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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest Event
Reported) December 15, 1999
GREENPOINT MORTGAGE SECURITIES INC., (as sponsor under the Sale and
Servicing Agreement, dated as of December 1, 1999, providing for the
issuance of GreenPoint Home Equity Loan Trust 1999-2, Home Equity Loan
Asset-Backed Notes).
GreenPoint Mortgage Securities Inc.
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(Exact name of registrant as specified in its charter)
Delaware 333-79833 68-0397342
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(State or Other Jurisdiction of (Commission (I.R.S. Employer
Incorporation) File Number) Identification No.)
700 Larkspur Landing Circle 94939
Suite 240 ----------
Larkspur, California (Zip Code)
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(Address of Principal Executive Offices)
Registrant's telephone number, including area code (415) 925-5442
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Item 2. Acquisition or Disposition of Assets
Description of the Notes and the Mortgage Loans
GreenPoint Mortgage Securities Inc. (the "Registrant")
registered an issuance of up to $500,000,000 in principal amount of Asset-Backed
Securities on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, as amended (the "Act"), by the Registration Statement on
Form S-3 (File No. 333-79833) (the "Registration Statement"). Pursuant to the
Registration Statement, GreenPoint Home Equity Loan Trust 1999-2 (the "Trust")
issued approximately $245,645,000 in aggregate principal amount of Home Equity
Loan Asset-Backed Notes, Series 1999-2 (the "Notes"), on December 22, 1999 (the
"Closing Date"). This Current Report on Form 8-K is being filed to satisfy an
undertaking to file copies of certain agreements executed in connection with the
issuance of the Notes, the forms of which were filed as Exhibits to the
Registration Statement.
The Notes were issued pursuant to an Indenture (the
"Indenture") attached hereto as Exhibit 4.1, dated as of December 1, 1999,
between the Trust and Bank One, National Association in its capacity as
Indenture Trustee (the "Indenture Trustee"). The Notes consist of two classes of
senior notes, the Class A-1 Notes (the "Class A-1 Notes") and the Class A-2
Notes (the "Class A-2 Notes", and collectively with the Class A-1 Notes, the
"Notes"). Also issued, but not offered, by the Trust are Certificates (the
"Certificates") evidencing the ownership interest in the Trust. The Notes
evidence indebtedness of the Trust.
The primary assets of the Trust are two pools of mortgage
loans. The first pool consists of adjustable rate, revolving home equity lines
of credit mortgage loans and fixed-rate closed-end second lien mortgage loans,
all of which substantially conform to certain loan origination standards with
respect to loan balances as of the date of origination set forth by the Federal
National Mortgage Association. The second pool consists of adjustable rate,
revolving home equity lines of credit mortgage loans which may not so conform.
The Notes have an aggregate principal amount of $245,645,000
and a variable interest rate.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Not applicable
(b) Not applicable
(c) Exhibits:
1.1 Underwriting Agreement, dated as of December 15, 1999,
among the Registrant, as Sponsor (the "Sponsor"), GreenPoint Mortgage Funding,
Inc., and Greenwich Capital Markets Inc., as Underwriter (the "Underwriter").
4.1 Sale and Servicing Agreement, dated as of December 1,
1999, among the Sponsor, GreenPoint Mortgage Funding, Inc., as Servicer, the
Trust, as Issuer, and the Indenture Trustee.
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4.2 Trust Agreement, dated as of December 1, 1999, between the
Sponsor, and Wilmington Trust Company, as Owner Trustee, relating to the
formation of the Trust.
4.3 Indenture, dated as of December 1, 1999, between the Trust
and the Indenture Trustee.
4.4 Mortgage Loan Purchase Agreement date as of December 1,
1999, by and between GreenPoint Mortgage Funding, Inc., as Seller, and the
Sponsor, as Purchaser.
4.5 Certificate Guaranty Insurance Policy relating to the
Notes, dated as of December 22, 1999, and issued and delivered by Ambac
Assurance Corporation.
5.1 Opinion of Tobin & Tobin regarding legality, dated
December 22, 1999.
8.1 Opinion of Dewey Ballantine LLP regarding tax matters,
dated December 22, 1999.
10.1 Indemnification Agreement, dated as of December 15, 1999,
between the Underwriter and Ambac Assurance Corporation, as Insurer.
23.1 Consent of KPMG LLP regarding financial statements of
Ambac Assurance Corporation and their report.*
* Previously filed on Form 8-K with the Securities and
Exchange Commission on December 20, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
GREENPOINT MORTGAGE SECURITIES INC.
By: /s/ Kristen Decker
--------------------------------
Name: Kristen Decker
Title: Vice President
Dated: January 5, 2000
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EXHIBIT INDEX
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Exhibit No. Description
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1.1 Underwriting Agreement, dated as of December 15, 1999, among
the Registrant, as Sponsor (the "Sponsor"), GreenPoint
Mortgage Funding, Inc., and Greenwich Capital Markets Inc., as
Underwriter (the "Underwriter").
4.1 Sale and Servicing Agreement, dated as of December 1, 1999,
among the Sponsor, GreenPoint Mortgage Funding, Inc., as
Servicer, the Trust, as Issuer, and the Indenture Trustee.
4.2 Trust Agreement, dated as of December 1, 1999, between the
Sponsor, and Wilmington Trust Company, as Owner Trustee,
relating to the formation of the Trust.
4.3 Indenture, dated as of December 1, 1999, between the Trust and
the Indenture Trustee.
4.4 Mortgage Loan Purchase Agreement date as of December 1, 1999,
by and between GreenPoint Mortgage Funding, Inc., as Seller,
and the Sponsor, as Purchaser.
4.5 Certificate Guaranty Insurance Policy relating to the Notes,
dated as of December 22, 1999, and issued and delivered by
Ambac Assurance Corporation.
5.1 Opinion of Tobin & Tobin regarding legality, dated December
22, 1999.
8.1 Opinion of Dewey Ballantine LLP regarding tax matters, dated
December 22, 1999.
10.1 Indemnification Agreement, dated as of December 15, 1999,
between the Underwriter and Ambac Assurance Corporation, as
Insurer.
23.1 Consent of KPMG LLP regarding financial statements of Ambac
Assurance Corporation and their report.*
* Previously filed on Form 8-K with the Securities and
Exchange Commission on December 20, 1999.
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EXHIBIT 1.1
EXECUTION COPY
GREENPOINT MORTGAGE FUNDING, INC.
GREENPOINT MORTGAGE SECURITIES INC.
HOME EQUITY LOAN ASSET-BACKED NOTES
Series 1999-2
Class A-1 and Class A-2
UNDERWRITING AGREEMENT
New York, New York
December 15, 1999
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Dear Sirs:
GreenPoint Mortgage Securities Inc., a Delaware corporation
(the "Sponsor"), proposes to cause GreenPoint Home Equity Loan Trust 1999-2 (the
"Trust") to sell to you its Home Equity Loan Asset-Backed Notes in the series
and classes, in the respective original principal amounts and with the
designations set forth in Schedule I hereto (the "Designated Notes"). Only the
Designated Notes are being purchased by you hereunder. The Designated Notes,
will be issued pursuant to an Indenture (the "Indenture"), dated as of December
1, 1999, between the Trust and Bank One, National Association, as indenture
trustee (the "Indenture Trustee"). The Trust will be formed pursuant to a Trust
Agreement (the "Trust Agreement") to be dated as of December 1, 1999 and entered
into between the Sponsor and Wilmington Trust Company, as Owner Trustee. The
Designated Notes and a certificate issued to the Sponsor (the "Certificate")
will be secured by certain Mortgage Loans to be transferred by the Sponsor to
the Trust pursuant to a sale and servicing agreement (the "Sale and Servicing
Agreement") dated December 1, 1999 among the Sponsor, the Trust, GreenPoint
Mortgage Funding, Inc. (the "Company") and the Indenture Trustee and pledged by
the Trust to the Indenture Trustee under the Indenture. The Designated Notes are
described more fully in Schedule I hereto and in a Prospectus Supplement
furnished to you by the Company.
Capitalized terms used but not otherwise defined herein shall
have the respective meanings assigned to them in Annex I to the Indenture.
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1. Representations and Warranties of the Company and the Sponsor. Each
of the Company and the Sponsor represents and warrants to, and agrees with, you
that:
(a) A registration statement on Form S-3 has been filed with
the Securities and Exchange Commission (the "Commission") (the file
number of which is set forth in Schedule I hereto) for the registration
of Asset-Backed Securities, issuable in series under the Securities Act
of 1933, as amended (the "1933 Act"), which registration statement was
declared effective on the date set forth in Schedule I hereto and
copies of which have heretofore been delivered to you. The Sponsor
meets the requirements for use of Form S-3 under the 1933 Act, and such
registration statement, as amended at the date hereof, meets the
requirements set forth in Rule 415(a)(1)(x) under the 1933 Act and
complies in all other material respects with the 1933 Act and the rules
and regulations thereunder (the "Rules and Regulations"). The Sponsor
proposes to file with the Commission, with your consent, pursuant to
Rule 424 under the 1933 Act, a supplement to the form of prospectus
included in such registration statement relating to the Designated
Notes and the plan of distribution thereof, and has previously advised
you of all further information (financial and other) with respect to
the Designated Notes and the Mortgage Pool to be set forth therein.
Such registration statement, including all exhibits thereto, as amended
at the date hereof, is referred to herein as the "Registration
Statement"; such prospectus in the form in which it appears in the
Registration Statement is referred to herein as the "Base Prospectus"
(except that if the prospectus filed by the Sponsor pursuant to Rule
424(b) under the 1933 Act differs from the prospectus on file at the
time the Registration Statement became effective, the term "Base
Prospectus" shall refer to such Rule 424(b) prospectus from and after
the time it is mailed to the Commission for filing); such form of
prospectus supplemented by the prospectus supplement (the "Prospectus
Supplement") relating to the Designated Notes, in the form in which it
shall be first filed with the Commission pursuant to Rule 424(b) under
the 1933 Act (including the Base Prospectus as so supplemented), is
referred to herein as the "Final Prospectus".
(b) As of the date hereof, as of the date on which the Final
Prospectus is first filed pursuant to Rule 424 under the 1933 Act, as
of the date on which, prior to the Closing Date (as hereinafter
defined), any amendment to the Registration Statement becomes
effective, as of the date on which any supplement to the Final
Prospectus is filed with the Commission, and at the Closing Date, (i)
the Registration Statement, as amended as of any such time, and the
Final Prospectus, as amended or supplemented as of any such time,
complies and will comply as to form in all material respects with the
applicable requirements of the 1933 Act and the Rules and Regulations
thereunder, (ii) the Registration Statement, as amended as of any such
time, does not contain and will not contain any untrue statement of a
material fact and does not omit and will not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, and (iii) the Final Prospectus, as
amended or supplemented as of any such time, does not contain and will
not contain any untrue statement of a material fact and does not omit
and will not omit to state any
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material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that the
Sponsor makes no representations or warranties as to statements
contained in or omitted from the Registration Statement or the Final
Prospectus or any amendment or supplement thereto made in reliance upon
and in conformity with information furnished in writing to the Company
by you specifically for use in the Registration Statement and the Final
Prospectus.
(c) The documents incorporated by reference in the Final
Prospectus, when they became effective or were filed with the
Commission, as the case may be, conformed in all material respects to
the requirements of the 1933 Act or the Securities Exchange Act of 1934
(the "1934 Act"), as applicable, and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed and
incorporated by reference in the Final Prospectus, when such documents
become effective or are filed with the Commission, as the case may be,
will conform in all material respects to the requirements of the 1933
Act or the 1934 Act, as applicable, and the rules and regulations of
the Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
(d) Since the respective dates as of which information is
given in the Final Prospectus, there has not been any material adverse
change in the general affairs, management, financial condition, or
results of operations of the Company, otherwise than as set forth or
contemplated in the Final Prospectus as supplemented or amended as of
Closing Date.
(e) To the extent that the Underwriter (i) has provided to the
Company or the Sponsor Collateral Term Sheets (as hereinafter defined)
that such Underwriter has provided to a prospective investor, the
Company or the Sponsor has filed such Collateral Term Sheets as an
exhibit to a report on Form 8-K within two business days of its receipt
thereof, or (ii) has provided to the Company or the Sponsor Structural
Term Sheets or Computational Materials (each as defined below) that
such Underwriter has provided to a prospective investor, the Company or
the Sponsor will file or cause to be filed with the Commission a report
on Form 8-K containing such Structural Term Sheet and Computational
Materials, as soon as reasonably practicable after the date of this
Agreement, but in any event, not later than the date on which the Final
Prospectus is filed with the Commission pursuant to Rule 424 of the
Rules and Regulations.
(f) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of California, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its
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business requires such qualification, has full power and authority
(corporate and other) necessary to own or hold its properties and to
conduct its business as now conducted by it and to enter into and
perform its obligations under this Agreement, the Sale and Servicing
Agreement, the Mortgage Loan Purchase Agreement, dated as of December
1, 1999 between the Company and the Sponsor (the "Purchase Agreement")
and the Insurance and Indemnity Agreement dated as of December 22, 1999
(the "Insurance and Indemnity Agreement") between the Company, Ambac
Assurance Corporation, the Sponsor, the Indenture Trustee and the
Trust.
(g) The Sponsor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, has full power and authority (corporate or other)
necessary to own and hold its properties and to conduct its business as
now conducted by it and to enter into and perform its obligations under
this Agreement, the Trust Agreement, the Sale and Servicing Agreement,
the Purchase Agreement and the Insurance and Indemnity Agreement.
(h) As of the date hereof, as of the date on which the Final
Prospectus is first filed pursuant to Rule 424 under the 1933 Act, as
of the date on which, prior to the Closing Date, any amendment to the
Registration Statement becomes effective, as of the date on which any
supplement to the Final Prospectus is filed with the Commission, and as
of the Closing Date, there has not and will not have been (i) any
request by the Commission for any further amendment to the Registration
Statement or the Final Prospectus or for any additional information,
(ii) any issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the institution or
threat of any proceeding for that purpose or (iii) any notification
with respect to the suspension of the qualification of the Designated
Notes for sale in any jurisdiction or any initiation or threat of any
proceeding for such purpose.
(i) PricewaterhouseCoopers LLP are independent public
accountants with respect to the Company as required by the 1933 Act and
the Rules and Regulations.
(j) This Agreement has been duly authorized, executed and
delivered by the Company and the Sponsor and constitutes a legal,
valid, binding and enforceable agreement of each of the Company and the
Sponsor, subject as to enforceability, to (i) bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and (ii) general principles of equity regardless of
whether enforcement is sought in a proceeding in equity or at law.
(k) The Sale and Servicing Agreement, the Insurance and
Indemnity Agreement and the Purchase Agreement when executed and
delivered as
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contemplated hereby and thereby, will have been duly authorized,
executed and delivered by each of the Company and the Sponsor, and when
so executed and delivered, will constitute legal, valid, binding and
enforceable agreements of each of the Company and the Sponsor, subject,
as to enforceability, to (i) bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting creditors' rights generally
and (ii) general principles of equity regardless of whether enforcement
is sought in a proceeding in equity or at law.
(l) The Trust Agreement when executed and delivered as
contemplated hereby and thereby will have been duly authorized,
executed and delivered by the Sponsor, and when so executed and
delivered, will constitute a legal, valid, binding and enforceable
agreement of the Sponsor, subject, as to enforceability, to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and (ii) general principles
of equity regardless of whether enforcement is sought in a proceeding
in equity or at law.
(m) As of the Closing Date, the Designated Notes and the
Indenture will conform in all material respects to the respective
descriptions thereof contained in the Final Prospectus. As of the
Closing Date, the Designated Notes will be duly and validly authorized
and, when duly and validly executed, authenticated and delivered in
accordance with the Indenture and delivered to you against payment
therefor as provided herein, will be duly and validly issued and
outstanding and entitled to the benefits of the Indenture. The
Designated Notes will not be "mortgage related securities," as such
term is defined in the singular in the 1934 Act.
(n) The Indenture, when executed and delivered, will have been
duly qualified under the Trust Indenture Act of 1939.
(o) As of the Closing Date, each of the Mortgage Loans will
meet the criteria for selection described in the Final Prospectus, and
on the Closing Date the representations and warranties of the Company
and the Sponsor with respect to the Mortgage Loans contained in the
Purchase Agreement and the Sale and Servicing Agreement will be true
and correct.
(p) Each of the Company and the Sponsor is not in violation of
its certificate of incorporation or by-laws or in default under any
agreement, indenture or instrument the effect of which violation or
default would be material to the Company or the Sponsor. Neither the
issuance and sale of the Designated Notes, nor the execution and
delivery by the Company and the Sponsor of this Agreement, the Sale and
Servicing Agreement, the Purchase Agreement or the Insurance and
Indemnity Agreement, nor the consummation by the Company and the
Sponsor of any of the transactions herein or therein contemplated, nor
compliance by the Company and the Sponsor with the provisions hereof or
thereof, does or will conflict with or result in a breach of any term
or provision of the certificate of incorporation or by-laws of the
Company or the Sponsor or
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conflict with, result in a breach, violation or acceleration of, or
constitute a default under, the terms of any indenture or other
agreement or instrument to which the Company or the Sponsor is a party
or by which it is bound, or any statute, order or regulation applicable
to the Company or the Sponsor of any court, regulatory body,
administrative agency or governmental body having jurisdiction over the
Company or the Sponsor. Each of the Company and the Sponsor is not a
party to, bound by or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any statute,
order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it that materially
and adversely affects, or may in the future materially and adversely
affect, (i) the ability of the Company or the Sponsor to perform its
obligations under this Agreement, the Purchase Agreement, the Sale and
Servicing Agreement or the Insurance and Indemnity Agreement or (ii)
the business, operations, financial conditions, properties or assets of
the Company.
(q) The execution and delivery by the Sponsor of the Trust
Agreement does not and will not conflict with or result in a breach of
any term or provision of the certificate of incorporation or bylaws of
the Sponsor or conflict with, result in a breach, violation or
acceleration of, or constitute a default under, the terms of any
indenture or other agreement or instrument to which the Sponsor is
bound or is a party or any statute, order or regulation applicable to
the Sponsor.
(r) There are no actions or proceedings against, or
investigations of, the Company or the Sponsor pending, or, to the
knowledge of the Company or the Sponsor, threatened, before any court,
arbitrator, administrative agency or other tribunal (i) asserting the
invalidity of this Agreement, the Trust Agreement, the Sale and
Servicing Agreement, the Purchase Agreement, the Insurance and
Indemnity Agreement, the Trust Agreement or the Designated Notes, (ii)
seeking to prevent the issuance of the Designated Notes or the
consummation of any of the transactions contemplated by this Agreement,
the Trust Agreement, the Purchase Agreement, the Sale and Servicing
Agreement or the Insurance and Indemnity Agreement, (iii) that are
reasonably likely to be adversely determined and that might materially
and adversely affect the performance by each of the Company and the
Sponsor of its obligations under, or the validity or enforceability of,
this Agreement, the Sale and Servicing Agreement, the Insurance and
Indemnity Agreement, the Trust Agreement or the Designated Notes or
(iv) seeking to affect adversely the federal income tax attributes of
the Designated Notes as described in the Final Prospectus.
(s) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body of
the United States is required for the issuance of the Designated Notes
and the sale of the Designated Notes to you, or the consummation by the
Company or the Sponsor of the other transactions contemplated by this
Agreement, the Sale and Servicing Agreement, the Purchase Agreement,
the Trust Agreement and the Insurance and Indemnity Agreement, except
such consents, approvals, authorizations, registrations or
qualifications as may be required under State securities or Blue
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Sky laws in connection with the purchase and distribution of the
Designated Notes by you or as have been obtained.
(t) Each of the Company and the Sponsor possesses all material
licenses, certificates, authorities or permits issued by the
appropriate State, Federal or foreign regulatory agencies or bodies
necessary to conduct the business now conducted by it and as described
in the Final Prospectus, and neither the Company nor the Sponsor has
received notice of any proceedings relating to the revocation or
modification of any such license, certificates, authority or permit
which if decided adversely to the Company or the Sponsor would, singly
or in the aggregate, materially and adversely affect the conduct of its
business, operations or financial condition.
(u) Any taxes, fees and other governmental charges in
connection with the execution and delivery of this Agreement, the
Purchase Agreement, the Trust Agreement, the Sale and Servicing
Agreement and the Insurance and Indemnity Agreement or the execution,
delivery and sale of the Designated Notes have been or will be paid on
or prior to the Closing Date.
(v) Immediately prior to the assignment of the Mortgage Loans
to the Trust as contemplated by the Sale and Servicing Agreement, the
Company (i) had good title to, and was the sole owner of, each Mortgage
Loan free and clear of any pledge, mortgage, lien, security interest or
other encumbrance (collectively, "Liens"), (ii) had not assigned to any
person any of its right, title or interest in such Mortgage Loans and
(iii) will have the power and authority to sell such Mortgage Loans to
the Sponsor pursuant to the Purchase Agreement and upon the execution
and delivery of the Sale and Servicing Agreement by the Sponsor, the
Trust will have acquired all of the Sponsor's and the Company's right,
title and interest in and to the Mortgage Loans.
