC Asset Backed Corporation
EQCC Asset Backed Certificates Series [2001-__] (the "Trust")
Asset Backed Certificates, Class R
STATE OF ___________________ )
) ss.:
COUNTY OF _________________ )
Under penalties of perjury, I, the undersigned declare that, to the best of
my knowledge and belief, the following representations are true, correct and
complete:
1. I am a duly authorized officer of ______________________ (the
"Transferee"), on behalf of which I have the authority to make this affidavit.
2. The Transferee is acquiring all or a portion of the securities (the
"Residual Certificates"), which represent a residual interest in a real estate
mortgage investment conduit (a "REMIC") for which elections are to be made under
Section 860D of the Internal Revenue Code of 1986, as amended (the "Code").
3. The Transferee either is (i) a citizen or resident of the United
States, (ii) a corporation created or organized in or under the laws of the
United States, any state thereof or the District of Columbia, including an
entity treated as a corporation for federal income tax purposes, (iii) a
partnership (unless Treasury regulations are adopted that provide otherwise)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia, including an entity treated as a
partnership for federal income tax purposes, none of the interests in which are
owned, directly or indirectly through one or more intermediate entities, by a
non-United States Person, (iv) an estate the income of which is subject to
United States federal income tax regardless of its source, (v) a trust if a
court within the United States is able to exercise primary supervision over the
administration of such trust and one or more United States fiduciaries have the
authority to control all substantial decisions of the trust (or to the extent
provided in applicable Treasury regulations, certain trusts in existence on
August 20, 1996 that are eligible to be treated as United States persons), or
(vi) a foreign person who would be subject to United States federal income
taxation on a net basis on income derived from a Residual Certificate (a "U.S.
Person").
4. The Transferee is a not a "Disqualified Organization" (as defined
below), and the Transferee is not acquiring a Residual Certificate for the
account of, or as agent or nominee of,
F-11
or with a view to the transfer of direct or indirect record or beneficial
ownership to, a Disqualified Organization. For the purposes hereof, a
Disqualified Organization is any of the following: (i) the United States, any
State or political subdivision thereof, any foreign government, any
international organization, or any agency or instrumentality of any of the
foregoing; (ii) any organization (other than a xxxxxx'x cooperative as defined
in Section 521 of the Code) that is exempt from federal income taxation
(including taxation under the unrelated business taxable income provisions of
the Code); (iii) any rural telephone or electrical service cooperative described
in (S) 1381(a)(2)(C) of the Code; or (iv) any other entity so designated by
Treasury rulings or regulations promulgated or otherwise in effect as of the
date hereof. In addition, a corporation will not be treated as an
instrumentality of the United States or of any state or political subdivision
thereof if all of its activities are subject to tax and, with the exception of
the Federal Home Loan Mortgage Corporation, a majority of its board of directors
is not selected by such governmental unit.
5. The Transferee agrees to consent to any amendment of the Trust
Agreement that shall be deemed necessary by the Issuer (upon advice of counsel
to the Issuer) to constitute a reasonable arrangement to ensure that no interest
in a Residual Certificate will be owned directly or indirectly by a Disqualified
Organization.
6. The Transferee acknowledges that Section 860E(e) of the Code would
impose a substantial tax on the transferor or, in certain circumstances, on an
agent for the transferee, with respect to any transfer of any interest in any
Residual Certificate to a Disqualified Organization.
Capitalized terms used and not otherwise defined herein shall have the
meanings assigned to them in the Trust Agreement, dated as of _________, 20__,
between EQCC Asset Backed Corporation and [Trustee], as Trustee.
F-12
IN WITNESS WHEREOF, the Transferee has caused this instrument to be duly
executed on its behalf by its duly authorized officer this ____ day of ______,
____.
_______________________________
[Name of Transferee]
By:____________________________
Its:___________________________
Personally appeared before me ___________________, known or proved to me to
be the same person who executed the foregoing instrument and to be a
_______________ of the Transferee, and acknowledged to me that he or she
executed the same as his or her free act and deed and as the free act and deed
of the Transferee.
Subscribed and sworn before me this ____ day of ________, ____.
_______________________________
Notary Public
My commission expires the _____ day of ________________, ____.
F-13
EXHIBIT G
FORM OF BENEFIT PLAN AFFIDAVIT
Re: EQCC Asset Backed Trust [2001-__] (the "Trust"),
Class [A] Certificates
STATE OF ___________________ )
) ss.:
COUNTY OF _________________ )
Under penalties of perjury, I, the undersigned, declare that, to the best
of my knowledge and belief, the following representations are true, correct, and
complete.
1. That I am a duly authorized officer of __________________________, a
_________ corporation (the "Purchaser"), whose taxpayer identification number is
__________, and on behalf of which I have the authority to make this affidavit.
2. That the Purchaser is acquiring the Class [__] Certificates (the
"Purchased Certificates"), each representing an interest in the Trust, for
certain assets of which one or more real estate mortgage investment conduit
("REMIC") elections are to be made under Section 860D of the Internal Revenue
Code of 1986, as amended (the "Code").
3. The Purchaser either:
(i) is not a plan ("Plan") described in or subject to the Department
of Labor regulations set forth in 29 C.F.R. (S) 2510.3-101 (the "Plan Asset
Regulations"), a person acting on behalf of a Plan, or a person using the
assets of a Plan;
(ii) has provided a "Benefit Plan Opinion," obtained at the
Purchaser's expense, satisfactory to the Depositor and the Trustee. A
Benefit Plan Opinion is an opinion of counsel to the effect that the
proposed transfer will not (a) cause the assets of the Trust to be regarded
as Plan Assets, (b) give rise to a fiduciary duty under the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), on the part
of the Depositor or the Trustee, or (c) be treated as, or result in, a
prohibited transaction under Section 406 or 407 of ERISA or Section 4975 of
the Code.
Capitalized terms used but not otherwise defined herein shall have the
meanings assigned to such terms in the Trust Agreement, dated as of ____________
1, 20__, between the Depositor and [Trustee], as Trustee.
G-1