(w) At the time of execution and delivery of the Indenture,
(1) the Trust will own the Mortgage Loans being pledged to the
Indenture Trustee pursuant thereto, free and clear of any Liens, except
to the extent permitted in the Indenture, and will not have assigned to
any person other than the Indenture Trustee any of its right, title or
interest in the Mortgage Loans, (2) the Trust will have the power and
authority to pledge the Trust Estate to the Indenture Trustee and to
transfer the Notes to you and will have duly authorized such action by
all necessary corporate action, (3) upon execution and delivery by the
Trust to the Indenture Trustee of the Indenture, and delivery of the
Notes to the Trust, the Indenture Trustee will have a valid, perfected
security interest of first priority in the Trust Estate free of Liens
other than Liens permitted by the Indenture and (4) upon payment and
delivery of the Designated Notes to you, you will acquire ownership of
the Designated Notes, free of Liens other than Liens permitted by the
Indenture or created or granted by you.
(x) At the Closing Date, the execution and delivery of the
Indenture by the Trust will have been duly authorized by the Sponsor
and upon due execution
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and delivery thereof by the parties thereto, the Indenture will
constitute a legal, valid and binding agreement enforceable in
accordance with its terms, except as the same may be limited by
bankruptcy, reorganization, insolvency or other similar laws affecting
creditors' rights generally and by general principles of equity.
(y) At the Closing Date, the Trust will have assigned, pledged
and delivered to the Indenture Trustee under the Indenture all of its
right, title and interest in and to, among other things, (i) the
Mortgage Loans, and (ii) cash and/or other assets, if any, in the
amount set forth in the Indenture (the "Initial Collateral").
(z) The Trust has corporate power and authority to assign,
pledge and deliver the Initial Collateral to the Indenture Trustee
under the Indenture, and at the Closing Date will have duly authorized
such assignment, pledge and delivery to the Indenture Trustee by all
necessary corporate actions.
(aa) Neither the Company, the Sponsor nor the Trust is, and
neither the issuance and sale of the Designated Notes nor the
activities of the Trust pursuant to the Indenture will cause the
Company, the Sponsor or the Trust to be, an "investment company" or
under the control of an "investment company" as such terms are defined
in the Investment Company Act of 1940, as amended (the "Investment
Company Act").
(bb) At the Closing Date, each of the representations and
warranties of the Company and the Sponsor set forth in the Purchase
Agreement and in the Sale and Servicing Agreement will be true and
correct in all material respects.
(cc) At the Closing Date, the Designated Notes shall have been
rated in the highest rating category by at least two nationally
recognized rating agencies.
2. Purchase and Sale. The commitment of the Underwriter to purchase the
Designated Notes pursuant to this Agreement shall be deemed to have been made on
the basis of the representations and warranties herein contained and shall be
subject to the terms and conditions herein contained and shall be subject to the
terms and conditions herein set forth. The Sponsor agrees to cause the Trust to
sell the Designated Notes to you, and you agree to purchase the Designated Notes
from the Trust, for the purchase price previously agreed between us, before
deducting expenses payable by the Company estimated at $500,000.
3. Delivery and Payment. Delivery of and payment for the Designated
Notes shall be made at the office of Dewey Ballantine LLP prior to 12:00 p.m.,
Eastern Standard Time, on the date specified in Schedule I hereto (or such later
date not later than seven business days after such specified date as you shall
designate), which date and time may be changed by agreement between you and the
Sponsor or as provided herein (such date and time of delivery and payment for
the Designated Notes being herein called the "Closing Date"). Delivery of the
Designated Notes shall be made to you against payment
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by you of the purchase price therefor in immediately available funds wired to
such bank as may be designated by the Sponsor, or such other manner of payment
as may be agreed upon by the Sponsor and you. The Designated Notes to be so
delivered shall be in definitive fully registered form, unless otherwise agreed,
in such denominations and registered in such names as you may have requested in
writing not less than two full business days in advance of the Closing Date.
The Sponsor agrees to have the Designated Notes available for
inspection, checking and packaging by you at the offices of Dewey Ballantine
LLP, not later than 4:00 p.m. on the business day prior to the Closing Date.
4. Offering of the Designated Notes. It is understood that you propose
to offer the Designated Notes for sale to the public as set forth in the Final
Prospectus.
5. Covenants of the Company and the Sponsor. Each of the Company and
the Sponsor covenants and agrees with you that:
(a) The Company and the Sponsor will prepare a supplement to
the Base Prospectus setting forth the amount of Designated Notes
covered thereby and the terms thereof not otherwise specified in the
Base Prospectus, the expected proceeds to the Company from the sale of
such Designated Notes, and such other information as you and the
Company may deem appropriate in connection with the offering of such
Designated Notes. The Company and the Sponsor will file promptly all
reports and any definitive proxy or information statements required to
be filed by the Company with the Commission pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act subsequent to the date of the Final
Prospectus. The Company and the Sponsor promptly will advise you or
your counsel (i) when the Final Prospectus shall have been filed or
transmitted to the Commission for filing pursuant to Rule 424, (ii)
when any amendment to the Registration Statement shall have become
effective or any further supplement to the Base Prospectus shall have
been filed with the Commission, (iii) of any proposal or request to
amend or supplement the Registration Statement, the Base Prospectus or
the Final Prospectus or any request by the Commission for any
additional information, (iv) when notice is received from the
Commission that any post-effective amendment to the Registration
Statement has become or will become effective, (v) of the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or post-effective amendment thereto or the
institution or threatening of any proceeding for that purpose, (vi) of
the receipt by the Company or the Sponsor of any notification with
respect to the suspension of the qualification of the Designated Notes
for sale in any jurisdiction or the institution or threatening of any
proceeding for that purpose, and (vii) of the occurrence of any event
that would cause the Registration Statement, as then in effect, to
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to
make the statements therein not misleading, or that would cause the
Final Prospectus, as then in effect, to contain an untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein,
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in light of the circumstances under which they were made, not
misleading. The Company and the Sponsor will use its best efforts to
prevent the issuance of any such stop order or suspension and, if
issued, to obtain as soon as possible the withdrawal thereof. The
Company and the Sponsor will cause the Final Prospectus to be
transmitted to the Commission for filing pursuant to Rule 424 under the
1933 Act or will cause the Final Prospectus to be filed with the
Commission pursuant to said Rule 424.
(b) If, at any time when a prospectus relating to the
Designated Notes is required to be delivered under the 1933 Act, any
event occurs as a result of which the Final Prospectus, as then amended
or supplemented, would contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or if it shall be necessary
to amend or supplement the Final Prospectus to comply with the 1933 Act
or the rules and regulations thereunder, the Company and the Sponsor
promptly will prepare and file with the Commission, at the expense of
the Company or the Sponsor, as the case may be, subject to paragraph
(a) of this Section 5, an amendment or supplement that will correct
such statement or omission or an amendment that will effect such
compliance and, if such amendment or supplement is required to be
contained in a post-effective amendment to the Registration Statement,
the Company and the Sponsor will use their best efforts to cause such
amendment to the Registration Statement to be made effective as soon as
possible.
(c) The Company and the Sponsor will furnish to you and your
counsel, without charge, signed copies of the Registration Statement
(including exhibits thereto) and each amendment thereto which shall
become effective on or prior to the Closing Date, and so long as
delivery of a prospectus by you may be required by the 1933 Act, as
many copies of any Final Prospectus and any amendments and supplements
thereto as you may reasonably request.
(d) The Company and the Sponsor will file promptly with the
Commission any amendment to the Registration Statement or the Base
Prospectus or any supplement to the Base Prospectus that may, in your
judgment or the judgment of the Company or the Sponsor, be required by
the 1933 Act or requested by the Commission.
(e) The Company and the Sponsor will make generally available
to holders of the Designated Notes as soon as practicable, but in any
event not later than 90 days after the close of the period covered
thereby, a statement of earnings of the Trust (which need not be
audited) complying with Section 11(a) of the 1933 Act and the Rules and
Regulations (including, at the option of the Company and the Sponsor,
Rule 158) and covering a period of at least twelve consecutive months
beginning not later than the first day of the first fiscal quarter
following the Closing Date.
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(f) Each of the Company and the Sponsor agrees that, so long
as the Designated Notes shall be outstanding, it will deliver to you
the annual statement as to compliance delivered to the Indenture
Trustee pursuant to Section 3.09 of the Sale and Servicing Agreement
and the annual statement of a firm of independent public accountants
delivered to the Indenture Trustee pursuant to Section 3.10 of the Sale
and Servicing Agreement, as soon as such statements are furnished to
the Company or the Sponsor.
(g) The Company and the Sponsor will furnish such information,
execute such instruments and use their best efforts to qualify the
Designated Notes for sale under the laws of such jurisdictions as you
may designate and will maintain such qualifications in effect so long
as required for the distribution of the Designated Notes; provided,
however, that the Company and the Sponsor shall not be required to
qualify to do business in any jurisdiction where it is not now
qualified or to take any action that would subject it to general or
unlimited service of process in any jurisdiction where it is not now
subject to such service of process. Subject to the foregoing proviso,
the Company and the Sponsor will file or cause the filing of such
statements and reports as may be required by the laws of each
jurisdiction in which the Designated Notes have been so qualified.
(h) The Company and the Sponsor will enter into this
Agreement, the Sale and Servicing Agreement, the Purchase Agreement and
the Insurance and Indemnity Agreement on or prior to the Closing Date.
(i) The Sponsor will enter into the Trust Agreement on or
prior to the Closing Date.
(j) The Company and the Sponsor will apply the net proceeds
from the sale of the Designated Notes in the manner set forth in the
Final Prospectus.
6. Conditions to the Obligations of the Underwriter. Your obligation
hereunder to purchase the Designated Notes shall be subject to the accuracy of
the representations and warranties on the part of the Company and the Sponsor
contained herein as of the date hereof, as of the date of the effectiveness of
any amendment to the Registration Statement filed prior to the Closing Date and
as of the Closing Date, to the accuracy of the statements of the Company and the
Sponsor made in any certificates delivered pursuant to the provisions hereof, to
the performance by the Company and the Sponsor of its obligations hereunder and
to the following additional conditions:
(a) The Registration Statement shall have become effective and
no stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and not
withdrawn and no proceedings for that purpose shall have been
instituted or threatened; and the Final Prospectus shall have been
filed or transmitted for filing with the Commission in accordance with
Rule 424 under the 1933 Act. Any request of the Commission for
inclusion of additional information in the Registration Statement or
the Base Prospectus shall have been complied with.
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(b) You shall have received from Dewey Ballantine LLP, your
counsel, a favorable opinion, dated the Closing Date, to the effect
that:
(i) No facts have come to the attention of such
counsel which lead them to believe that the Registration
Statement and the Final Prospectus (other than the financial
statements and other financial and statistical data contained
therein, as to which we are not called upon to express any
belief), at the time the Registration Statement became
effective, contained any untrue statement of a material fact
or omitted to state a material fact necessary in order to make
the statements therein not misleading, or that the Final
Prospectus (other than the financial statements and other
financial and statistical data contained therein, as to which
we are not called upon to express any belief), as of its date
and as of the date hereof, contained or contains any untrue
statement of a material fact, or omitted or omits to state any
material fact necessary in order to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
Such counsel shall also state that nothing has come to its
attention that would lead it to believe that the Registration Statement (other
than the financial and statistical information contained therein, as to which
such counsel need not express an opinion), at the time it became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or that the Final Prospectus (other than (i) the financial and
statistical information contained therein or (ii) the information contained in
the Prospectus Supplement under the heading "Description of the Mortgage Loans",
as of its date, and on the date hereof, contained or contains an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Such counsel may: (1) express its reliance as to factual
matters on the representations and warranties made by, and on certificates or
other documents furnished by officers of, the parties to this Agreement, the
Trust Agreement, the Indenture, the Sale and Servicing Agreement, the Purchase
Agreement and the Insurance and Indemnity Agreement; (2) assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company; (3) qualify such
opinion only as to the federal laws of the United States of America, the laws of
the State of New York and the general corporation law of the State of Delaware.
Such counsel shall also confirm that you may rely, on and as of the Closing
Date, on any opinion or opinions of such counsel submitted to the rating agency
or agencies rating the Designated Notes as if addressed to you and dated the
Closing Date.
(c) You shall have received a certificate, signed by the
president, a senior vice president or a vice president of the Company
and the Sponsor, dated the Closing Date, to the effect that the signer
of such certificate has carefully examined the Registration Statement,
the Purchase Agreement, the Trust Agreement, the Indenture, the Sale
and Servicing Agreement, the Insurance and
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Indemnity Agreement, and this Agreement and that, to the best of his or
her knowledge based upon reasonable investigation:
a. the representations and warranties of the Company
and the Sponsor in this Agreement, as of the Closing Date, and
in the Sale and Servicing Agreement, the Trust Agreement, the
Purchase Agreement, and the Insurance and Indemnity Agreement
and in all related agreements, as of the date specified in
such agreements, are true and correct, and the Company and the
Sponsor has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
b. there are no actions, suits or proceedings
pending, or to the best of such officer's knowledge,
threatened against or affecting the Company or the Sponsor
which if adversely determined, individually or in the
aggregate, would be reasonably likely to adversely affect the
Company's or the Sponsor's obligations under the Sale and
Servicing Agreement, the Insurance and Indemnity Agreement,
the Purchase Agreement or this Agreement in any material way
or the Sponsor's obligations under the Trust Agreement in any
material way; and no merger, liquidation, dissolution or
bankruptcy of the Company or the Sponsor is pending or
contemplated;
c. the information contained in the Registration
Statement and the Final Prospectus relating to the Company and
the Sponsor, the Mortgage Loans or the servicing procedures of
it or its affiliates or subservicer is true and accurate in
all material respects and nothing has come to his or her
attention that would lead such officer to believe that the
Registration Statement or Final Prospectus includes any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements therein not misleading;
d. the information set forth in the Schedule of
Mortgage Loans required to be furnished pursuant to the
Purchase Agreement and the Sale and Servicing Agreement is
true and correct in all material respects;
e. there has been no amendment or other document
filed affecting the articles of incorporation or bylaws of the
Company or the Sponsor since September 30, 1999, and no such
amendment has been authorized. No event has occurred since
September 30, 1999, which has affected the good standing of
the Company under the laws of the State of California or the
good standing of the Sponsor under the laws of the State of
Delaware;
f. there has not occurred any material adverse
change, or any development involving a prospective material
adverse change, in the
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<PAGE>
condition, financial or otherwise, or in the earnings,
business or operations of the Company, the Sponsor and its
subsidiaries, taken as a whole, from September 30, 1999.
g. on or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended
or potential downgrading or (B) any review or possible changes
in rating the direction of which has not been indicated, in
the rating, if any, accorded the Company or its affiliates or
in any rating accorded any securities of the Company, if any,
by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the
1933 Act;
h. each person who, as an officer or representative
of the Company or the Sponsor, signed or signs the
Registration Statement, the Sale and Servicing Agreement, the
Trust Agreement, the Insurance and Indemnity Agreement, this
Agreement, the Purchase Agreement or any other document
delivered pursuant hereto, on the date of such execution, or
on the Closing Date, as the case may be, in connection with
the transactions described in the Sale and Servicing
Agreement, the Trust Agreement, the Insurance and Indemnity
Agreement, the Purchase Agreement and this Agreement was, at
the respective times of such signing and delivery, and is now,
duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures; and
i. No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's or the
Sponsor's knowledge, threatened.
The Company and the Sponsor shall attach to such certificate a
true and correct copy of its certificate or articles of incorporation, as
appropriate, and bylaws which are in full force and effect on the date of such
certificate and a certified true copy of the resolutions of its Board of
Directors with respect to the transactions contemplated herein.
(d) You shall have received from Tobin & Tobin, counsel to the
Company, an opinion, dated the Closing Date, to the effect that:
(i) Each of the Company and the Sponsor has been duly
organized and is validly existing as a corporation in good
standing under the laws of its state of incorporation and is
qualified to do business in each state necessary to enable it
to perform its obligations under the Sale and Servicing
Agreement, this Agreement, the Purchase Agreement, the Trust
Agreement and the Insurance and Indemnity Agreement and has
all corporate power and authority necessary to own or hold its
properties and to conduct its business as now conducted by it
and to enter into and
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<PAGE>
perform its obligations under this Agreement, the Trust
Agreement, the Sale and Servicing Agreement, the Purchase
Agreement and the Insurance and Indemnity Agreement;
(ii) To the best knowledge of such counsel, there are
no actions, proceedings or investigations pending or
threatened against or affecting the Company or the Sponsor
before or by any court, arbitrator, administrative agency or
other governmental authority reasonably likely to be adversely
determined that would materially and adversely affect the
ability of the Company or the Sponsor to carry out the
transactions contemplated in this Agreement, the Trust
Agreement, the Sale and Servicing Agreement, the Purchase
Agreement or the Insurance and Indemnity Agreement;
(iii) No consent, approval, authorization or order
of, or filing or registration with, any state or federal court
or governmental agency or body is required for the
consummation by the Company or the Sponsor of the transactions
contemplated herein, except such as may be required under the
blue sky laws of any jurisdiction in connection with the
purchase and distribution of the Designated Notes and except
any recordation of the assignments of the Mortgage Loans to
the Indenture Trustee pursuant to the Sale and Servicing
Agreement that have not yet been completed;
(iv) Each of the Company and the Sponsor is not in
violation of its certificate of incorporation or by-laws or in
default under any agreement, indenture or instrument the
effect of which violation or default would be material to the
Company or the Sponsor, and neither the issuance and sale of
the Designated Notes, nor the execution or delivery of or
performance under this Agreement, the Trust Agreement, the
Sale and Servicing Agreement, the Purchase Agreement or the
Insurance and Indemnity Agreement, nor the consummation of any
other of the transactions contemplated herein or therein will
conflict with or result in a breach or violation of any term
or provision of, or constitute a default (or an event which
with the passing of time or notification, or both, would
constitute a default) under, the certificate of incorporation
or by-laws of the Company or the Sponsor, or, to the knowledge
of such counsel, any indenture or other agreement or
instrument to which the Company or the Sponsor or any of its
affiliates is a party or by which it or any of them is bound,
or any New York or federal statute or regulation applicable to
the Company or the Sponsor or any of its affiliates or, to the
knowledge of such counsel, any order of any New York or
federal court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company or the
Sponsor or any of its affiliates;
(v) The Sale and Servicing Agreement, this Agreement,
the Purchase Agreement and the Insurance and Indemnity
Agreement have been duly authorized, executed and delivered by
the Company and the
15
<PAGE>
Sponsor and constitute legal, valid and binding agreements of
the Company and the Sponsor, enforceable against the Company
and the Sponsor in accordance with its terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and to general principles of equity, regardless of
whether enforcement is sought in a proceeding in equity or at
law;
(vi) The Trust Agreement has been duly authorized,
executed and delivered by the Sponsor and constitutes a legal,
valid and binding agreement of the Sponsor enforceable against
the Sponsor in accordance with its terms, subject as to
enforceability, to bankruptcy, insolvency, reorganization,
moratorium and other similar laws affecting creditors' rights
generally and to general principles or equity, regardless of
whether enforcement is sought in a proceeding in equity or at
law;
(vii) The direction by the Sponsor to the Indenture
Trustee to execute, authenticate and deliver the Designated
Notes has been duly authorized by the Sponsor, and the
Designated Notes, when executed and authenticated in the
manner contemplated in the Indenture, will be validly issued
and outstanding and entitled to the benefits of the Indenture;
(viii) The Designated Notes and the Indenture conform
in all material respects to the descriptions thereof contained
in the Final Prospectus; and
(ix) Neither the transfer of the Mortgage Loans to
the Trust, the pledge of the Mortgage Loans, the issuance or
sale of the Designated Notes nor the execution, delivery or
performance by the Company and the Sponsor of this Agreement,
the Trust Agreement, the Insurance and Indemnity Agreement,
the Sale and Servicing Agreement or the Purchase Agreement (A)
conflicts or will conflict with or results or will result in a
breach of, or constitutes or will constitute a default under,
(i) any term or provision of the certificate of incorporation
or bylaws of the Company or the Sponsor; (ii) any term or
provision of any material agreement, contract, instrument or
indenture, to which the Company or the Sponsor is a party or
is bound and known to such counsel; or (iii) any order,
judgment, writ, injunction or decree of any court or
governmental agency or body or other tribunal having
jurisdiction over the Company or the Sponsor and known to such
counsel; or (B) results in, or will result in the creation or
imposition of any lien, charge or encumbrance upon the Trust
or upon the Designated Notes, except as otherwise contemplated
by the Indenture.
(x) The Registration Statement has become effective
under the 1933 Act; to the best knowledge of such counsel, no
stop order suspending the effectiveness of the Registration
Statement has been issued and not
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withdrawn and no proceedings for that purpose have been
instituted or threatened and not terminated; and the
Registration Statement, the Final Prospectus and each
amendment or supplement thereto and the Indenture, as of their
respective effective or issue dates (other than the financial
and statistical information contained therein as to which we
express no opinion) complied as to form in all material
respects with the applicable requirements of the 1933 Act and
the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the respective rules and regulations
thereunder; and
(xi) The Indenture has been duly qualified under the
Trust Indenture Act and the Trust Agreement is not required to
be registered under the Trust Indenture Act.
Such counsel may: (1) express its reliance as to factual
matters on the representations and warranties made by, and on certificates or
other documents furnished by officers of, the parties to this Agreement, the
Trust Agreement, the Indenture, the Sale and Servicing Agreement, the Purchase
Agreement and the Insurance and Indemnity Agreement; (2) assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company; (3) qualify such
opinion only as to the federal laws of the United States of America, the laws of
the State of New York and the general corporation law of the State of Delaware.
Such counsel shall also confirm that you may rely, on and as of the Closing
Date, on any opinion or opinions of such counsel submitted to the rating agency
or agencies rating the Designated Notes as if addressed to you and dated the
Closing Date.
(e) You shall have received from PricewaterhouseCoopers LLP,
certified public accountants, one or more letters, including bring-down
letters, dated the date hereof and satisfactory in form and substance
to you and your counsel, to the effect that such accountants have
performed certain specified procedures regarding certain information of
an accounting, financial or statistical nature set forth in the
Prospectus Supplement.
(f) You shall have received a rating letter assigning a rating
to each of the Class A-1 Notes and the Class A-2 Notes of "AAA" from
Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. and "Aaa" from Moody's Investors Service, Inc., which
ratings shall not have been withdrawn.
(g) You shall have received from counsel for the Indenture
Trustee a favorable opinion, dated the Closing Date, in form and
substance satisfactory to you and your counsel, to the effect that the
Indenture has been duly authorized, executed and delivered by the
Indenture Trustee and constitutes a legal, valid, binding and
enforceable agreement of the Indenture Trustee, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights in general and by
general principles of equity regardless of whether enforcement is
considered in a proceeding in equity
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<PAGE>
or at law, and as to such other matters as may be agreed upon by you
and the Indenture Trustee.
(h) You shall have received from counsel for the Owner Trustee
a favorable opinion, dated the Closing Date, in form and substance
satisfactory to you and your counsel, to the effect that the Trust
Agreement has been duly authorized, executed and delivered by the Owner
Trustee and constitutes a legal, valid, binding and enforceable
agreement of the Owner Trustee, subject as to enforceability to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights in general and by general principles
of equity regardless of whether enforcement is considered in a
proceeding in equity or at law, and as to such other matters as may be
agreed upon by you and the Owner Trustee.
(i) You shall have received from the Indenture Trustee a
certificate, signed by the President, a senior vice president or a vice
president of the Indenture Trustee, dated the Closing Date, to the
effect that each person who, as an officer or representative of the
Indenture Trustee, signed or signs the Designated Notes, the Indenture
or any other document delivered pursuant hereto, on the date hereof or
on the Closing Date, in connection with the transactions described in
the Indenture was, at the respective times of such signing and
delivery, and is now, duly elected or appointed, qualified and acting
as such officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures.
(j) You shall have received from the Owner Trustee a
certificate, signed by the President, a senior vice president or a vice
president of the Owner Trustee, dated the Closing Date, to the effect
that each person who, as an officer or representative of the Owner
Trustee, signed or signs the Trust Agreement, the Certificates or any
other document delivered pursuant hereto, on the date hereof or on the
Closing Date, in connection with the transactions described in the
Trust Agreement was, at the respective times of such signing and
delivery, and is now, duly elected or appointed, qualified and acting
as such officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures.
(k) The Policies relating to the Designated Notes shall have
been duly executed and issued at or prior to the Closing Date and shall
conform in all material respects to the description thereof in the
Final Prospectus.
(l) You shall have received a favorable opinion of in-house
counsel to the Insurer, dated the Closing Date and in form and
substance satisfactory to your counsel, to the effect that:
(i) The Insurer is an insurance corporation, duly
incorporated and validly existing under the laws of the State
of New York. The Insurer is validly licensed to do business in
New York and is authorized to issue
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the Policies and perform its obligations under the Policies in
accordance with the terms thereof.
(ii) The execution and delivery by the Insurer of the
Policies, and the Insurance and Indemnity Agreement are within
the corporate power of the Insurer and have been authorized by
all necessary corporate action on the part of the Insurer; the
Policies have been duly executed and are the valid and binding
obligation of the Insurer enforceable in accordance with its
terms except that the enforcement of the Policies may be
limited by laws relating to bankruptcy, insolvency,
reorganization, moratorium, receivership and other similar
laws affecting creditors' rights generally and by general
principles of equity.
(iii) The Insurer is authorized to deliver the
Insurance and Indemnity Agreement, and such agreement has been
duly executed and delivered and constitute the legal, valid
and binding obligations of the Insurer enforceable in
accordance with its terms except that the enforcement of the
Insurance and Indemnity Agreement may be limited by laws
relating to bankruptcy, insolvency, reorganization,
moratorium, receivership and other similar laws affecting
creditors' rights generally and by general principles of
equity and by public policy considerations relating to
indemnification for securities law violations.
(iv) No consent, approval, authorization or order of
any state or federal court or governmental agency or body is
required on the part of the Insurer, the lack of which would
adversely affect the validity or enforceability of the
Policies; to the extent required by applicable legal
requirements that would adversely affect validity or
enforceability of the Policies, the forms of the Policies have
been filed with, and approved by, all governmental authorities
having jurisdiction over the Insurer in connection with the
Policies.
(v) The Policies are not required to be registered
under the 1933 Act.
(vi) The information set forth under the caption "The
Insurer and the Policies" in the Prospectus Supplement forming
a part of the Registration Statement, insofar as such
statements constitute a description of the Policies,
accurately summarizes the Policies.
In rendering this opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the Company, the
Indenture Trustee, the Insurer and public officials. Such opinion may assume the
due authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than the Insurer.
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(m) On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Insurer's claims paying ability by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of the 1933 Act.
(n) On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Company or in any rating accorded any securities of the
Company, if any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the 1933 Act.
(o) There has not occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, since September
30, 1999, of (A) the Company and its subsidiaries or (B) the Insurer,
that is in your judgment material and adverse and that makes it in your
judgment impracticable to market the Designated Notes on the terms and
in the manner contemplated in the Final Prospectus.
(p) You shall have received from the Insurer a certificate,
signed by the president, a senior vice president or a vice president of
the Insurer, dated the Closing Date, to the effect that the signer of
such certificate has carefully examined the Policies, the Insurance and
Indemnity Agreement and the related documents and that, to the best of
his or her knowledge based on reasonable investigation:
(i) There are no actions, suits or proceedings
pending or threatened against or affecting the Insurer which,
if adversely determined, individually or in the aggregate,
would adversely affect the Insurer's performance under the
Policies or the Insurance and Indemnity Agreement;
(ii) Each person who as an officer or representative
of the Insurer, signed or signs the Policies, the Insurance
and Indemnity Agreement or any other document delivered
pursuant hereto, on the date thereof, or on the Closing Date,
in connection with the transactions described in this
Agreement was, at the respective times of such signing and
delivery, and is now, duly elected or appointed, qualified and
acting as such officer or representative, and the signatures
of such persons appearing on such documents are their genuine
signatures;
(iii) The tables regarding the Insurer's
capitalization set forth under the heading "The Insurer and
the Policies" presents fairly the capitalization of the
Insurer as of September 30, 1999;
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(iv) The audited balance sheet of the Insurer as of
December 31, 1998 and the related statement of income and
retained earnings for the fiscal year then ended, and the
accompanying footnotes, together with opinion of KPMG LLP, an
independent certificated public accountant, copies of which
are included in the Prospectus Supplement, fairly present in
all material respects the financial condition of the Insurer
as of such date and for the period covered by such statements
in accordance with generally accepted accounting principles
consistently applied; the unaudited balance sheet of the
Insurer as of September 30, 1999 and the related statement of
income and retained earnings for the three-month period then
ended, copies of which are included in the Prospectus
Supplement, fairly present in all material respects the
financial condition of the Insurer as of such date and for the
period covered by such statements in accordance with generally
accepted accounting principles applied consistently with those
principles applied in preparing the December 31, 1998 audited
statements.
(v) to the best knowledge of such officer, since
September 30, 1999, no material adverse change has occurred in
the financial position of the Insurer other than as set forth
in the Prospectus Supplement.
The Insurer shall attach to such certificate a true and
correct copy of its certificate or articles of incorporation, as appropriate,
and its bylaws, all of which are in full force and effect on the date of such
certificate.
(q) You shall have received such further information,
certificates, documents and opinions as you may reasonably have
requested not less than three business days prior to the Closing Date.
(r) All proceedings in connection with the transactions
contemplated by this Agreement and all documents incident hereto shall
be satisfactory in form and substance to you and your counsel, and you
and such counsel shall have received such information, certificates and
documents as you or they may have reasonably requested.
(s) Prior to the Closing Date, your counsel shall have been
furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
sale of the Designated Notes as herein contemplated and related
proceedings or in order to evidence the accuracy and completeness of
any of the representations and warranties, or the fulfillment of any of
the conditions, herein contained, and all proceedings taken by the
Company in connection with the issuance and sale of the Designated
Notes as herein contemplated shall be satisfactory in form and
substance to you and your counsel.
(t) Subsequent to the execution and delivery of this Agreement
none of the following shall have occurred: (i) trading in securities
generally on the New
21
<PAGE>
York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or minimum prices
shall have been established on either of such exchanges or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction; (ii) a banking moratorium
shall have been declared by Federal or state authorities; (iii) the
United States shall have become engaged in hostilities, there shall
have been an escalation of hostilities involving the United States or
there shall have been a declaration of a national emergency or war by
the United States; or (iv) there shall have occurred such a material
adverse change in general economic, political or financial conditions
(or the effect of international conditions on the financial markets of
the United States shall be such) as to make it, in the judgment of the
Underwriter, impractical or inadvisable to proceed with the public
offering or delivery of the Designated Notes on the terms and in the
manner contemplated in the Final Prospectus.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, if the Company or the Sponsor is in breach of any covenants or
agreements contained herein or if any of the opinions and certificates referred
to above or elsewhere in this Agreement shall not be in all material respects
reasonably satisfactory in form and substance to you and your counsel, this
Agreement and all your obligations hereunder may be canceled by you at, or at
any time prior to, the Closing Date. Notice of such cancellation shall be given
to the Company and the Sponsor in writing, or by telephone or facsimile
transmission confirmed in writing.
7. Payment of Expenses. The Sponsor or the Company agrees to pay: (a)
the costs incident to the authorization, issuance, sale and delivery of the
Designated Notes and any taxes payable in connection therewith; (b) the costs
incident to the preparation, printing and filing under the 1933 Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), the Base Prospectus, the Final Prospectus and any amendment or
supplement to the Base Prospectus or any document incorporated by reference
therein, all as provided in this Agreement; (d) the costs of reproducing and
distributing this Agreement; (e) the fees and expenses of qualifying the
Designated Notes under the securities laws of the several jurisdictions as
provided in Section 5(g) hereof and of preparing, printing and distributing a
Blue Sky Memorandum (including related fees and expenses of your counsel); (f)
any fees charged by securities rating services for rating the Designated Notes;
and (g) all other costs and expenses incident to the performance of the
obligations of the Company.
8. Indemnification and Contribution.
(a) Each of the Company and the Sponsor agrees to indemnify
and hold you harmless and each person, if any, who controls you within
the meaning of Section 15 of the 1933 Act from and against any and all
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not
22
<PAGE>
limited to, any loss, claim, damage, liability or action relating to
purchases and sales of the Designated Notes), to which you or any such
controlling person may become subject, under the 1933 Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of,
or is based upon, (i) any untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, (ii) the
omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, (iii) any untrue statement or alleged untrue statement of a
material fact contained in the Final Prospectus or (iv) the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading and shall
reimburse you and each such controlling person promptly upon demand for
any legal or other expenses reasonably incurred by you or such
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred; provided, however, that the
Company and the Sponsor shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Base Prospectus,
the Final Prospectus or the Registration Statement in reliance upon and
in conformity with written information (including any Derived
Information) furnished to the Company or the Sponsor by you
specifically for inclusion therein; and provided, further, that as to
any Base Prospectus this indemnity shall not inure to your benefit or
the benefit of any controlling person on account of any loss, claim,
damage, liability or action arising from the sale of the Designated
Notes to any person by you if you failed to send or give a copy of the
Final Prospectus, as amended or supplemented, to that person within the
time required by the 1933 Act. For purposes of the last proviso to the
immediately preceding sentence, the term "Final Prospectus" shall not
be deemed to include the documents incorporated therein by reference,
and you shall not be obligated to send or give any supplement or
amendment to any document incorporated therein by reference to any
person other than a person to whom you had delivered such incorporated
document or documents in response to a written request therefor. The
foregoing indemnity agreement is in addition to any liability which
each of the Company and the Sponsor may otherwise have to you or any
person who controls you.
(b) You agree to indemnify and hold harmless each of the
Company and the Sponsor, each of its directors, each of its officers
who signed the Registration Statement, and each person, if any, who
controls the Company and the Sponsor within the meaning of Section 15
of the 1933 Act against any and all loss, claim, damage or liability,
or any action in respect thereof, to which the Company, the Sponsor or
any such director, officer or controlling person may become subject,
under the 1933 Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement, (ii) the omission or alleged omission to
state therein a material fact
23
<PAGE>
required to be stated therein or necessary to make the statements
therein not misleading, (iii) any untrue statement or alleged untrue
statement of a material fact contained in the Final Prospectus or (iv)
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
furnished to the Company and the Sponsor by or on your behalf
specifically for inclusion therein and provided that such written
information was not based upon Company-Provided Information, and shall
reimburse the Company and the Sponsor and any such director, officer or
controlling person for any legal or other expenses reasonably incurred
by the Company and the Sponsor or any director, officer or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as
such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which you may otherwise have to each of the
Company and the Sponsor or any such director, officer or controlling
person.
(c) Promptly after receipt by any indemnified party under this
Section 8 of notice of any claim or the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be
made against any indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section 8 except to the extent it has been materially prejudiced
by such failure and provided, further, that the failure to notify any
indemnifying party shall not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party. After notice from the indemnifying party to the indemnified
party of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under this
Section 8 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for
24
<PAGE>
such indemnified party to employ separate counsel; or (iii) the indemnifying
party has failed to assume the defense of such action and employ counsel
reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys (in
addition to local counsel) at any time for all such indemnified parties, which
firm shall be designated in writing by you, if the indemnified parties under
this Section 8 consist of you or any of your controlling persons, or by the
Company, if the indemnified parties under this Section 8 consist of the Company,
the Sponsor, or any of the Company's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity
agreements contained in Sections 8(a), 8(b) and 8(c) shall use its best efforts
to cooperate with the indemnifying party in the defense of any such action or
claim. No indemnifying party shall be liable for any settlement of any such
action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there be a
final judgment for the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.
(d) You agree to deliver to the Company or the Sponsor no
later than the date on which the Prospectus Supplement is required to
be filed pursuant to Rule 424 with a copy of its Derived Information
(defined below) for filing with the Commission on Form 8-K.
(e) You agree, assuming all Company-Provided Information
(defined below) is accurate and complete in all material respects, to
indemnify and hold harmless the Company, the Sponsor, each of the
Company's and the Sponsor's officers and directors and each person who
controls the Company and the Sponsor within the meaning of Section 15
of the 1933 Act against any and all losses, claims, damages or
liabilities, joint or several, to which they may become subject under
the 1933 Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement of a material fact contained in the Derived
Information provided by
25
<PAGE>
you, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating
or defending or preparing to defend any such loss, claim, damage,
liability or action as such expenses are incurred. Your obligations
under this Section 8(e) shall be in addition to any liability which you
may otherwise have.
(f) Each of the Company and the Sponsor agree to indemnify and
hold harmless the Underwriter, each of the Underwriter's officers and
directors and each person who controls the Underwriter within the
meaning of Section 15 of the 1933 Act against any and all losses,
claims, damages or liabilities, joint or several, to which they may
become subject under the 1933 Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement of a material fact
contained in the Company-Provided Information provided by the Company
or the Sponsor, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, and
agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred by him, her or it in connection with
investigating or defending or preparing to defend any such loss, claim,
damage, liability or action as such expenses are incurred. Each of the
Company's and the Sponsor's obligations under this Section 8(f) shall
be in addition to any liability which they may otherwise have.
The procedures set forth in Section 8(c) shall be equally
applicable to Sections 8(e) and 8(f).
(g) For purposes of this Section 8, the term "Derived
Information" means such portion, if any, of the information delivered
to the Company or the Sponsor by the Underwriter pursuant to Section
8(e) for filing with the Commission on Form 8-K as:
(i) is not contained in the Final Prospectus without
taking into account information incorporated therein by
reference;
(ii) does not constitute Company-Provided
Information; and
(iii) is of the type of information defined as
Collateral Term Sheets, Structural Term Sheets or
Computational Materials (as such terms are interpreted in the
No-Action Letters).
"Company-Provided Information" means any computer tape
furnished to the Underwriter by the Company concerning the Mortgage Loans
comprising the Trust or any other information furnished by the Company to the
Underwriter that is relied on or is
26
<PAGE>
reasonably anticipated by the parties hereto to be relied on by the Underwriter
in the course of the Underwriter's preparation of its Derived Information or the
written information to be included in the Prospectus Supplement by the
Underwriter as set forth in Section 8(i) herein.
The terms "Collateral Term Sheet" and "Structural Term Sheet"
shall have the respective meanings assigned to them in the February 13, 1995
letter (the "PSA Letter") of Cleary, Gottlieb, Steen & Hamilton on behalf of the
Public Securities Association (which letter, and the SEC staff's response
thereto, were publicly available February 17, 1995). The term "Collateral Term
Sheet" as used herein includes any subsequent Collateral Term Sheet that
reflects a substantive change in the information presented. The term
"Computational Materials" has the meaning assigned to it in the May 17, 1994
letter (the "Kidder letter" and together with the PSA Letter, the "No-Action
Letters") of Brown & Wood on behalf of Kidder, Peabody & Co., Inc. (which
letter, and the SEC staff's response thereto, were publicly available May 20,
1994).
(h) If the indemnification provided for in this Section 8
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section 8 in respect of any loss, claim,
damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying
such indemnified party, contribute to the amount paid or payable by
such indemnified party as a result of such loss, claim, damage or
liability, or action in respect thereof, (i) in such proportion as
shall be appropriate to reflect the relative benefits received by the
Company and the Sponsor on the one hand and you on the other from the
offering of the Designated Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the
indemnified party failed to give the notice required under Section
8(c), in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Sponsor on the one hand and you on the
other with respect to the statements or omissions which resulted in
such loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations.
The relative benefits to you and the Company and the Sponsor
shall be deemed to be in such proportion so that you are responsible for 0.25%
of the public offering price and the Company and the Sponsor are responsible for
99.75% of the public offering price.
The relative fault of each of you and the Company and the
Sponsor shall be determined by reference to whether the untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact relates to information supplied by the Company, the Sponsor or by you, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission and other equitable
considerations.
The Company, the Sponsor and you agree that it would not be
just and equitable if contributions pursuant to this Section 8(h) were to be
determined by pro rata
27
<PAGE>
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid or payable by
an indemnified party as a result of the loss, claim, damage or liability, or
action in respect thereof, referred to above in this Section 8(h) shall be
deemed to include, for purposes of this Section 8(h), any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim.
In no case shall you be responsible for any amount in excess
of the underwriting discount applicable to the Designated Notes purchased by you
hereunder. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
You confirm that the information set forth in the fifth
paragraph under the caption "Underwriting" in the Prospectus Supplement,
together with the Derived Information constitutes the only information furnished
in writing to the Company or the Sponsor by you or on your behalf specifically
for inclusion in the Registration Statement and the Final Prospectus.
9. Termination.
(a) This Agreement shall be subject to termination in your
absolute discretion, by notice given to the Company or the Sponsor
prior to delivery of and payment for the Designated Notes, if, prior to
such time, (i) trading of securities generally on the New York Stock
Exchange or the American Stock Exchange shall have been suspended or
materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or
New York State authorities or (iii) there shall have occurred any
material outbreak or declaration of hostilities or other calamity or
crisis the effect of which on the financial markets of the United
States is such as to make it, in your reasonable judgment,
impracticable to market the Designated Notes on the terms specified
herein.
(b) If the sale of the Designated Notes shall not be
consummated because any condition to your obligations set forth in
Section 6 hereof is not satisfied or because of any refusal, inability
or failure on the part of the Company or the Sponsor to perform any
agreement herein or comply with any provision hereof other than by
reason of your default, the Company and the Sponsor shall reimburse you
for the reasonable fees and expenses of your counsel and for such other
out-of-pocket expenses as shall have been incurred by you in connection
with this Agreement and the proposed purchase of the Designated Notes,
and upon demand the Company and the Sponsor shall pay the full amount
thereof to you.
(c) This Agreement will survive delivery of and payment for
the Designated Notes. The provisions of Sections 1, 5, 7, 8 and this
Section 9(c) shall survive the termination or cancellation of this
Agreement.
28
<PAGE>
10. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to you, will be mailed, delivered or
transmitted by facsimile and confirmed to you at 600 Steamboat Road, Greenwich,
Connecticut 06830, attention: Legal Department; or, if sent to (i) the Sponsor,
will be mailed, delivered or transmitted by facsimile and confirmed to it at 700
Larkspur Landing Circle, Suite 240, Larkspur, California 94939, attention:
Finance Department or (ii) the Company, will be mailed, delivered or transmitted
by facsimile and confirmed to it at 700 Larkspur Landing Circle, Suite 250,
Larkspur, California 94939, attention: Finance Department.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons and their successors and assigns, and no
other person will have any right or obligation hereunder.
12. Applicable Law; Counterparts. This Agreement will be governed by
and construed in accordance with the laws of the State of New York. This
Agreement may be executed in any number of counterparts, each of which shall for
all purposes be deemed to be an original and all of which shall together
constitute but one and the same instrument.
13. Survival. The respective indemnities, representations, warranties
and agreements of the Company and you contained in this Agreement, or made by or
on behalf of them, respectively, pursuant to this Agreement, shall survive the
delivery of and payment for the Designated Notes and shall remain in full force
and effect, regardless of any investigation made by or on behalf of any of them
or any person controlling any of them.
14. Definition of the Term "Business Day". For purposes of this
Agreement, "Business Day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
15. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED IN
ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW,
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
16. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
29
<PAGE>
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us a counterpart hereof, whereupon this
letter and your acceptance shall represent a binding agreement between the
Company, the Sponsor and you.
Very truly yours,
GREENPOINT MORTGAGE FUNDING, INC.
By: /s/ Gilbert J. MacQuarrie
--------------------------------------
Name: Gilbert J. MacQuarrie
Title: Executive Vice President, Chief
Financial Officer
GREENPOINT MORTGAGE SECURITIES INC.
By: /s/ Kristen Decker
--------------------------------------
Name: Kristen Decker
Title: Vice President
The foregoing Agreement is hereby
confirmed and accepted as of
the date first above written.
GREENWICH CAPITAL MARKETS, INC.
By: /s/ Frank Skibo
------------------------------
Name: Frank Skibo
Title: Vice President
[Underwriting Agreement]
<PAGE>
SCHEDULE I
Underwriting Agreement dated December 15, 1999.
As used in this Agreement, the term "Registration Statement" refers to the
Registration Statement on Form S-3 (File No. 333-79833) filed on June 2, 1999
and declared effective by the Commission on June 14, 1999.
Closing Date: December 22, 1999.
- --------------------------------------------------------------------------------
Title, Purchase Price and Description of Designated Notes:
GreenPoint Home Equity Loan Trust 1999-2, Home Equity Loan Asset-Backed
Notes, Series 1999-2, $193,275,000 Variable Rate Class A-1 Notes, and
$52,370,000 Variable Rate Class A-2 Notes.
Pool I Principal Balance as of Initial Cut-Off Date (Relating to Class A-1):
$154,536,428
Pool II Principal Balance as of Initial Cut-Off Date (Relating to Class A-2):
$41,109,718
Initial Cut-off Date: November 30, 1999
<PAGE>
EXHIBIT 4.1
EXECUTION COPY
================================================================================
GREENPOINT MORTGAGE SECURITIES INC.,
Sponsor,
GREENPOINT MORTGAGE FUNDING, INC.,
Servicer,
GREENPOINT HOME EQUITY LOAN TRUST 1999-2,
Issuer,
and
BANK ONE, NATIONAL ASSOCIATION
Indenture Trustee
-----------------------
SALE AND SERVICING AGREEMENT
Dated as of December 1, 1999
----------------------
Home Equity Loan Asset-Backed Notes
Series 1999-2
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I DEFINITIONS.............................................................................................1
Section 1.01. Definitions..................................................................................1
Section 1.02. Other Definitional Provisions................................................................1
Section 1.03. Interest Calculations........................................................................2
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF NOTES; TAX TREATMENT................................2
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to Fund Advances
Under Credit Line Agreements............................................................2
Section 2.02. Further Encumbrance of Trust Property........................................................6
Section 2.03. Acceptance by Indenture Trustee; Certain Substitution of Mortgage Loans.....................7
Section 2.04. Representations and Warranties Regarding the Servicer and the Sponsor........................8
Section 2.05. Representations and Warranties of the Sponsor Regarding the Mortgage
Loans; Retransfer of Certain Mortgage Loans............................................10
Section 2.06. Covenants of the Sponsor....................................................................18
Section 2.07. Retransfers of Mortgage Loans at Election of Sponsor........................................19
Section 2.08. Execution and Authentication of Notes.......................................................20
Section 2.09. Tax Treatment...............................................................................20
Section 2.10. Conveyance of the Subsequent Mortgage Loans.................................................20
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.......................................................23
Section 3.01. The Servicer................................................................................23
Section 3.02. Collection of Certain Mortgage Loan Payments................................................24
Section 3.03. Withdrawals from the Collection Account.....................................................26
Section 3.04. Maintenance of Hazard Insurance; Property Protection Expenses...............................26
Section 3.05. Assumption and Modification Agreements......................................................27
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of Certain Mortgage
Loans..................................................................................27
Section 3.07. Indenture Trustee to Cooperate..............................................................28
Section 3.08. Servicing Compensation; Payment of Certain Expenses by Servicer.............................29
Section 3.09. Annual Statement as to Compliance...........................................................29
Section 3.10. Annual Servicing Report.....................................................................30
Section 3.11. Annual Opinion of Counsel...................................................................30
Section 3.12. Access to Certain Documentation and Information Regarding the Mortgage
Loans..................................................................................30
Section 3.13. Maintenance of Certain Servicing Insurance Policies.........................................31
Section 3.14. Reports to the Securities and Exchange Commission...........................................31
Section 3.15. Tax Returns.................................................................................31
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 3.16. Information Required by the Internal Revenue Service Generally and Reports
of Foreclosures and Abandonments of Mortgaged Property.................................31
ARTICLE IV SERVICING CERTIFICATE.................................................................................32
Section 4.01. Servicing Certificate.......................................................................32
Section 4.02. Reserve Fund................................................................................34
ARTICLE V THE SERVICER AND THE SPONSOR...........................................................................34
Section 5.01. Liability of the Servicer and the Sponsor...................................................34
Section 5.02. Merger or Consolidation of, or Assumption of the Obligations of, the
Servicer or the Sponsor................................................................34
Section 5.03. Limitation on Liability of the Servicer and Others..........................................34
Section 5.04. Servicer Not to Resign......................................................................35
Section 5.05. Delegation of Duties........................................................................35
Section 5.06. Indemnification of the Trust by the Servicer................................................36
Section 5.07. Indemnification of the Trust by the Sponsor.................................................36
Section 5.08. Limitation on Liability of the Sponsor......................................................36
ARTICLE VI SERVICING TERMINATION.................................................................................37
Section 6.01. Events of Servicing Termination.............................................................37
Section 6.02. Indenture Trustee to Act; Appointment of Successor..........................................39
Section 6.03. Notification to Securityholders.............................................................40
ARTICLE VII TERMINATION..........................................................................................40
Section 7.01. Termination.................................................................................40
ARTICLE VIII ADMINISTRATIVE DUTIES OF THE SERVICER...............................................................41
Section 8.01. Administrative Duties.......................................................................41
Section 8.02. Records.....................................................................................43
Section 8.03. Additional Information to be Furnished to the Issuer........................................43
ARTICLE IX MISCELLANEOUS PROVISIONS..............................................................................43
Section 9.01. Amendment...................................................................................43
Section 9.02. Recordation of Agreement....................................................................45
Section 9.03. Limitation on Rights of Noteholders.........................................................45
Section 9.04. Governing Law...............................................................................46
Section 9.05. Notices.....................................................................................46
Section 9.06. Severability of Provisions..................................................................46
Section 9.07. Assignment..................................................................................47
Section 9.08. Third-Party Beneficiaries...................................................................47
Section 9.09. Counterparts................................................................................47
Section 9.10. Effect of Headings and Table of Contents....................................................47
Section 9.11. Insurance Agreement.........................................................................47
Section 9.12. Nonpetition Covenant........................................................................47
</TABLE>
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EXHIBITS
EXHIBIT A: MORTGAGE LOAN SCHEDULE...........................................A-1
EXHIBIT B: FORM OF OPINION OF COUNSEL.......................................B-1
EXHIBIT C: OFFICER'S CERTIFICATES...........................................C-1
EXHIBIT D: FORM OF CREDIT LINE AGREEMENT....................................D-1
EXHIBIT E: FORM OF MORTGAGE NOTE (SECOND LIEN)..............................E-1
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SALE AND SERVICING AGREEMENT, dated as of December 1, 1999,
(the "Agreement") among GREENPOINT HOME EQUITY LOAN TRUST 1999-2, a Delaware
business trust (the "Issuer"), GREENPOINT MORTGAGE SECURITIES INC., a Delaware
corporation (the "Sponsor"), GREENPOINT MORTGAGE FUNDING, INC., a New York
corporation (the "Servicer"), and BANK ONE, NATIONAL ASSOCIATION, a national
banking association (the "Indenture Trustee")
WHEREAS, the Issuer desires to purchase a portfolio of
Mortgage Loans arising in connection with Loan Agreements acquired by GreenPoint
Mortgage Funding, Inc.;
WHEREAS, the Sponsor has purchased such Mortgage Loans from
GreenPoint Mortgage Funding, Inc. and is willing to sell such Mortgage Loans to
the Issuer;
WHEREAS, the Issuer desires to purchase Subsequent Mortgage
Loans arising in connection with Loan Agreements to be acquired by GreenPoint
Mortgage Funding, Inc.;
WHEREAS, the Sponsor has an agreement to purchase such
Subsequent Mortgage Loans from GreenPoint Mortgage Funding, Inc. and is willing
to sell such Subsequent Mortgage Loans to the Issuer;
WHEREAS, such Mortgage Loans consist of certain home equity
revolving lines of credit (the "HELOC Mortgage Loans") and certain second lien,
closed-end mortgage loans (the "Closed End Mortgage Loans");
WHEREAS, the Servicer is willing to service all such Mortgage
Loans;
NOW, THEREFORE, in consideration of the promises and mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. All capitalized terms used in this Agreement
and not otherwise defined herein, shall have the meanings assigned thereto in
Annex A to the Indenture dated as of December 1, 1999, between the Issuer and
the Indenture Trustee, as the same may be amended and supplemented from time to
time.
Section 1.02. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined meanings
when used in any instrument governed hereby and in any certificate or other
document made or delivered pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement, in any instrument governed hereby and in
any certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in this Agreement or in any such instrument,
certificate or other document, and accounting terms partly defined in this
Agreement or in any such instrument, certificate or other
<PAGE>
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles as in effect on the date of
this Agreement or any such instrument, certificate or other document, as
applicable. To the extent that the definitions of accounting terms in this
Agreement or in any such instrument, certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting
principles, the definitions contained in this Agreement or in any such
instrument, certificate or other document shall control.
(c) Any agreement, instrument or statute defined or referred to herein
or in any instrument or certificate delivered in connection herewith means such
agreement, instrument or statute as from time to time amended, modified or
supplemented and includes (in the case of agreements or instruments) references
to all attachments thereto and instruments incorporated therein; references to a
Person are also to its permitted successors and assigns.
Section 1.03. Interest Calculations. All calculations of interest
hereunder that are made in respect of the Principal Balance of a Mortgage Loan
shall be made on a daily basis using a 365-day year. All calculations of
interest on the Notes shall be made on the basis of the actual number of days in
an Interest Period and a year assumed to consist of 360 days. The calculation of
the Servicing Fee shall be made on the basis of the actual number of days
elapsed in a 360-day year. All dollar amounts calculated hereunder shall be
rounded to the nearest penny with one-half of one penny being rounded down.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF NOTES;
TAX TREATMENT
Section 2.01. Conveyance of Mortgage Loans; Retention of Obligation to
Fund Advances Under Credit Line Agreements. (a) In consideration of the Issuer's
delivery to or upon the order of the Sponsor on the Closing Date of the net
proceeds from the sale of the Notes and Certificates and the other amounts to be
distributed from time to time to the Sponsor in accordance with the terms of
this Agreement, the Sponsor, concurrently with the execution and delivery of
this Agreement, hereby sells, transfers, assigns, sets over and otherwise
conveys to the Issuer, without recourse (subject to Sections 2.03 and 2.05), all
of its right, title and interest in and to (i) each Initial Mortgage Loan,
including its Principal Balance (including any Additional Balances related
thereto) and all collections in respect thereof received after the Initial
Cut-Off Date (excluding Interest Collection due on or prior to the Initial
Cut-Off Date); (ii) each Subsequent Mortgage Loan (including any Additional
Balances related thereto) and all collections in respect thereof received after
the related Subsequent Cut-Off Date (excluding Interest Collections due on or
prior to such related Subsequent Cut-Off Date); (iii) property that secured a
Mortgage Loan that is acquired by foreclosure or deed in lieu of foreclosure;
(iv) all of the Sponsor's rights under the Purchase Agreement (including all
representations and warranties of the Company contained therein); (v) the
Sponsor's rights under the hazard insurance policies; (vi) the Reserve Fund;
(vii) the Policy; (viii) the Pre-Funding Account; and (ix) any proceeds of the
foregoing and all other assets included or to be included in the Trust for the
benefit of Securityholders and the Insurer; provided, however, neither the
Indenture Trustee nor the Trust
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assumes the obligation under any Credit Line Agreement that provides for the
funding of future advances to the Mortgagor thereunder, and neither the Trust
nor the Indenture Trustee shall be obligated or permitted to fund any such
future advances. With respect to the HELOC Mortgage Loans, Additional Balances
shall be part of the related Principal Balance and are hereby transferred to the
Trust on the Closing Date pursuant to this Section 2.01, and therefore part of
the Trust Property. On or prior to the Closing Date, the Sponsor shall cause the
Insurer to deliver the Policy to the Indenture Trustee for the benefit of the
Noteholders. It is the intention of the Sponsor that the transfer and assignment
contemplated by this Agreement shall constitute a sale of the Mortgage Loans and
other Trust Property from the Sponsor to the Issuer and that such sale should
constitute a valid transfer and assignment of the Mortgage Loans and other Trust
Property to the Issuer and the beneficial interest in and title to the Mortgage
Loans and the other Trust Property shall not be part of the Sponsor's estate in
the event of the filing of a bankruptcy petition by or against the Sponsor under
any bankruptcy law. In the event that, notwithstanding the intent of the
Sponsor, the transfer and assignment contemplated hereby is held not to be a
sale, this Agreement shall constitute a grant of a security interest in the
property referred to in this Section 2.01 for the benefit of the Securityholders
and the Insurer. To the extent that the fair market value of any Additional
Balance or Subsequent Mortgage Loan sold by the Sponsor to the Issuer is greater
than the cash consideration paid by the Issuer for such Additional Balance or
Subsequent Mortgage Loan, the difference between such fair market value and the
amount of such cash consideration shall be deemed to be a capital contribution
made to the Issuer by the Sponsor.
(b) Each of the Company and the Sponsor agrees to take or cause to be
taken such actions and execute such documents (including, without limitation,
the filing of all necessary continuation statements for the UCC-1 financing
statements filed in the States of California and Delaware, respectively, (which
shall have been filed on or as of the Closing Date) describing the Cut-Off Date
Principal Balances and Additional Balances and naming (i) the Company as debtor
and the Sponsor as secured party, and (ii) the Sponsor as debtor and the Issuer
as secured party and any amendments to UCC-1 financing statements required to
reflect a change in the name or corporate structure of the Company or the
Sponsor or the filing of any additional UCC-1 financing statements due to the
change in the principal office of the Company or the Sponsor (within 10 days of
any event necessitating such filing) as are necessary to perfect and protect the
Noteholders' and Insurer's interests in each Cut-Off Date Principal Balance and
Additional Balance and the proceeds thereof (other than maintaining possession
by the Indenture Trustee of the Mortgage Loans and the Mortgage Files).
(c) In connection with such transfer and assignment, the Servicer shall
deliver to the Indenture Trustee the following documents or instruments (each a
"Related Document" and together for each Mortgage Loan, the "Mortgage File")
with respect to each Initial Mortgage Loan on the Closing Date and will deliver
with respect to each Subsequent Mortgage Loan on the related Subsequent Transfer
Date:
(i) the original Mortgage Note endorsed in blank;
(ii) an original Assignment of Mortgage in blank in recordable
form;
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<PAGE>
(iii) the original recorded Mortgage or, if, in connection
with any Mortgage Loan, the original recorded Mortgage with evidence of
recording thereon cannot be delivered on or prior to the Closing Date
because of a delay caused by the public recording office where such
original Mortgage has been delivered for recordation or because such
original Mortgage has been lost, the Sponsor shall deliver or cause to
be delivered to the Indenture Trustee, a true and correct copy of such
Mortgage, together with (i) in the case of a delay caused by the public
recording office, an Officer's Certificate of the Sponsor stating that
such original Mortgage has been dispatched to the appropriate public
recording official or (ii) in the case of an original Mortgage that has
been lost, a certificate by the appropriate county recording office
where such Mortgage is recorded;
(iv) if applicable, the original intervening assignments, if
any ("Intervening Assignments"), with evidence of recording thereon,
showing a complete chain of title to the Mortgage from the originator
to the Indenture Trustee or, if any such original Intervening
Assignment has not been returned from the applicable recording office
or has been lost, a true and correct copy thereof, together with (i) in
the case of a delay caused by the public recording office, an Officer's
Certificate of the Sponsor stating that such original Intervening
Assignment has been dispatched to the appropriate public recording
official for recordation or (ii) in the case of an original Intervening
Assignment that has been lost, a certificate by the appropriate county
recording office where such Mortgage is recorded;
(v) either a title policy, a title search or guaranty title
with respect to the related Mortgaged Property;
(vi) the original of any guaranty executed in connection with
the Mortgage Note;
(vii) the original of each assumption, modification,
consolidation or substitution agreement, if any, relating to the
Mortgage Loans; and
(viii) any security agreement, chattel mortgage or equivalent
instrument executed in connection with the Mortgage;
provided, however, that as to any Mortgage Loan, if (a) as evidenced by an
Opinion of Counsel delivered to and in form and substance satisfactory to the
Indenture Trustee and the Insurer, (x) an optical image or other representation
of the Related Documents specified in clauses (i) through (viii) above are
enforceable in the relevant jurisdictions to the same extent as the original of
such document and (y) such optical image or other representation does not impair
the ability of an owner of such Mortgage Loan to transfer its interest in such
Mortgage Loan, and (b) the retention of such documents in such format will not
result in a reduction in the then current rating of the Notes, without regard to
the Policy, such optical image or other representation may be delivered by the
Servicer, to the Indenture Trustee in lieu of the physical documents specified
above.
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The Sponsor hereby confirms to the Indenture Trustee that it has caused
the portions of the Electronic Ledgers relating to the Initial Mortgage Loans as
of the Closing Date, and that it will cause such Electronic Ledgers with respect
to each Subsequent Mortgage Loans as of the related Subsequent Transfer Date, to
be clearly and unambiguously marked, and has made, or will make, the appropriate
entries in its general accounting records to indicate that such Mortgage Loans
have been transferred to the Trust. The Servicer hereby confirms to the
Indenture Trustee that it has clearly and unambiguously made appropriate entries
in its general accounting records indicating that such Mortgage Loans constitute
part of the Trust and are serviced by it on behalf of the Trust in accordance
with the terms hereof. The Servicer hereby confirms to the Indenture Trustee
that it will clearly and unambiguously make appropriate entries in its general
accounting records indicating that each Subsequent Mortgage Loan constitutes
part of the Trust and is serviced by it on behalf of the Trust in accordance
with the terms hereof as of the related Subsequent Transfer Date.
(d) Notwithstanding the characterization of the Notes as debt for
Federal, state and local income and franchise tax purposes, the parties hereto
intend to treat the transfer of the Mortgage Loans to the Trust as provided
herein as a sale, for certain non-tax purposes, of all the Sponsor's right,
title and interest in and to the Mortgage Loans, whether now existing or
hereafter created, and the other property described above and all proceeds
thereof. In the event such transfer is deemed not to be a sale for such
purposes, the Sponsor grants to the Trust, a security interest in all of such
party's right, title and interest in, to and under the Mortgage Loans, whether
now existing or hereafter created, and the other property described above and
all proceeds thereof; and this Agreement shall constitute a security agreement
under applicable law.
(e) Within 90 days following delivery of the Mortgage Files to the
Indenture Trustee pursuant to this Section, the Indenture Trustee shall review
each such Mortgage File to ascertain that all required documents set forth in
this Section 2.01 have been executed and received, and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule and in so
doing the Indenture Trustee may rely on the purported due execution and
genuineness of any signature thereon. If within such 90-day period the Indenture
Trustee finds any document constituting a part of a Mortgage File not to have
been executed or received or to be unrelated to the Mortgage Loans identified in
said Mortgage Loan Schedule or, if in the course of its review, the Indenture
Trustee determines that such Mortgage File is otherwise defective in any
material respect, the Indenture Trustee shall promptly upon the conclusion of
its review notify the Sponsor and the Insurer, and the Sponsor shall have a
period of 90 days after such notice within which to correct or cure any such
defect.
The Indenture Trustee shall have no responsibility for reviewing any
Mortgage File except as expressly provided in this Section 2.01. In reviewing
any Mortgage File pursuant to this Section, the Indenture Trustee shall have no
responsibility for determining whether any document is valid and binding,
whether the text of any assignment or endorsement is in proper or recordable
form (except, if applicable, to determine if the Indenture Trustee is the
assignee or endorsee), whether any document has been recorded in accordance with
the requirements of any applicable jurisdiction, or whether a blanket assignment
is permitted in any applicable jurisdiction, whether any Person executing any
document is authorized to do so or whether any signature thereon is genuine, but
shall only be required to determine whether a document has
5
<PAGE>
been executed, that it appears to be what it purports to be, and, where
applicable, that it purports to be recorded.
(f) The Sponsor shall take all necessary steps to prepare and submit
for recordation an Assignment or Mortgage in the name of the Indenture Trustee
for each Initial Mortgage Loan within 30 days after the Closing Date and for
each Subsequent Mortgage Loan within 30 days after the related Subsequent
Transfer Date.
(g) The Sponsor shall sell, assign, transfer, set over and otherwise
convey without recourse to the Indenture Trustee all right, title and interest
of the Sponsor in and to any Eligible Substitute Mortgage Loan delivered to the
Indenture Trustee on behalf of the Trust by the Sponsor pursuant to Section 2.03
or Section 2.05 hereof and all its right, title and interest to principal
collected and interest accruing on such Eligible Substitute Mortgage Loan on and
after the applicable Substitute Cut-Off Date; provided, however, that the
Sponsor shall reserve and retain all right, title and interest in and to
payments of interest due on such Eligible Substitute Mortgage Loan prior to the
applicable Substitute Cut-Off Date; provided, further, that neither the Trust
nor the Indenture Trustee shall be obligated to fund any future advances to the
related Mortgagor under such Eligible Substitute Mortgage Loan.
In connection with any transfer and assignment of an Eligible
Substitute Mortgage Loan to the Indenture Trustee on behalf of the Trust, the
Sponsor agrees to cause to be delivered to the Indenture Trustee the items
described in Section 2.01(c) on the date of such transfer and assignment or, if
a later delivery time is permitted by Section 2.01(c), then no later than such
later delivery time.
(h) Each Defective Mortgage Loan that is required to be repurchased or
substituted pursuant to the provisions this Agreement or the Purchase Agreement
shall, upon such repurchase or substitution in accordance with the provisions
hereof, be released from the Trust and from the lien created by the Indenture.
As to each Mortgage Loan released from the Trust in connection with the
repurchase thereof or the conveyance of an Eligible Substitute Mortgage Loan
therefor, the Indenture Trustee will transfer, assign, set over and otherwise
convey without recourse, to or upon the order of the Sponsor, all of its right,
title and interest in and to such released Mortgage Loan and all the Trust's
right title and interest to principal collected and interest accruing on such
released Mortgage Loan on and after the first day of the calendar month in which
such Mortgage Loan is released; the applicable; provided, however, that the
Trust shall reserve and retain all right, title and interest in and to payments
of principal and interest collected on such released Mortgage Loan prior to such
date.
Section 2.02. Further Encumbrance of Trust Property.
(a) Immediately upon the conveyance to the Trust by the Sponsor of any
item of the Trust Property pursuant to Section 2.01, all right, title and
interest of the Sponsor in and to such item of Trust Property shall terminate,
and all such right, title and interest shall vest in the Trust, in accordance
with the Trust Agreement and Sections 3802 and 3805 of the Delaware Business
Trust Act (12 Del. Code, Section 3801 et seq.).
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<PAGE>
(b) Immediately upon the vesting of the Trust Property in the Trust,
the Trust shall have the sole right to pledge or otherwise encumber, such Trust
Property. Pursuant to the Indenture and contemporaneously with such property
vesting in the Trust pursuant to (a) above, the Trust shall grant a security
interest in the Trust Property to secure the repayment of the Notes. The
Certificates shall represent the beneficial ownership interest in the Trust
Property, and the Certificateholders shall be entitled to receive distributions
with respect thereto as set forth herein.
(c) Prior to the payment in full on the Notes, the payment of all
amounts due to the Insurer under the Insurance Agreement, the termination of the
Policy (as defined therein) and the surrender of the Policy by the Indenture
Trustee to the Insurer, the Indenture Trustee shall hold the Trust Property on
behalf of the Noteholders and the Insurer. Following the payment in full of the
Notes and the release and discharge of the Indenture, all covenants of the
Issuer under Article III of the Indenture shall, until payment in full of the
Certificates, remain as covenants of the Issuer for the benefit of the
Certificateholders, enforceable by the Certificateholders to the same extent as
such covenants were enforceable by the Noteholders prior to the discharge of the
Indenture. Any rights of the Indenture Trustee under Article III of the
Indenture, following the discharge of the Indenture, shall vest in the
Certificateholders.
Section 2.03. Acceptance by Indenture Trustee; Certain Substitution of
Mortgage Loans
(a) The Indenture Trustee shall, at such time as there are no
Securities outstanding and all sums due to (i) the Indenture Trustee or any
agent or counsel thereof pursuant to the Indenture, (ii) the Indenture Trustee
pursuant to this Agreement and (iii) the Insurer pursuant to the Insurance
Agreement, have been paid, release any remaining portion of the Trust Property
to the Sponsor; provided, that the release of the Reserve fund is subject to
Section 2.05 of the Insurance Agreement.
(b) The Trust hereby acknowledges its receipt of the Policy and the
Mortgage Loans, and declares that the Indenture Trustee holds and will hold such
instrument, and to the extent that any documents are delivered to it pursuant to
Section 2.01, will hold such documents, and all amounts received by it
thereunder and hereunder, in trust, upon the terms herein set forth, for the use
and benefit of all present and future Securityholders and the Insurer. If the
time to cure any defect in respect of any Mortgage Loan of which the Indenture
Trustee has notified the Sponsor following the review pursuant to Section 2.01
has expired or if at any time any loss is suffered by the Indenture Trustee on
behalf of the Noteholders or the Insurer, in respect of any Mortgage Loan as a
result of (i) a defect in any document constituting a part of its Mortgage File
or (ii) an Assignment of Mortgage to the Indenture Trustee not having been
recorded as required by Section 2.01, then on the next succeeding Business Day
(i) substitute in lieu of such Mortgage Loan all Eligible Substitute Mortgage
Loans and, deliver the Substitution Amount applicable thereto to the Servicer
for deposit in the Collection Account or (ii) purchase such Mortgage Loan at a
purchase price equal to the Loan Purchase Price thereof, which purchase price
shall be delivered to the Servicer for deposit in the Collection Account. Upon
receipt of any Mortgage Loan or of written notification signed by a Servicing
Officer to the effect that the Loan Purchase Price in respect of a Defective
Mortgage Loan has been deposited into the Collection Account, then as promptly
as practicable, the Indenture Trustee shall execute such documents and
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instruments of transfer presented by the Sponsor, in each case without recourse,
representation or warranty, and take such other actions as shall reasonably be
requested by the Sponsor to effect such transfer by the Trust of such Defective
Mortgage Loan pursuant to this Section. It is understood and agreed that the
obligation of the Sponsor to accept a transfer of a Defective Mortgage Loan and
to either convey an Eligible Substitute Mortgage Loan or to make a deposit of
any related Loan Purchase Price into the Collection Account shall constitute the
sole remedy respecting such defect available to Noteholders and the Indenture
Trustee against the Sponsor.
(c) As to any Eligible Substitute Mortgage Loan, the Sponsor shall, if
required to deliver any such Eligible Substitute Mortgage Loan, deliver to the
Indenture Trustee with respect to such Eligible Substitute Mortgage Loan such
documents and agreements as are required to be held by the Indenture Trustee in
accordance with Section 2.01. For any Collection Period during which the Sponsor
substitutes one or more Eligible Substitute Mortgage Loan, the Servicer shall
determine the Substitution Amount which amount shall be deposited by the Sponsor
in the Collection Account at the time of substitution. All amounts received in
respect of the Eligible Substitute Mortgage Loan during the Collection Period in
which the circumstances giving rise to such substitution occur shall not be a
part of the Trust and shall not be deposited by the Servicer in the Collection
Account. All amounts received by the Servicer during the Collection Period in
which the circumstances giving rise to such substitution occur in respect of any
Defective Mortgage Loan so removed by the Trust shall be deposited by the
Servicer in the Collection Account. Upon such substitution, the Eligible
Substitute Mortgage Loan shall be subject to the terms of this Agreement in all
respects, and the Sponsor shall be deemed (i) to have made with respect to such
Eligible Substitute Mortgage Loan as of the date of substitution, the covenants,
representations and warranties set forth in Section 2.05 and (ii) to have
certified that such Mortgage Loan is an Eligible Substitute Mortgage Loan. The
procedures applied by the Sponsor in selecting each Eligible Substitute Mortgage
Loan shall not be materially adverse to the interests of the Indenture Trustee,
the Noteholders or the Insurer.
The Servicer, promptly following the transfer of a Defective Mortgage
Loan from or to the Trust pursuant to this Section, shall amend the Mortgage
Loan Schedule and make appropriate entries in its general account records to
reflect such transfer. The Servicer shall, following such retransfer,
appropriately mark its records to indicate that it is no longer servicing such
Mortgage Loan on behalf of the Trust. The Sponsor, promptly following such
transfer, shall appropriately mark its Electronic Ledger and make appropriate
entries in its general account records to reflect such transfer.
Section 2.04. Representations and Warranties Regarding the Servicer and
the Sponsor. (a) The Servicer represents and warrants to the Indenture Trustee
and the Insurer that as of the Closing Date and as of each Subsequent Transfer
Date:
(i) The Servicer is a New York corporation, validly existing
and in good standing under the laws of the State of New York, and has
the corporate power to own its assets and to transact the business in
which it is currently engaged. The Servicer is duly qualified to do
business as a foreign corporation and is in good standing in each
jurisdiction in which the character of the business transacted by it or
any properties owned or leased by it requires such qualification and in
which the failure so to qualify
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<PAGE>
would have a material adverse effect on the business, properties,
assets, or condition (financial or other) of the Servicer;
(ii) The Servicer has the power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Servicer
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(iii) The Servicer is not required to obtain the consent of
any other party or any consent, license, approval or authorization
from, or registration or declaration with, any governmental authority,
bureau or agency in connection with the execution, delivery,
performance, validity or enforceability of this Agreement, except for
such consent, license, approval or authorization, or registration or
declaration, as shall have been obtained or filed, as the case may be,
prior to the Closing Date;
(iv) The execution, delivery and performance of this Agreement
by the Servicer will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the
Servicer or any provision of the Certificate of Incorporation or Bylaws
of the Servicer, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Servicer is a party
or by which the Servicer may be bound; and
(v) No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to
the knowledge of the Servicer threatened, against the Servicer or any
of its properties or with respect to this Agreement or the Notes.
The representations and warranties set forth in this Section 2.04(a) shall
survive the sale and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any representations and warranties which materially and
adversely affects the interests of the Noteholders or the Insurer, the person
discovering such breach shall give prompt written notice to the other parties
and to the Insurer. Within 90 days of its discovery or its receipt of notice of
breach, or, with the prior written consent of a Responsible Officer of the
Indenture Trustee and the Insurer such longer period specified in such consent,
the Servicer shall cure such breach in all material respects.
(b) The Sponsor represents and warrants to the Indenture Trustee and
the Insurer that as of the Closing Date and as of each Subsequent Transfer Date:
(i) The Sponsor is a Delaware corporation, validly existing
and in good standing under the laws of the State of Delaware, and has
the statutory power to own its assets and to transact the business in
which it is currently engaged. The Sponsor is duly qualified to do
business as a foreign limited liability company and is in good standing
in
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each jurisdiction in which the character of the business transacted by
it or any properties owned or leased by it requires such qualification
and in which the failure so to qualify would have a material adverse
effect on the business, properties, assets, or condition (financial or
other) of the Sponsor;
(ii) The Sponsor has the power and authority to make, execute,
deliver and perform this Agreement and all of the transactions
contemplated under this Agreement, and has taken all necessary
corporate action to authorize the execution, delivery and performance
of this Agreement. When executed and delivered, this Agreement will
constitute the legal, valid and binding obligation of the Sponsor
enforceable in accordance with its terms, except as enforcement of such
terms may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(iii) The Sponsor is not required to obtain the consent of any
other party or any consent, license, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or
agency in connection with the execution, delivery, performance,
validity or enforceability of this Agreement;
(iv) The execution, delivery and performance of this Agreement
by the Sponsor will not violate any provision of any existing law or
regulation or any order or decree of any court applicable to the
Sponsor or any provision of the Certificate of Incorporation or bylaws
of the Sponsor, or constitute a material breach of any mortgage,
indenture, contract or other agreement to which the Sponsor is a party
or by which the Sponsor may be bound; and
(v) No litigation or administrative proceeding of or before
any court, tribunal or governmental body is currently pending, or to
the knowledge of the Sponsor threatened, against the Sponsor or any of
its properties or with respect to this Agreement or the Notes.
The representations and warranties set forth in this Section 2.04(b) shall
survive the sale and assignment of the Mortgage Loans to the Trust. Upon
discovery of a breach of any representations and warranties which materially and
adversely affects the interests of the Noteholders or the Insurer, the person
discovering such breach shall give prompt written notice to the other parties
and to the Insurer. Within 90 days of its discovery or its receipt of notice of
breach, or, with the prior written consent of a Responsible Officer of the
Indenture Trustee and the Insurer, such longer period specified in such consent,
the Sponsor shall cure such breach in all material respects.
Section 2.05. Representations and Warranties of the Sponsor Regarding
the Mortgage Loans; Retransfer of Certain Mortgage Loans.
(a) The Sponsor hereby makes the following representations and
warranties on which the Issuer is deemed to have relied in acquiring the
Mortgage Loans and upon which the Insurer is deemed to rely in issuing the
Policy. Such representations and warranties speak as of the execution and
delivery of this Agreement and as of the Closing Date with respect to the
Initial
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Mortgage Loans and as of the related Transfer Date with respect to the
Subsequent Mortgage Loans, but shall survive the sale, transfer, and assignment
of the Mortgage Loans to the Issuer and the pledge thereof to the Indenture
Trustee pursuant to the Indenture,
(i) As of the Closing Date with respect to the Initial
Mortgage Loans and as of the related Transfer Date with respect to the
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans
and with respect to any HELOC Mortgage Loan, as of the date any
Additional Balance is created, the information set forth in the
Mortgage Loan Schedule for such Mortgage Loans is true and correct in
all material respects;
(ii) Each Mortgage Loan is being serviced by the Servicer or a
Person controlling, controlled by or under common control with the
Servicer and qualified to service mortgage loans;
(iii) The applicable Cut-Off Date Principal Balance has not
been assigned or pledged, and the Sponsor is the sole owner and holder
of such Cut-Off Date Principal Balance free and clear of any and all
liens, claims, encumbrances, participation interests, equities,
pledges, charges or security interests of any nature, and has full
right and authority, under all governmental and regulatory bodies
having jurisdiction over the ownership of the applicable Mortgage
Loans, to sell, assign or transfer the same pursuant to this Agreement;
(iv) As of the Closing Date, with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans,
the Mortgage Loans have not been assigned or pledged, and the Sponsor
is the sole owner and holder of such Mortgage Loans free and clear of
any and all liens, claims, encumbrances, participation interests,
equities, pledges, charges or security interests of any nature, and has
full right and authority, under all governmental and regulatory bodies
having jurisdiction over the ownership of the applicable Mortgage
Loans, to sell and assign the same pursuant to this Agreement;
(v) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans,
the related Mortgage is a valid and subsisting first or second lien, as
set forth on the Mortgage Loan Schedule with respect to each related
Mortgaged Property, and as of the applicable Cut-Off Date the related
Mortgaged Property is free and clear of all encumbrances and liens
having priority over the first or second lien, as applicable, of such
Mortgage except for liens for (i) real estate taxes and special
assessments not yet delinquent; (ii) any first mortgage loan secured by
such Mortgaged Property and specified on the Mortgage Loan Schedule;
(iii) covenants, conditions and restrictions, rights of way, easements
and other matters of public record as of the date of recording that are
acceptable to mortgage lending institutions generally; and (iv) other
matters to which like properties are commonly subject which do not
materially interfere with the benefits of the security intended to be
provided by such Mortgage;
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(vi) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans,
there is no valid offset, defense or counterclaim of any obligor under
any Loan Agreement or Mortgage;
(vii) To the best knowledge of the Sponsor, as of the Closing
Date with respect to the Initial Mortgage Loans and the applicable
Transfer Date with respect to any Subsequent Mortgage Loans and any
Eligible Substitute Mortgage Loans, there is no delinquent recording or
other tax or fee or assessment lien against any related Mortgaged
Property;
(viii) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans,
there is no proceeding pending or, to the best knowledge of the
Sponsor, threatened for the total or partial condemnation of the
related Mortgaged Property, and such property is free of material
damage;
(ix) To the best knowledge of the Sponsor, as of the Closing
Date with respect to the Initial Mortgage Loans and the applicable
Transfer Date with respect to any Subsequent Mortgage Loans and any
Eligible Substitute Mortgage Loans, there are no mechanics' or similar
liens or claims which have been filed for work, labor or material
affecting the related Mortgaged Property which are, or may be, liens
prior or equal to the lien of the related Mortgage, except liens which
are fully insured against by the title insurance policy referred to in
clause (xiv);
(x) No Minimum Monthly Payment is more than 89 days delinquent
(measured on a contractual basis);
(xi) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans,
for each Mortgage Loan, the related Mortgage File contains each of the
documents and instruments specified to be included therein;
(xii) The related Loan Agreement and the related Mortgage at
origination complied in all material respects with applicable state and
federal laws, including, without limitation, usury, truth-in-lending,
real estate settlement procedures, consumer credit protection, equal
credit opportunity or disclosure laws applicable to the Mortgage Loans;
(xiii) On the Closing Date with respect to the Initial
Mortgage Loans and to the extent not already included in such filing,
on the applicable Transfer Date with respect to any Subsequent Mortgage
Loans and any Eligible Substitute Mortgage Loans, the Sponsor has filed
UCC-1 financing statements with respect to such Mortgage Loans.
(xiv) Either a lender's title insurance policy or binder was
issued on the date of origination of the Mortgage Loans and each such
policy is valid and remains in full force and effect, or a title search
or guaranty of title customary in the relevant jurisdiction
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was obtained with respect to a Mortgage Loans as to which no title
insurance policy or binder was issued;
(xv) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans,
none of the Mortgaged Properties is a mobile home or a manufactured
housing unit;
(xvi) As of the Initial Cut-Off Date for the Initial Mortgage
Loans no more than (a) 0.67% of the Initial Pool I Mortgage Loans (by
Initial Pool I Balance), or (b) 3.14% of the Initial Pool II Mortgage
Loans (by Initial Pool II Balance) are secured by Mortgaged Properties
located in one United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Initial Pool
I Mortgage Loan was not in excess of 100% and the Combined
Loan-to-Value Ratio for each Initial Pool II Mortgage Loan was not in
excess of 100%;
(xviii) Each Pool I Mortgage Loan substantially conforms to
certain loan origination standards with respect to loan balances as of
the date of origination set forth by the Federal National Mortgage
Association.
(xix) No selection procedure reasonably believed by the
Sponsor to be adverse to the interests of the Noteholders or the
Insurer was utilized in selecting the Mortgage Loans;
(xx) The Sponsor has not transferred the Mortgage Loans to the
Trust with any intent to hinder, delay or defraud any of its creditors;
(xxi) The Minimum Monthly Payment with respect to any Mortgage
Loan is not less than the interest accrued at the applicable Loan Rate
on the average daily Principal Balance during the interest period
relating to the date on which such Minimum Monthly Payment is due;
(xxii) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans,
each Loan Agreement and each Mortgage Loan is an enforceable obligation
of the related Mortgagor, except as the enforceability thereof may be
limited by the bankruptcy, insolvency or similar laws affecting
creditors' rights generally;
(xxiii) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans,
there has been no default of any senior mortgage loan related to a
Mortgaged Property that has not been cured by a party other than the
Servicer;
(xxiv) The terms of each Mortgage Note and each Mortgage have
not been impaired, altered or modified in any respect, except by a
written instrument which (if
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such instrument is secured by real property) has been recorded, if
necessary, to protect the interest of the Noteholders and which has
been delivered to the Indenture Trustee. The substance of any such
alteration or modification is reflected on the related Mortgage Loan
Schedule and has been approved by the primary mortgage guaranty
insurer, if any;
(xxv) The definition of "prime rate" in each Credit Line
Agreement relating to a HELOC Mortgage Loan does not differ materially
from the definition in the form of Credit Line Agreement in Exhibit D;
(xxvi) The weighted average remaining term to maturity of the
Initial Pool I Mortgage Loans on a contractual basis as of the related
Initial Cut-Off Date is approximately 207 months and for the Initial
Pool II Mortgage Loans is approximately 209 months. On each date that
the Loan Rates relating to Initial HELOC Mortgage Loans have been
adjusted, interest rate adjustments on the Initial HELOC Mortgage Loans
were made in compliance with the related Mortgages and Credit Line
Agreement and applicable law. Over the term of each Initial HELOC
Mortgage Loan, the Loan Rate may not exceed the related Loan Rate Cap,
if any. With respect to the Initial Pool I HELOC Mortgage Loans, the
weighted average Loan Rate Cap is approximately 18.001%. With respect
to the Initial Pool II HELOC Mortgage Loans, the weighted average Loan
Rate Cap is approximately 18.000%. With respect to the Initial Pool I
HELOC Mortgage Loans, the margins range between 0.00% and 6.25% and the
weighted average margin is approximately 3.23% as of the related
Initial Cut-Off Date. With respect to the Initial Pool II HELOC
Mortgage Loans, the margins range between 0.00% and 6.00% and the
weighted average margin is approximately 3.00% as of the related
Initial Cut-Off Date. The Loan Rates on the Initial Pool I Mortgage
Loans range between 5.625% and 15.500%, the Loan Rates on the Initial
Pool II Mortgage Loans range between 5.875% and 14.500% and the
weighted average Loan Rate is approximately 7.084% for Pool I and
6.451% for Pool II;
(xxvii) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans,
each Mortgaged Property consists of a single parcel of real property
with a one-to-four unit single family residence erected thereon, or an
individual condominium unit, planned unit development unit or
townhouse;
(xxviii) No more than 30.73% (by Initial Pool I Balance) of
the Initial Pool I Mortgage Loans are secured by real property improved
by individual condominium units, planned development units or
two-to-four family residences erected thereon, and approximately 69.27%
(by Initial Pool I Balance) of the Initial Pool I Mortgage Loans are
secured by real property with a one-family residence erected thereon;
No more than 21.17% (by Initial Pool II Balance) of the
Initial Pool II Mortgage Loans are secured by real property improved by
individual condominium units, planned development units or two-to-four
family residences erected thereon, and approximately 78.83% (by Initial
Pool II Balance) of the Initial Pool II Mortgage Loans are secured by
real property with a one-family residence erected thereon;
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(xxix) Each Mortgage Note evidencing a Closed End Mortgage
Loan is comprised of one original promissory note and each such
promissory note constitutes an "instrument" for purposes of Section
9-105(1)(i) of the UCC;
(xxx) The Credit Limits on the Initial Pool I HELOC Mortgage
Loans range between $10,000 and $500,000 with an average of
approximately $52,380. The Credit Limits on the Initial Pool II HELOC
Mortgage Loans range between $15,000 and $500,000 with an average of
approximately $127,774. The Principal Balances on the Initial Pool I
HELOC Mortgage Loans range between $0 and $351,688 with an average of
approximately $37,582. The Principal Balances on the Initial Pool II
HELOC Mortgage Loans range between $0 and $500,000 with an average of
approximately $110,214. The Principal Balances on the Initial Pool I
Closed End Mortgage Loans range between $10,000 and $112,500 with an
average of approximately $37,791. The average Credit Limit Utilization
Rate (weighted by credit line) of the Initial Pool I HELOC Mortgage
Loans is approximately 88.93% and of the Initial Pool II HELOC Mortgage
Loans is approximately 93.64%;
(xxxi) 100% of the Initial Mortgage Loans are second liens,
and either (A) no consent for each Mortgage Loan was required by the
holder of the related senior lien prior to the making of such Mortgage
Loan or (B) such consent has been obtained and is contained in the
related Mortgage File;
(xxxii) This Agreement constitutes a valid transfer and
assignment to the Trust of all right, title and interest of the Sponsor
in and to the Cut-Off Date Principal Balances with respect to the
applicable Mortgage Loans, all monies due or to become due with respect
thereto and all proceeds of such Cut-Off Date Principal Balances with
respect to the Mortgage Loans and such funds as are from time to time
deposited in the Collection Account (excluding any investment earnings
thereon) and all other property specified in the definition of "Trust"
as being part of the corpus of the Trust conveyed to the Trust, and
upon payment for the Additional Balances, will constitute a valid
transfer and assignment to the Indenture Trustee of all right, title
and interest of the Sponsor in and to the Additional Balances, all
monies due or to become due with respect thereto, and all proceeds of
such Additional Balances and all other property specified in the
definition of "Trust" relating to the Additional Balances;
(xxxiii) No Mortgagor is insolvent or bankrupt as of the
Closing Date with respect to the Initial Mortgage Loans and the
applicable Transfer Date with respect to any Subsequent Mortgage Loans
and any Eligible Substitute Mortgage Loans;
(xxxiv) The proceeds of each Closed End Mortgage Loan have
been fully disbursed, and there is no obligation on the part of the
mortgagee to make future advances thereunder. Any and all requirements
as to completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing or recording
such Closed End Mortgage Loans were paid;
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(xxxv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of
the benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by trustee's sale and (B) otherwise by
judicial foreclosure;
(xxxvi) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loan,
there is no default, breach, violation or event of acceleration
existing under any Mortgage or the related Mortgage Note and no event
which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a default, breach, violation
or event of acceleration; and the Sponsor has not waived any default,
breach, violation or event of acceleration;
(xxxvii) To the best knowledge of the Sponsor, all parties to
the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have
been duly and properly executed by such parties;
(xxxviii) As of the Initial Cut-Off Date no more than 0.32% of
the Principal Balance of the Initial Pool I Mortgage Loans nor more
than 0.00% of the Principal Balance of the Initial Pool II Mortgage
Loans represents Mortgage Loans with respect to which the related
Mortgagor had a Credit Score of 600 or less at the time of origination
or whose Credit Score was unavailable.
(xxxix) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan, no
Mortgagor has been released, in whole or in part, except in connection
with an assumption agreement which has been approved by the applicable
title insurer (to the extent required by such title insurer) and which
is part of the Mortgage File delivered to the Indenture Trustee;
(xl) At the time of origination of each Mortgage Loan, the
related prior lien was not more than 30 days delinquent;
(xli) All required inspections, licenses and certificates with
respect to the use and occupancy of all occupied portions of all
property securing the Mortgages have been made, obtained or issued, as
applicable;
(xlii) With respect to each Mortgage Loan, the related prior
lien does not provide for negative amortization;
(xliii) With respect to each Mortgage Loan, the maturity date
of the Mortgage Loan is prior to the maturity date of the related prior
lien if such prior lien provides for a balloon payment;
(xliv) Each Initial Pool I Mortgage Loan is secured by a
property having an appraised value as of origination of $3,600,000 or
less and each Initial Pool II Mortgage
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Loan is secured by a property having an appraised value as of
origination of $6,000,000 or less;
(xlv) With respect to each Mortgage Loan, the improvements
upon each Mortgaged Property are covered by a valid and existing hazard
insurance policy with a carrier generally acceptable to the Servicer
that provides for fire and extended coverage representing coverage not
less than (a) the Credit Limit of such HELOC Mortgage Loan or (b) the
Cut-Off Date Principal Balance of such Closed End Mortgage Loan or (c)
the maximum insurable value of the Mortgaged Property;
(xlvi) Each Subsequent Mortgage Loan was or will be originated
in accordance with the same underwriting standards that were used to
originate the Initial Mortgage Loans.
With respect to the representations and warranties set forth in this Section
2.05 that are made to the best of the Sponsor's knowledge or as to which the
Sponsor has no knowledge, if it is discovered by the Sponsor, the Servicer, the
Insurer or a Responsible Officer of the Indenture Trustee that the substance of
such representation and warranty is inaccurate and such inaccuracy materially
and adversely affects the value of the related Mortgage Loan then,
notwithstanding the Sponsor's lack of knowledge with respect to the substance of
such representation and warranty being inaccurate at the time the representation
or warranty was made, such inaccuracy shall be deemed a breach of the applicable
representation or warranty.
(b) It is understood and agreed that the representations and warranties
set forth in this Section 2.05 shall survive delivery of the respective Mortgage
Files to the Indenture Trustee pursuant to Section 2.01 and the termination of
the rights and obligations of the Servicer pursuant to Section 5.04 or 6.02.
Upon discovery by the Sponsor, the Servicer, the Insurer or a Responsible
Officer of the Indenture Trustee of a breach of any of the foregoing
representations and warranties, without regard to any limitation set forth
therein concerning the knowledge of the Sponsor as to the facts stated therein,
which materially and adversely affects the interests of the Trust or the
Noteholders or the Insurer in the related Mortgage Loans, the party discovering
such breach shall give prompt written notice to the other parties and the
Insurer. Within 90 days of its discovery or its receipt of notice of such
breach, the Sponsor shall use all reasonable efforts to cure such breach in all
material respects or shall, not later than the Business Day next preceding the
Payment Date in the month following the Collection Period in which any such cure
period expired (or such later date that is acceptable to the Indenture Trustee
and the Insurer as evidenced by their written consents), either (a) accept a
transfer of such Mortgage Loan from the Trust or (b) substitute an Eligible
Substitute Mortgage Loan, each in the same manner and subject to the same
conditions as set forth in Section 2.03; provided, however, that the cure for
any breach of a representation and warranty relating to the characteristics of
the Mortgage Loans in the aggregate shall be a repurchase of or substitution for
only the Mortgage Loans necessary to cause such characteristics to be in
compliance with the related representation and warranty. Upon accepting such
transfer and making any required deposit into the Collection Account or
substitution of an Eligible Substitute Mortgage Loans, as the case may be, the
Sponsor shall be entitled to receive an instrument of assignment or transfer
from the Indenture Trustee to the same extent as set forth in Section 2.03 with
respect to the transfer of Mortgage Loans under that Section.
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It is understood and agreed that the obligation of the Sponsor to
accept a retransfer of a Mortgage Loan as to which a breach has occurred and is
continuing and to make any required deposit in the Collection Account or to
substitute an Eligible Substitute Mortgage Loan, as the case may be, shall
constitute the sole remedy against the Sponsor respecting such breach available
to Noteholders, the Indenture Trustee on behalf of Noteholders and the Insurer;
provided, however, that the Sponsor shall defend and indemnify the Indenture
Trustee, the Insurer and the Noteholders against all reasonable costs and
expenses, and all losses, damages, claims and liabilities, including reasonable
fees and expenses of counsel and the amount of any settlement entered into with
the consent of the Sponsor (such consent not to be unreasonably withheld), which
may be asserted against or incurred by any of them as a result of any
third-party action arising out of any breach of any such representation and
warranty. Notwithstanding the foregoing, with regard to any breach of the
representation and warranty set forth in Section 2.05(a)(xxix), the Sponsor
shall pay to the Trust the sum of (i) the amount of the related Principal
Balances, plus unpaid accrued interest on each such Principal Balance at the
applicable Loan Rate to the date of payment, (ii) the amount of any loss
suffered by the Noteholders or the Insurer with respect to the affected Mortgage
Loans and (iii) all amounts owing to the Insurer pursuant to the Insurance
Agreement.
Section 2.06. Covenants of the Sponsor. The Sponsor hereby covenants
that:
(a) Security Interests. The Sponsor will not sell, pledge, assign or
transfer to any other Person, or grant, create, incur, assume or suffer to exist
any Lien on any Mortgage Loans, whether now existing or hereafter created, or
any interest therein; the Sponsor will notify the Indenture Trustee and the
Insurer of the existence of any Lien on any Mortgage Loans immediately upon
discovery thereof; and the Sponsor will defend the Trust's right, title and
interest (including the Trust's security interest) in, to and under the Mortgage
Loans, whether now existing or hereafter created, against all claims of third
parties claiming through or under the Sponsor; provided, however, that nothing
in this Section 2.06(a) shall prevent or be deemed to prohibit the Sponsor from
suffering to exist upon any of the Mortgage Loans any Liens for municipal or
other local taxes and other governmental charges if such taxes or governmental
charges shall not at the time be due and payable or if the Sponsor shall
currently be contesting the validity thereof in good faith by appropriate
proceedings and shall have set aside on its books adequate reserves with respect
thereto.
(b) UCC-1 Financing Statements. On the Closing Date with respect to the
Initial Mortgage Loans and, to the extent not already included in such filing,
on the applicable Transfer Date with respect to any Subsequent Mortgage Loans
and any Eligible Substitute Mortgage Loans, the Sponsor will file UCC-1
financing statements with respect to such Mortgage Loans.
(c) Negative Pledge. The Sponsor hereby agrees not to transfer, assign,
exchange, pledge, finance, hypothecate, grant a security interest in or
otherwise convey the Certificates except in accordance with Sections 5.05 and
6.02 hereof and in accordance with the Insurance Agreement and the Trust
Agreement.
(d) Downgrading. The Sponsor will not engage in any activity which
would result in a downgrading or withdrawal of the ratings on the Notes without
regard to the effect of the Policy.
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(e) Amendment to Certificate of Incorporation. The Sponsor will not
amend its Certificate of Incorporation without prior written notice to the
Indenture Trustee and the Rating Agencies and the prior written consent of the
Insurer which consent shall not be unreasonably withheld.
(f) Principal Place of Business. The Sponsor's principal place of
business is in California, and the Sponsor will not change its principal place
of business without prior written notice to the Indenture Trustee, the Rating
Agencies and to the Insurer.
Section 2.07. Retransfers of Mortgage Loans at Election of Sponsor.
Subject to the conditions set forth below and Section 8.2 of the Indenture, the
Sponsor may, but shall not be obligated to, require the retransfer of Mortgage
Loans from the Trust to the Sponsor as of the close of business on a Payment
Date (each, a "Retransfer Date"). On the fifth Business Day (the "Retransfer
Notice Date") prior to the Retransfer Date designated in such notice, the
Sponsor shall give the Indenture Trustee, the Insurer and the Servicer a notice
of the proposed retransfer that contains a list of the Mortgage Loans to be
retransferred. Such retransfers of Mortgage Loans in Pool I or Pool II shall be
permitted upon satisfaction of the following conditions:
(i) The applicable Rapid Amortization Period shall not have
commenced;
(ii) On the Retransfer Date, the related Overcollateralization
Amount (after giving effect to the removal from the Trust of the
Mortgage Loans proposed to be retransferred) is at least equal to the
related Specified Overcollateralization Amount;
(iii) The transfer of such Mortgage Loans on any Retransfer
Date during the related Managed Amortization Period shall not, in the
reasonable belief of the Sponsor, cause a Rapid Amortization Event with
respect to the related Class of Notes to occur or an event which with
notice or lapse of time or both would constitute such a Rapid
Amortization Event;
(iv) On or before the Retransfer Date, the Sponsor shall have
delivered to the Indenture Trustee a revised Mortgage Loan Schedule,
reflecting the proposed transfer and the Retransfer Date, and the
Servicer shall have marked the Electronic Ledger to show that the
Mortgage Loans retransferred to the Sponsor are no longer owned by the
Trust;
(v) The Sponsor shall represent and warrant that no selection
procedures reasonably believed by the Sponsor to be adverse to the
interests of the Noteholders or the Insurer were utilized in selecting
the Mortgage Loans to be removed from the Trust;
(vi) In connection with each such retransfer of Mortgage Loans
pursuant to this Section, each Rating Agency shall have received on or
prior to the related Retransfer Notice Date notice of such proposed
retransfer of Mortgage Loans and, prior to the Retransfer Date, shall
have notified the Indenture Trustee and the Insurer in writing that
such retransfer of Mortgage Loans would not result in a reduction or
withdrawal of its then current ratings of the Class A-1 Notes or of the
Class A-2 Notes, in either case without regard to the Policy; and
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(vii) The Sponsor shall have delivered to the Indenture
Trustee and the Insurer an Officer's Certificate certifying that the
items set forth in subparagraphs (i) through (vi), inclusive, have been
performed or are true and correct, as the case may be. The Indenture
Trustee may conclusively rely on such Officer's Certificate, shall have
no duty to make inquiries with regard to the matters set forth therein
and shall incur no liability in so relying.
Upon receiving the requisite information from the Sponsor, the Servicer
shall perform in a timely manner those acts required of it, as specified above.
Upon satisfaction of the above conditions, on the Retransfer Date the Indenture
Trustee shall deliver, or cause to be delivered, to the Sponsor the Mortgage
File for each Mortgage Loan being so transferred, and the Indenture Trustee
shall execute and deliver to the Sponsor such other documents prepared by the
Sponsor as shall be reasonably necessary to transfer such Mortgage Loans to the
Sponsor. Any such retransfer of the Trust's right, title and interest in and to
Mortgage Loans shall be without recourse, representation or warranty by or of
the Indenture Trustee or the Trust to the Sponsor.
Section 2.08. Execution and Authentication of Notes. The Indenture
Trustee, on behalf of the Trust, has caused to be executed, authenticated and
delivered to or upon the order of the Sponsor, in exchange for the Trust,
concurrently with the sale, assignment and conveyance to the Indenture Trustee
of the Trust, Notes representing indebtedness of the Trust in authorized
denominations and the Certificates, evidencing the ownership of the Trust.
Section 2.09. Tax Treatment. It is the intention of the Sponsor and the
Certificateholders that the Notes will be indebtedness of the Sponsor for
federal, state and local income and franchise tax purposes and for purposes of
any other tax imposed on or measured by income. The Sponsor, the Indenture
Trustee and each Noteholder (or Note Owner) by acceptance of its Note (or, in
the case of a Note Owner, by virtue of such Note Owner's acquisition of a
beneficial interest therein) agrees to treat the Notes (or beneficial interest
therein), for purposes of federal, state and local income or franchise taxes and
any other tax imposed on or measured by income, as indebtedness of the Sponsor
secured by the assets of the Trust and to report the transactions contemplated
by this Agreement on all applicable tax returns in a manner consistent with such
treatment. Each Noteholder agrees that it will cause any Note Owner acquiring an
interest in a Note through it to comply with this Agreement as to treatment of
the Notes as indebtedness for federal, state and local income and franchise tax
purposes and for purposes of any other tax imposed on or measured by income. The
Indenture Trustee will prepare and file all tax reports required hereunder
consistent with this Agreement except as may be required by or provided in
Section 3.15.
Section 2.10. Conveyance of the Subsequent Mortgage Loans.
(a) Subject to the satisfaction of the conditions set forth in Section
2.01 and paragraph (b) below, in consideration of the Indenture Trustee's
delivery on a Subsequent Transfer Date to or upon the order of the Sponsor of
amounts in the Pre-Funding Account equal to the aggregate principal balance of
the Subsequent Mortgage Loans the Sponsor shall, to the extent of the
availability thereof, on the related Subsequent Transfer Date transfer, assign,
set over and otherwise convey to the Trust without recourse (subject to Sections
2.03 and 2.05) all of its right, title and interest in and to such Subsequent
Mortgage Loans and all Collections in
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respect thereof received after the Cut-Off Date for the Subsequent Mortgage
Loans (excluding payments in respect of accrued interest due prior to the
related Subsequent Transfer Date) or, with respect to any Additional Balances
with respect thereto, on or after the date of transfer to the Trust. Future
advances made to a Mortgagor under a Loan Agreement relating to a Subsequent
Mortgage Loans shall be part of the related Principal Balance and transferred to
the Trust pursuant to this Section 2.10, and, therefore, part of the Trust
Property upon the sale thereof to the Sponsor under the Purchase Agreement.
On each Subsequent Transfer Date, the Sponsor shall deliver to the
Indenture Trustee a letter which: (i) states the amount to be withdrawn from the
Pre-Funding Account on such date to purchase Subsequent Mortgage Loans for
addition to Pool I; (ii) states the amount to be withdrawn from the Pre-Funding
Account on such date to purchase Subsequent Mortgage Loans for addition to Pool
II; (iii) lists each Subsequent Mortgage Loan being conveyed to the Trust on
such Subsequent Transfer Date (including a description of the Pool into which
each such Subsequent Mortgage Loan is being conveyed); (iv) acknowledges that
each of the requirements listed in Section 2.10(b) of this Agreement have been
satisfied; (v) attaches as exhibits thereto each of the documents described in
Sections 2.10(b)(i), (v), (vii) and (viii) and; (vi) acknowledges that the
Sponsor has conveyed its right, title and interest in and to each Subsequent
Mortgage Loans and to the corresponding Related Documents and certain other
rights to the Indenture Trustee pursuant to this Agreement, and the Indenture
Trustee shall hold such documents hereunder for the benefit of the Noteholders.
The Indenture Trustee shall acknowledge its receipt of such letter by signing it
and returning a signed copy to the Sponsor, the Servicer, the Issuer, the
Insurer and each of the Rating Agencies.
(b) The obligation of the Indenture Trustee to accept the transfer of
the Subsequent Mortgage Loans and the other property and rights related thereto
described in paragraph (a) above is subject to the satisfaction of each of the
following conditions on or prior to the Subsequent Transfer Date:
(i) the Indenture Trustee shall have been provided with a
letter from the Insurer consenting to such transfer of the Subsequent
Mortgage Loans (which consent shall not be unreasonably withheld or
delayed);
(ii) the Indenture Trustee shall have been provided with a
Mortgage Loan Schedule, listing the Subsequent Mortgage Loans delivered
or to be delivered on such Subsequent Transfer Date;
(iii) the Sponsor shall have deposited in the Collection
Account all Collections in respect of such Subsequent Mortgage Loans
received after the Cut-Off Date (excluding payments in respect of
accrued interest due prior to the related Transfer Date) for the
Subsequent Mortgage Loans;
(iv) the representations and warranties of the Sponsor in
Section 2.05 hereof, to the extent such representations and warranties
do not pertain exclusively to the Initial Mortgage Loans, are true and
correct with respect to the Subsequent Mortgage Loans as of the related
Subsequent Transfer Date;
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(v) the Servicer shall acknowledge in writing that it has
delivered the related Mortgage Files to the Indenture Trustee and
complied with all other requirements with respect to the assignment of
the related Mortgages specified therein;
(vi) the Servicer shall represent and warrant that no
selection procedures reasonably believed by the Servicer to be adverse
to the interests of the Noteholders or the Insurer were utilized in
selecting the Subsequent Mortgage Loans;
(vii) the Sponsor shall have delivered to the Indenture
Trustee an Officer's Certificate confirming the satisfaction of each
condition precedent specified in this paragraph (b) and paragraphs (c)
and (d) below; and
(viii) the Sponsor shall have acknowledged in writing that,
with respect to either Pool, neither (x) the aggregate amount withdrawn
from the Pre-Funding Account to purchase Subsequent Mortgage Loans for
addition to such Pool on that all prior Subsequent Transfer Dates nor
(y) the aggregate Principal Balances of the Subsequent Mortgage Loans
transferred to the Trust for assignment to such Pool on that and all
prior Subsequent Transfer Dates exceeds the Original Class A-1
Pre-Funded Amount or the Original Class A-2 Pre-Funded Amount, as
applicable.
(c) The obligations of the Issuer to accept the assignment of a
Subsequent Mortgage Loan on any Subsequent Transfer Date are subject to the
following additional requirements, any of which may be waived or modified in any
respect by the Insurer (with consent of the Rating Agencies) by a written
instrument executed by the Insurer. The obligation of the Trust to purchase all
of the Subsequent Mortgage Loans for addition to either Pool (the "Subsequent
Mortgage Loans") in the Trust is subject to the following additional aggregate
requirements: (i) the aggregate weighted average Margin for the Subsequent
Mortgage Loans is at least 3.10%; (ii) the aggregate weighted average Combined
Loan-to-Value Ratio of all of the Subsequent Mortgage Loans is not more than
84.00%; (iii) the Subsequent Mortgage Loans shall maintain a weighted average
Credit Score of at least 691; (iv) no Subsequent Mortgage Loans may be 60 or
more days delinquent; and (v) no more than 1.00% of the Subsequent Mortgage
Loans shall be 30-59 days delinquent.
(d) On the last Payment Date of the Pre-Funding Period, the Sponsor
shall have provided the Indenture Trustee, the Rating Agencies and the Insurer
with an Opinion of Counsel to the effect that the transfers of the Subsequent
Mortgage Loans during the Pre-Funding Period constitute a sale of the Principal
Balances of the Subsequent Mortgage Loans to the Sponsor and a sale of or grant
of a security interest in the Subsequent Mortgage Loans to the Indenture
Trustee; provided, however, that in the event of a change of law during the
Pre-Funding Period that materially affects the method of perfecting the security
interest in the Subsequent Mortgage Loans, the Sponsor shall (i) provide the
Indenture Trustee, the Rating Agencies and the Insurer with an Opinion of
Counsel to the effect that such transfer constitutes a sale of the Principal
Balances of the Subsequent Mortgage Loans to the Sponsor and a sale of or grant
of a security interest in the Subsequent Mortgage Loans to the Indenture
Trustee, and (ii) take such action as is necessary to perfect the interests of
the Trust in the Subsequent Mortgage Loans.
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ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01. The Servicer.
(a) The Servicer is hereby authorized to act as agent for the Trust and
in such capacity shall manage, service, administer and make collections on the
Mortgage Loans and perform the other actions under this Agreement. The Servicer
shall service and administer the Mortgage Loans in a manner consistent with the
terms of this Agreement and with general industry practice and shall have full
power and authority, acting alone or through a subservicer, to do any and all
things in connection with such servicing and administration which it may deem
necessary or desirable, it being understood, however, that the Servicer shall at
all times remain responsible to the Indenture Trustee, the Securityholders and
the Insurer for the performance of its duties and obligations hereunder in
accordance with the terms hereof. Any amounts received by any subservicer in
respect of a Mortgage Loan shall be deemed to have been received by the Servicer
whether or not actually received by it. Without limiting the generality of the
foregoing, the Servicer shall continue, and is hereby authorized and empowered
by the Trust, to execute and deliver, on behalf of the Trust, any and all
instruments of satisfaction or cancellation, or of partial or full release or
discharge and all other comparable instruments, with respect to the Mortgage
Loans and with respect to the Mortgaged Properties and to make deposits to and
withdrawals from the Collection Account. The Indenture Trustee and the Owner
Trustee shall, upon the written request of a Servicing Officer, furnish the
Servicer with any powers of attorney and other documents necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. The Servicer in such capacity may also consent to the placing
of a lien senior to that of any Mortgage on the related Mortgaged Property,
provided that
(i) such Mortgage succeeded to a first lien position after the
related Mortgage Loan was conveyed to the Trust and, immediately
following the placement of such senior lien, such Mortgage is in a
second lien position and the outstanding principal amount of the
mortgage loan secured by such subsequent senior lien is no greater than
the outstanding principal amount of the senior mortgage loan secured by
the Mortgaged Property as of the date the related Mortgage Loan was
originated; or
(ii) the Mortgage relating to such Mortgage Loan was in a
second lien position as of the Cut-Off Date and the new senior lien
secures a mortgage loan that refinances an existing first mortgage loan
and the outstanding principal amount of the replacement first mortgage
loan immediately following such refinancing is not greater than the
outstanding principal amount of such existing first mortgage loan at
the date of origination of such Mortgage Loan;
provided, further, that such senior lien does not secure a note that provides
for negative amortization.
The Servicer may also, without prior approval from the Rating Agencies
or the Insurer, increase the Credit Limits on HELOC Mortgage Loans provided that
(i) new appraisals are
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obtained and the Combined Loan-to-Value Ratios of the HELOC Mortgage Loans after
giving effect to such increase are less than or equal to the Combined
Loan-to-Value Ratios of the Mortgage Loans as of the Cut-Off Date and (ii) such
increases are consistent with the Servicer's credit and collection policies. No
material change or departure from the Servicer's credit and collection policies
with respect to any Mortgage Loans as in effect as of the Closing Date shall be
permitted without the prior written consent of the Insurer.
In addition, the Servicer may agree to changes in the terms of a
Mortgage Loan at the request of the Mortgagor; provided that (i) such changes do
not materially and adversely affect the interests of Securityholders or the
Insurer, (ii) such changes are consistent with prudent and customary business
practice as evidenced by a certificate signed by a Servicing Officer delivered
to the Indenture Trustee and the Insurer and (iii) the Rating Agencies are
promptly notified of the changes.
In addition to the foregoing, the Servicer may solicit Mortgagors to
change any other terms of the related Mortgage Loans; provided that such changes
(i) do not materially and adversely affect the interest of Securityholders or
the Insurer and (ii) are consistent with prudent and customary business practice
as evidenced by a certificate signed by a Servicing Officer delivered to the
Indenture Trustee and the Insurer. Nothing herein shall limit the right of the
Servicer to solicit Mortgagors with respect to new loans (including mortgage
loans) that are not Mortgage Loans.
The relationship of the Servicer (and of any successor to the Servicer
as servicer under this Agreement) to the Indenture Trustee under this Agreement
is intended by the parties to be that of an independent contractor and not that
of a joint venturer, partner or agent.
(b) In the event that the rights, duties and obligations of the
Servicer are terminated hereunder, any successor to the Servicer in its sole
discretion may, to the extent permitted by applicable law, terminate the
existing subservicer arrangements with any subservicer or assume the terminated
Servicer's rights under such subservicing arrangements which termination or
assumption will not violate the terms of such arrangements.
Section 3.02. Collection of Certain Mortgage Loan Payments
(a) Collection of Certain Mortgage Loan Payments. Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Mortgage Loans, and shall, to the extent such procedures shall
be consistent with this Agreement, follow such collection procedures as it
follows with respect to home equity loans in its servicing portfolio comparable
to the Mortgage Loans. Consistent with the foregoing, and without limiting the
generality of the foregoing, the Servicer may in its discretion (i) waive any
late payment charge or any assumption fees or other fees which may be collected
in the ordinary course of servicing such Mortgage Loans and (ii) arrange with a
Mortgagor a schedule for the payment of interest due and unpaid; provided that
such arrangement is consistent with the Servicer's policies with respect to the
Mortgage Loans it owns or services; provided, further, that notwithstanding such
arrangement such Mortgage Loans will be included in the information regarding
delinquent Mortgage Loans set forth in the Servicing Certificate and monthly
statement to Noteholders pursuant to Section 4.01.
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(b) The Servicer shall on the Closing Date deposit into the Collection
Account any amounts representing payments on, and any collections in respect of,
the Initial Mortgage Loans received after the related Initial Cut-Off Date and
prior to the Closing Date (exclusive of payments in respect of accrued interest
due on or prior to such Cut-Off Date) and thereafter the Servicer, or the
Sponsor, as the case may be, shall deposit into the Collection Account within
two Business Days following receipt thereof the following payments and
collections received or made by it (without duplication):
(i) all collections on and in respect of the Mortgage Loans;
(ii) the amounts, if any, deposited to the Collection Account
pursuant to Section 3.04;
(iii) Net Liquidation Proceeds;
(iv) Insurance Proceeds (including, for this purpose, any
amount required to be credited by the Servicer pursuant to the last
sentence of Section 3.04 and excluding the portion thereof, if any,
that has been applied to the restoration or repair of the related
Mortgaged Property or released to the related Mortgagor in accordance
with the normal servicing procedures of the Servicer);
(v) any amounts required to be deposited therein pursuant to
Section 7.01;
(vi) amounts transferred from the Pre-Funding Account pursuant
to Section 8.9(e) of the Indenture;
(vii) any amounts drawn under the Policy pursuant to Section
4.02;
provided, however, that with respect to each Collection Period, the Servicer
shall be permitted to retain from payments in respect of interest on the
Mortgage Loans, the Servicing Fee for such Collection Period. The foregoing
requirements respecting deposits to the Collection Account are exclusive, it
being understood that, without limiting the generality of the foregoing, the
Servicer need not deposit in the Collection Account amounts representing
Foreclosure Profits, fees (including annual fees) or late charge penalties
payable by Mortgagors, or amounts received by the Servicer for the accounts of
Mortgagors for application towards the payment of taxes, insurance premiums,
assessments, excess pay off amounts and similar items. The Servicer shall remit
all Foreclosure Profits to the Sponsor.
The Indenture Trustee shall hold amounts deposited in the Collection
Account as trustee for the Noteholders and for the Insurer. The Servicer shall
notify the Indenture Trustee and the Insurer in writing on each Determination
Date of the amount of payments and collections in the Collection Account
allocable to Interest Collections and Principal Collections for the related
Payment Date. Following such notification, the Servicer shall be entitled to
withdraw from the Collection Account and retain any amounts that constitute
income and gain realized from the investment of such payments and collections.
At the direction of the Servicer, the Indenture Trustee shall invest
funds in the Collection Account in Eligible Investments. All income and gain
realized from any investment in Eligible
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Investments of funds in the Collection Account shall be for the benefit of the
Servicer and shall be subject to its withdrawal from time to time. The amount of
any losses incurred in respect of the principal amount of any such investments
shall be deposited in the Collection Account by the Servicer out of its own
funds immediately as realized.
Section 3.03. Withdrawals from the Collection Account. From time to
time, withdrawals may be made from the Collection Account by the Servicer for
the following purposes:
(i) If not received by the Servicer pursuant to Section
3.02(b), to the Servicer as payment for its Servicing Fee pursuant to
Section 3.08;
(ii) To pay to the Servicer amounts on deposit in the
Collection Account that are not to be included in the distributions and
payments pursuant to Section 8.6 of the Indenture to the extent
provided by the second to the last and the last paragraph of Section
3.02(b);
(iii) To make or to permit the Paying Agent to make
distributions and payments pursuant to Section 8.6 of the Indenture;
(iv) Prior to the Collection Period preceding the Rapid
Amortization Commencement Date, to pay to the Sponsor the amount of any
Additional Balances as and when created during the related Collection
Period; provided, that the aggregate amount so paid to the Sponsor in
respect of Additional Balances at any time during any Collection Period
shall not exceed the amount of Principal Collections theretofore
received for such Collection Period;
(v) To pay to the Servicer any Liquidation Expenses not
reimbursed prior to the deposit of Net Liquidation Proceeds to the
Collection Account;
(vi) Upon termination of the Trust, to make any payments
required by Section 7.01.
If the Servicer deposits in the Collection Account any amount not
required to be deposited therein or any amount in respect of payments by
Mortgagors made by checks subsequently returned for insufficient funds or other
reason for non-payment it may at any time withdraw such amount from the
Collection Account, and any such amounts shall not be included in the amounts to
be deposited in the Collection Account pursuant to Section 3.02(b), any
provision herein to the contrary notwithstanding.
Section 3.04. Maintenance of Hazard Insurance; Property Protection
Expenses. The Servicer shall cause to be maintained for each Mortgage Loan
hazard insurance naming the Servicer or the related subservicer as loss payee
thereunder providing extended coverage in an amount which is at
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least equal to the lesser of (i) the maximum insurable value of the improvements
securing such Mortgage Loan from time to time or (ii) the combined principal
balance owing on such Mortgage Loan and any mortgage loan senior to such
Mortgage Loan from time to time. The Servicer shall also maintain on property
acquired upon foreclosure, or by deed in lieu of foreclosure, hazard insurance
with extended coverage in an amount which is at least equal to the lesser of (i)
the maximum insurable value from time to time of the improvements which are a
part of such property or (ii) the combined principal balance owing on such
Mortgage Loan and any mortgage loan senior to such Mortgage Loan at the time of
such foreclosure or deed in lieu of foreclosure plus accrued interest and the
good-faith estimate of the Servicer of related Liquidation Expenses to be
incurred in connection therewith. Amounts collected by the Servicer under any
such policies shall be deposited in the Collection Account to the extent called
for by Section 3.02. In cases in which any Mortgaged Property is located in a
federally designated flood area, the hazard insurance to be maintained for the
related Mortgage Loan shall include flood insurance. All such flood insurance
shall be in such amounts as are required under applicable guidelines of the
Federal Flood Emergency Act. The Servicer shall be under no obligation to
require that any Mortgagor maintain earthquake or other additional insurance and
shall be under no obligation itself to maintain any such additional insurance on
property acquired in respect of a Mortgage Loan, other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. If the Servicer shall obtain and maintain a
blanket policy consistent with prudent industry standards insuring against
hazard losses on all of the Mortgage Loans in an aggregate amount prudent under
industry standards, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.04 and if there
shall have been a loss which would have been covered by such policy, deposit in
the Collection Account, as the case may be, the amount not otherwise payable
under the blanket policy because of any deductible clause.
Section 3.05. Assumption and Modification Agreements. In any case in
which a Mortgaged Property has been or is about to be conveyed by the Mortgagor,
the Servicer shall exercise its right to accelerate the maturity of such
Mortgage Loan consistent with the then current practice of the Servicer and
without regard to the inclusion of such Mortgage Loan in the Trust. If it elects
not to enforce its right to accelerate or if it is prevented from doing so by
applicable law, the Servicer (so long as such action conforms with the
underwriting standards generally acceptable in the industry at the time for new
origination) is authorized to take or enter into an assumption and modification
agreement from or with the Person to whom such Mortgaged Property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Loan Agreement and, to the extent permitted by applicable law, the Mortgagor
remains liable thereon. The Servicer shall notify the Indenture Trustee that any
assumption and modification agreement has been completed by delivering to the
Indenture Trustee an Officer's Certificate signed by a Servicing Officer
certifying that such agreement is in compliance with this Section 3.05 and by
forwarding to the Indenture Trustee the original copy of such assumption and
modification agreement. Any such assumption and modification agreement shall,
for all purposes, be considered a part of the related Mortgage File to the same
extent as all other documents and instruments constituting a part thereof. No
change in the terms of the related Loan Agreement may be made by the Servicer in
connection with any such assumption to the extent that such change would not be
permitted to be made in respect of the original Loan Agreement pursuant to the
fourth paragraph of Section 3.01(a). Any fee collected by the Servicer for
entering into any such agreement will be retained by the Servicer as additional
servicing compensation.
Section 3.06. Realization Upon Defaulted Mortgage Loans; Repurchase of
Certain Mortgage Loans. The Servicer shall foreclose upon or otherwise
comparably convert to ownership Mortgaged Properties securing such of the
Mortgage Loans as come into and continue
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in default when, in the opinion of the Servicer based upon the practices and
procedures referred to in the following sentence, no satisfactory arrangements
can be made for collection of delinquent payments pursuant to Section 3.02;
provided, that if the Servicer has actual knowledge or reasonably believes that
any Mortgaged Property is affected by hazardous or toxic wastes or substances
and that the acquisition of such Mortgaged Property would not be commercially
reasonable, then the Servicer will not cause the Trust to acquire title to such
Mortgaged Property in a foreclosure or similar proceeding. In connection with
such foreclosure or other conversion, the Servicer shall follow such practices
(including, in the case of any default on a related senior mortgage loan, the
advancing of funds to correct such default) and procedures as it shall deem
necessary or advisable and as shall be normal and usual in its general mortgage
servicing activities. The foregoing is subject to the proviso that the Servicer
shall not be required to incur any Liquidation Expenses or to otherwise expend
its own funds in connection with any foreclosure or towards the correction of
any default on a related senior mortgage loan or restoration of any property
unless it shall determine that such expenditure will increase Net Liquidation
Proceeds.
In the event that title to any Mortgaged Property is acquired in
foreclosure or by deed in lieu of foreclosure, the deed or certificate of sale
shall be issued to the Indenture Trustee, or to its nominee on behalf of the
Trust.
The Servicer, in its sole discretion, shall have the right but not the
obligation to purchase for its own account from the Trust any Mortgage Loan
which is 91 days or more delinquent. The price for any Mortgage Loan purchased
hereunder (which shall be at a purchase price equal to the Loan Purchase Price
thereof), shall be deposited in the Collection Account and the Indenture
Trustee, upon receipt of a certificate from the Servicer in the form of Exhibit
C-1 hereto, shall release or cause to be released to the Servicer the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment prepared by the Servicer, in each case without recourse,
representation or warranty, as shall be necessary to vest in the purchaser of
such Mortgage Loans any Mortgage Loans released pursuant hereto and the Servicer
shall succeed to all the Indenture Trustee's right, title and interest in and to
such Mortgage Loans and all security and documents related thereto. Such
assignment shall be an assignment outright and not for security. The Servicer
shall thereupon own such Mortgage Loans, and all security and documents, free of
any further obligation to the Indenture Trustee, the Insurer or the
Securityholders with respect thereto.
Section 3.07. Indenture Trustee to Cooperate. On or before each Payment
Date, the Servicer will notify the Indenture Trustee of the payment in full of
the Principal Balance of any Mortgage Loan during the preceding Collection
Period, which notification shall be by a certification (which certification
shall include a statement to the effect that all amounts received in connection
with such payment which are required to be deposited in the Collection Account
pursuant to Section 3.02 have been so deposited or credited) of a Servicing
Officer. Upon any such payment in full, the Servicer is authorized to execute,
pursuant to the authorization contained in Section 3.01, if the assignments of
Mortgage have been recorded as required hereunder, an instrument of satisfaction
regarding the related Mortgage, which instrument of satisfaction shall be
recorded by the Servicer if required by applicable law and be delivered to the
Person entitled thereto. It is understood and agreed that no expenses incurred
in connection with such instrument of satisfaction or transfer shall be
reimbursed from amounts deposited in
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the Collection Account. If the Indenture Trustee is holding the Mortgage Files,
from time to time and as appropriate for the servicing or foreclosure of any
Mortgage Loan, or in connection with the payment in full of the Principal
Balance of any Mortgage Loan shall, upon request of the Servicer and delivery to
the Indenture Trustee of a Request for Release substantially in the form
attached hereto as Exhibit C signed by a Servicing Officer, release the related
Mortgage File to the Servicer and the Indenture Trustee shall execute such
documents, in the forms provided by the Servicer, as shall be necessary to the
prosecution of any such proceedings or the taking of other servicing actions.
Such trust receipt shall obligate the Servicer to return the Mortgage File to
the Indenture Trustee when the need therefor by the Servicer no longer exists
unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a
certificate of a Servicing Officer similar to that hereinabove specified, the
trust receipt shall be released by the Indenture Trustee.
In order to facilitate the foreclosure of the Mortgage securing any
Mortgage Loan that is in default following recordation of the Assignments of
Mortgage in accordance with the provisions hereof, the Indenture Trustee shall,
if so requested in writing by the Servicer, execute an appropriate assignment in
the form provided to the Indenture Trustee by the Servicer to assign such
Mortgage Loan for the purpose of collection to the Servicer or to the related
subservicer (any such assignment shall unambiguously indicate that the
assignment is for the purpose of collection only), and, upon such assignment,
the Servicer will thereupon bring all required actions in its own name and
otherwise enforce the terms of the Mortgage Loan and deposit the Net Liquidation
Proceeds, exclusive of Foreclosure Profits, received with respect thereto in the
Collection Account. In the event that all delinquent payments due under any such
Mortgage Loan are paid by the Mortgagor and any other defaults are cured, then
the Servicer shall promptly reassign such Mortgage Loan to the Indenture Trustee
and return the related Mortgage File to the place where it was being maintained.
Section 3.08. Servicing Compensation; Payment of Certain Expenses by
Servicer. The Servicer shall be entitled to receive the Servicing Fee pursuant
to Section 3.03 as compensation for its services in connection with servicing
the Mortgage Loans. Moreover, additional servicing compensation in the form of
late payment charges or other receipts not required to be deposited in the
Collection Account (other than Foreclosure Profits) shall be retained by the
Servicer. The Servicer shall be required to pay all expenses incurred by it in
connection with its activities hereunder (including payment of all other fees
and expenses not expressly stated hereunder to be for the account of the
Securityholders) and shall not be entitled to reimbursement therefor except as
specifically provided herein. Liquidation Expenses are reimbursable to the
Servicer solely from related Liquidation Proceeds.
Section 3.09. Annual Statement as to Compliance.
(a) The Servicer will deliver to the Indenture Trustee, the Insurer and
the Rating Agencies, on or before March 31 of each year, beginning March 31,
2001, an Officer's Certificate stating that (i) a review of the activities of
the Servicer during the preceding fiscal year (or such shorter period as is
applicable in the case of the first report) and of its performance under this
Agreement has been made under such officer's supervision and (ii) to the best of
such officer's knowledge, based on such review, the Servicer has fulfilled all
of its material obligations under this Agreement throughout such fiscal year,
or, if there has been a default in
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the fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Indenture Trustee, the Insurer
and each of the Rating Agencies, promptly after having obtained knowledge
thereof, but in no event later than five Business Days thereafter, written
notice by means of an Officer's Certificate of any event which with the giving
of notice or the lapse of time or both, would become an Event of Servicing
Termination.
Section 3.10. Annual Servicing Report. On or before March 31 of each
year, beginning March 31, 2001, the Servicer, at its expense, shall cause a firm
of nationally recognized independent public accountants (who may also render
other services to the Servicer) to furnish a report to the Indenture Trustee,
the Insurer and each Rating Agency to the effect that such firm has examined
certain documents and records relating to the servicing of mortgage loans during
the most recent fiscal year then ended under pooling and servicing agreements
(substantially similar to this Agreement, including this Agreement), that such
examination was conducted substantially in compliance with the audit guide for
audits of non-supervised mortgagees approved by the Department of Housing and
Urban Development for use by independent public accountants (to the extent that
the procedures in such audit guide are applicable to the servicing obligations
set forth in such agreements) and that such examination has disclosed no items
of noncompliance with the provisions of this Agreement which, in the opinion of
such firm, are material, except for such items of noncompliance as shall be set
forth in such report.
Section 3.11. Annual Opinion of Counsel. On or before March 31 of each
year, beginning March 31, 2001, the Sponsor, at its expense, shall deliver to
the Indenture Trustee and the Insurer the applicable Opinion of Counsel
specified in Exhibit B hereto.
Section 3.12. Access to Certain Documentation and Information Regarding
the Mortgage Loans.
(a) Servicer shall provide to the Indenture Trustee, the Insurer, any
Noteholders that are federally insured savings and loan associations, the Office
of Thrift Supervision, successor to the Federal Home Loan Bank Board, the FDIC
and the supervisory agents and examiners of the Office of Thrift Supervision
access to the documentation regarding the Mortgage Loans required by applicable
regulations of the Office of Thrift Supervision and the FDIC (acting as operator
of the SAIF or the BIF), such access being afforded without charge but only upon
reasonable request and during normal business hours at the offices of the
Servicer. Nothing in this Section 3.12 shall derogate from the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of the Servicer to provide access as
provided in this Section 3.12 as a result of such obligation shall not
constitute a breach of this Section 3.12.
(b) The Servicer shall supply information in such form as the Indenture
Trustee shall reasonably request to the Indenture Trustee and the Paying Agent,
on or before the start of the Determination Date preceding the related Payment
Date, as is required in the Indenture Trustee's reasonable judgment to enable
the Paying Agent or the Indenture Trustee, as the case may be, to
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make required distributions and to furnish the required reports to Noteholders
and to make any claim under the Policy.
Section 3.13. Maintenance of Certain Servicing Insurance Policies. The
Servicer shall during the term of its service as servicer maintain in force (i)
a policy or policies of insurance covering errors and omissions in the
performance of its obligations as master servicer hereunder and (ii) a fidelity
bond in respect of its officers, employees or agents. Each such policy or
policies and bond together shall comply with the requirements from time to time
of the Federal National Mortgage Association for persons performing servicing
for mortgage loans purchased by such Association.
Section 3.14. Reports to the Securities and Exchange Commission. The
Indenture Trustee shall, on behalf of the Trust, cause to be filed with the
Securities and Exchange Commission any periodic reports required to be filed
under the provisions of the Securities Exchange Act of 1934, as amended, and the
rules and regulations of the Securities and Exchange Commission thereunder. Upon
the request of the Indenture Trustee, each of the Servicer and the Sponsor shall
cooperate with the Indenture Trustee in the preparation of any such report and
shall provide to the Indenture Trustee in a timely manner all such information
or documentation as the Indenture Trustee may reasonably request in connection
with the performance of its duties and obligations under this Section.
Section 3.15. Tax Returns. In accordance with Section 2.09 hereof, the
Servicer shall prepare and file any Federal, State or local income and franchise
tax return for the Trust as well as any other applicable return and apply for a
taxpayer identification number on behalf of the Trust as provided in Article V
of the Trust Agreement, including, without limitation, forms 1099 and 1065. The
Sponsor shall treat the Mortgage Loans as its property for all Federal, State or
local tax purposes and shall report all income earned thereon (including amounts
payable as fees to the Servicer) as its income for income tax purposes. In the
event the Trust shall be required pursuant to an audit or administrative
proceeding or change in applicable regulations to file Federal, State or local
tax returns, the Servicer shall prepare and file or shall cause to be prepared
and filed any tax returns required to be filed by the Trust; the Indenture
Trustee shall promptly sign such returns and deliver such returns after
signature to the Servicer and such returns shall be filed by the Servicer. The
Indenture Trustee shall also prepare or shall cause to be prepared all tax
information required by law to be distributed to Noteholders. In no event shall
the Indenture Trustee or the Servicer be liable for any liabilities, costs or
expenses of the Trust, the Noteholders, the Certificateholders or the Note
Owners arising under any tax law, including, without limitation, Federal, state
or local income and franchise or excise taxes or any other tax imposed on or
measured by income (or any interest or penalty with respect thereto or arising
from a failure to comply therewith).
Section 3.16. Information Required by the Internal Revenue Service
Generally and Reports of Foreclosures and Abandonments of Mortgaged Property.
The Servicer shall prepare and deliver all federal and state information reports
when and as required by all applicable state and federal income tax laws. In
particular, with respect to the requirement under Section 6050J of the Code to
the effect that the Servicer shall make reports of foreclosures and abandonments
of any mortgaged property for each year beginning in 2000, the Servicer shall
file reports relating to each instance occurring during the previous calendar
year in which the Servicer (i) on
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behalf of the Indenture Trustee acquires an interest in any Mortgaged Property
through foreclosure or other comparable conversion in full or partial
satisfaction of a Mortgage Loan, or (ii) knows or has reason to know that any
Mortgaged Property has been abandoned. The reports from the Servicer shall be in
form and substance sufficient to meet the reporting requirements imposed by
Section 6050J.
ARTICLE IV
SERVICING CERTIFICATE
Section 4.01. Servicing Certificate. Not later than each Determination
Date, the Servicer shall deliver (a) to the Indenture Trustee, the Statement to
each Class of Noteholders required to be prepared pursuant to Section 8.7 of the
Indenture and (b) to the Indenture Trustee, the Sponsor, the Paying Agent, the
Insurer and each Rating Agency a Servicing Certificate (in written form or the
form of computer readable media or such other form as may be agreed to by the
Indenture Trustee and the Servicer), together with an Officer's Certificate to
the effect that such Servicing Certificate is true and correct in all material
respects, stating the related Collection Period, Payment Date, the series number
of the Notes, the date of this Agreement, and:
(i) the aggregate amount of collections received on the
Mortgage Loans on or prior to the Determination Date in respect of such
Collection Period;
(ii) the aggregate amount of (a) Interest Collections and (b)
Principal Collections for such Collection Period;
(iii) the Class A-1 Note Rate and the Class A-2 Note Rate;
(iv) the amount, if any, of such Class A-1 Interest Payment
Amount or Class A-2 Interest Payment Amount that is not payable on
account of insufficient Noteholders' Interest Collections;
(v) the Accelerated Principal Payments to be distributed
pursuant to Section 8.6(d)(viii) of the Indenture;
(vi) the Principal Collections for such Payment Date,
separately stating the components thereof;
(vii) any accrued and unpaid Servicing Fees for previous
Collection Periods and the Servicing Fee for such Collection Period;
(viii) the related Pool Balance for each Pool as of the end of
the preceding Collection Period and as of the end of the second
preceding Collection Period;
(ix) the Class A-1 Note Principal Balance and the Class A-2
Note Principal Balance and related Pool Factor after giving effect to
the distribution on such Payment Date;
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(x) the aggregate amount of Additional Balances created during
the previous Collection Period;
(xi) the number and aggregate Principal Balances of Mortgage
Loans (x) as to which the Minimum Monthly Payment is delinquent for
30-59 days, 60-89 days and 90 or more days, respectively and (y) that
have become REO, in each case as of the end of the preceding Collection
Period;
(xii) whether a Rapid Amortization Event has occurred since
the prior Determination Date, specifying each such Rapid Amortization
Event if one has occurred;
(xiii) whether an Event of Servicing Termination has occurred
since the prior Determination Date, specifying each such Event of
Servicing Termination if one has occurred;
(xiv) the amount to be distributed to the Insurer pursuant to
Section 8.6(d)(ii) and Section 8.6(d)(vi) of the Indenture, stated
separately;
(xv) the amount to be distributed to the Reserve Fund pursuant
to Section 8.6(d)(ix) of the Indenture;
(xvi) Insured Payments, if any, for such Payment Date
including any related Deficiency Amount and any related Preference
Amount;
(xvii) the amount to be distributed to the related
Certificateholders pursuant to Section 8.6(d)(xiii) of the Indenture;
(xviii) the amount to be paid to the Servicer pursuant to
Section 8.6(d)(x) of the Indenture;
(xix) the total amount of funds on deposit in the Reserve
Fund;
(xx) the related Overcollateralization Amount after giving
effect to the distribution to be made on such Payment Date; and
(xxi) the number and Principal Balances of any Mortgage Loans
retransferred to the Sponsor pursuant to Section 2.07;
In addition, on the Servicing Certificate delivered in January 2000, the
Servicer shall also indicate (i) the amount on deposit in the Pre-Funding
Account as of such Payment Date and (ii) the aggregate of the Principal Balances
of Subsequent Mortgage Loans purchased on the related Subsequent Transfer Date.
The Indenture Trustee shall conclusively rely upon the information
contained in a Servicing Certificate for purposes of making distributions
pursuant to Section 8.6 of the Indenture, shall have no duty to inquire into
such information and shall have no liability in so relying. The format and
content of the Servicing Certificate may be modified by the mutual
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agreement of the Servicer, the Indenture Trustee and the Insurer. The Servicer
shall give notice of any such change to the Rating Agencies.
Section 4.02. Reserve Fund.
(a) Amounts on deposit in the Reserve Fund will, at the direction of
the Servicer, be invested in Eligible Investments maturing no later than the day
before the next Payment Date.
All income and gain realized from any investment of funds in the
Reserve Fund shall be considered part of the Reserve Fund until released
pursuant to the Indenture. Following that point all earnings shall go to the
Sponsor. The Sponsor will report for Federal, state and local income tax
purposes the income, if any, represented by the Reserve Fund.
(b) Following the termination of the Trust pursuant to Section 7.01
hereof, the Indenture Trustee shall withdraw all amounts then on deposit in the
Reserve Fund pursuant to the Indenture.
ARTICLE V
THE SERVICER AND THE SPONSOR
Section 5.01. Liability of the Servicer and the Sponsor. The Servicer
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Servicer herein. The Sponsor
shall be liable in accordance herewith only to the extent of the obligations
specifically imposed upon and undertaken by the Sponsor.
Section 5.02. Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Sponsor. Any corporation into which the
Servicer or the Sponsor may be merged or consolidated, or any corporation
resulting from any merger, conversion or consolidation to which the Servicer or
the Sponsor shall be a party, or any corporation succeeding to the business of
the Servicer or the Sponsor, shall be the successor of the Servicer or the
Sponsor, as the case may be, hereunder, 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 5.03. Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Trust or the Securityholders
for any action taken or for refraining from the taking of any action by the
Servicer in good faith pursuant to this Agreement, or for errors in judgment;
provided, however, that this provision shall not protect the Servicer or any
such Person against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
of the Servicer or by reason of reckless disregard of obligations and duties of
the Servicer hereunder. The Servicer and any director or officer or employee or
agent of the Servicer may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder. The Servicer and any director or officer or employee or agent
of the Servicer shall be indemnified by the Trust and held harmless against any
loss, liability or expense incurred in connection with any legal action relating
to this Agreement or the Notes, other than any loss,
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liability or expense related to any specific Mortgage Loan (except as any such
loss, liability or expense shall be otherwise reimbursable pursuant to this
Agreement) and any loss, liability or expense incurred by reason of its willful
misfeasance, bad faith or gross negligence in the performance of duties
hereunder or by reason of its reckless disregard of obligations and duties
hereunder. The Servicer shall not be under any obligation to appear in,
prosecute or defend any legal action which is not incidental to duties to
service the Mortgage Loans in accordance with this Agreement, and which in its
opinion may involve it in any expense or liability; provided, however, that the
Servicer may in its sole discretion undertake any such action which it may deem
necessary or desirable in respect of this Agreement, and the rights and duties
of the parties hereto and the interests of the Securityholders hereunder. In
such event, the reasonable legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust and the Servicer shall only be entitled to be reimbursed therefor pursuant
to Section 8.6(d)(x) of the Indenture. The Servicer's right to indemnity or
reimbursement pursuant to this Section 5.03 shall survive any resignation or
termination of the Servicer pursuant to Section 5.04 or 6.01 with respect to any
losses, expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination).
Section 5.04. Servicer Not to Resign. Subject to the provisions of
Section 5.02, the Servicer shall not resign from the obligations and duties
hereby imposed on it except (i) upon determination that the performance of its
obligations or duties hereunder are no longer permissible under applicable law
or are in material conflict by reason of applicable law with any other
activities carried on by it or its subsidiaries or Affiliates, the other
activities of the Servicer so causing such a conflict being of a type and nature
carried on by the Servicer or its subsidiaries or Affiliates at the date of this
Agreement or (ii) upon satisfaction of the following conditions: (a) the
Servicer has proposed a successor servicer to the Indenture Trustee and the
Insurer in writing and such proposed successor servicer is reasonably acceptable
to the Indenture Trustee; (b) each Rating Agency shall have delivered a letter
to the Indenture Trustee and the Insurer prior to the appointment of the
successor servicer stating that the proposed appointment of such successor
servicer as Servicer hereunder will not result in the qualification, reduction
or withdrawal of the then current rating of the Notes without regard to the
Policy; and (c) such proposed successor servicer is reasonably acceptable to the
Insurer, as evidenced by a letter to the Indenture Trustee; provided, however,
that no such resignation by the Servicer shall become effective until the
Indenture Trustee or successor servicer designated by the Servicer as provided
above shall have assumed the Servicer's responsibilities and obligations
hereunder or the Indenture Trustee shall have designated a successor servicer in
accordance with Section 6.02. Any such resignation shall not relieve the
Servicer of responsibility for any of the obligations specified in Sections 6.01
and 6.02 as obligations that survive the resignation or termination of the
Servicer. Any such determination permitting the resignation of the Servicer
pursuant to clause (i) above shall be evidenced by an Opinion of Counsel to such
effect delivered to the Indenture Trustee and the Insurer. The Servicer shall
have no claim (whether by subrogation or otherwise) or other action against any
Securityholder for any amounts paid by the Servicer pursuant to any provision of
this Agreement.
Section 5.05. Delegation of Duties. In the ordinary course of business,
the Servicer at any time may delegate any of its duties hereunder to any Person,
including any of its Affiliates, or any subservicer referred to in Section 3.01,
who agrees to conduct such duties in
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accordance with standards comparable to those with which the Servicer complies
pursuant to Section 3.01. Such delegation shall not relieve the Servicer of its
liabilities and responsibilities with respect to such duties and shall not
constitute a resignation within the meaning of Section 5.04.
Section 5.06. Indemnification of the Trust by the Servicer. The
Servicer shall indemnify and hold harmless the Trust, the Owner Trustee and the
Indenture Trustee from and against any loss, liability, expense, damage or
injury suffered or sustained by reason of the Servicer's activities or omissions
in servicing or administering the Mortgage Loans that are not in accordance with
this Agreement, including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim. Any
such indemnification shall not be payable from the assets of the Trust. The
provisions of this indemnity shall run directly to and be enforceable by an
injured party subject to the limitations hereof. The provisions of this Section
5.06 shall survive termination of this Agreement.
Section 5.07. Indemnification of the Trust by the Sponsor.
Notwithstanding anything to the contrary contained herein, the Sponsor (i)
agrees to be liable directly to the injured party for the entire amount of any
losses, claims, damages, liabilities and expenses of the Trust (other than those
attributable to a Noteholder as a result of defaults on the Mortgage Loans) to
the extent that the Sponsor would be liable if the Trust were a partnership
under the Delaware Revised Uniform Limited Partnership Act in which the Sponsor
was a general partner and (ii) shall indemnify and hold harmless the Trust, the
Owner Trustee and the Indenture Trustee from and against any loss, liability,
expense, damage, claim or injury (other than those attributable to a Noteholder
as a result of defaults on the Mortgage Loans) arising out of or based on this
Agreement by reason of any acts, omissions, or alleged acts or omissions arising
out of activities of the Trust, the Owner Trustee or the Indenture Trustee, or
the actions of the Servicer, including, but not limited to, amounts payable to
the Servicer pursuant to Section 5.03, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided that the Sponsor shall not indemnify the Owner Trustee or the Indenture
Trustee (but shall indemnify any other injured party) if such loss, liability,
expense, damage or injury is due to the Owner Trustee's or the Indenture
Trustee's willful malfeasance, bad faith or gross negligence or by reason of the
Owner Trustee's or the Indenture Trustee's reckless disregard of its obligations
hereunder. The provisions of this indemnity shall run directly to and be
enforceable by an injured party subject to the limitations hereof.
Section 5.08. Limitation on Liability of the Sponsor. None of the
directors or officers or employees or agents of the Sponsor shall be under any
liability to the Trust, the Owner Trustee or the Indenture Trustee or the
Securityholders, it being expressly understood that all such liability is
expressly waived and released as a condition of, and as consideration for, the
execution of this Agreement and the issuance of the Notes; provided, however,
that this provision shall not protect any such Person against any liability
which would otherwise be imposed by reason of willful misfeasance, bad faith or
gross negligence in the performance of the duties hereunder. Except as provided
in Section 5.07, the Sponsor shall not be under any liability to the Trust, the
Owner Trustee or the Indenture Trustee or the Securityholders for any action
taken or for refraining from the taking of any action in its capacity as Sponsor
pursuant to
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this Agreement whether arising from express or implied duties under this
Agreement; provided, however, that this provision shall not protect the Sponsor
against any liability which would otherwise be imposed by reason of willful
misfeasance, bad faith or gross negligence in the performance of its duties or
by reason of reckless disregard of its obligations and duties hereunder. The
Sponsor and any director or officer or employee or agent of the Sponsor may rely
in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder.
ARTICLE VI
SERVICING TERMINATION
Section 6.01. Events of Servicing Termination. If any one of the
following events ("Events of Servicing Termination") shall occur and be
continuing:
(i) Any failure by the Servicer to deposit in the Collection
Account any deposit required to be made under the terms of this
Agreement which continues unremedied for a period of five Business Days
after the date upon which written notice of such failure shall have
been given to the Servicer by the Indenture Trustee or to the Servicer
and the Indenture Trustee by the Insurer or Holders of Notes evidencing
more than 25% of the Principal Balance of the Notes instruct otherwise;
or
(ii) Failure on the part of the Servicer duly to observe or
perform in any material respect any other covenants or agreements of
the Servicer set forth in the Notes or in this Agreement, which failure
continues unremedied for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, and
stating that such notice is a "Notice of Default" hereunder, shall have
been given to the Servicer by the Indenture Trustee or to the Servicer
and the Indenture Trustee by the Insurer or the Holders of Notes
evidencing Percentage Interests aggregating not less than 25%; or
(iii) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding up or liquidation of its affairs, and
the continuance of any such decree or order unstayed and in effect for
a period of 60 consecutive days; or
(iv) The consent by the Servicer to the appointment of a
trustee, conservator, receiver or liquidator in any insolvency,
conservatorship, receivership, readjustment of debt, marshalling of
assets and liabilities or similar proceedings of or relating to the
Servicer or of or relating to substantially all of its property; or the
Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for
the benefit of its creditors, or voluntarily suspend payment of its
obligations;
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(v) the occurrence of an Event of Servicer Termination under
the Insurance Agreement.
then, and in each and every such case, so long as an Event of Servicing
Termination shall not have been remedied by the Servicer, either the Indenture
Trustee, the Insurer or the Holders of Notes evidencing more than 50% of the
Outstanding Amount of the Notes instruct otherwise, in each case with the
consent of the Insurer, or the Insurer, by notice then given in writing to the
Servicer (and to the Indenture Trustee if given by the Insurer or the Holders of
Notes) may terminate all of the rights and obligations of the Servicer as
servicer under this Agreement. Upon the occurrence of a Servicer Termination
Delinquency Rate Trigger or Servicer Termination Loss Trigger as those terms are
defined in the Insurance Agreement, the Insurer may, in its reasonable
discretion, terminate all of the rights and obligations of the Servicer pursuant
to the terms hereof. Any such notice to the Servicer shall also be given to each
Rating Agency and the Insurer. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under this Agreement,
whether with respect to the Notes or the Mortgage Loans or otherwise, shall pass
to and be vested in the Indenture Trustee pursuant to and under this Section
6.01; and, without limitation, the Indenture Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of each Mortgage Loan and related documents, or otherwise. The
Servicer agrees to cooperate with the Indenture Trustee in effecting the
termination of the responsibilities and rights of the Servicer hereunder,
including, without limitation, the transfer to the Indenture Trustee for the
administration by it of all cash amounts that shall at the time be held by the
Servicer and to be deposited by it in the Collection Account, or that have been
deposited by the Servicer in the Collection Account or thereafter received by
the Servicer with respect to the Mortgage Loans. All reasonable costs and
expenses (including attorneys' fees) incurred in connection with amending this
Agreement to reflect such succession as Servicer pursuant to this Section 6.01
shall be paid by the predecessor Servicer (or if the predecessor Servicer is the
Indenture Trustee, the initial Servicer) upon presentation of reasonable
documentation of such costs and expenses.
Notwithstanding the foregoing, a delay in or failure of performance
under Section 6.01(i) for a period of two Business Days or under Section
6.01(ii) for a period of 60 days, shall not constitute an Event of Servicing
Termination if such delay or failure could not be prevented by the exercise of
reasonable diligence by the Servicer and such delay or failure was caused by an
act of God or the public enemy, acts of declared or undeclared war, public
disorder, rebellion or sabotage, epidemics, landslides, lightning, fire,
hurricanes, earthquakes, floods or similar causes. The preceding sentence shall
not relieve the Servicer from using its best efforts to perform its respective
obligations in a timely manner in accordance with the terms of this Agreement
and the Servicer shall provide the Indenture Trustee, the Sponsor, the Insurer
and the Noteholders and Certificateholders with an Officer's Certificate giving
prompt notice of such failure or delay by it, together with a description of its
efforts to so perform its obligations. The Servicer shall immediately notify the
Indenture Trustee and the Insurer in writing of any Events of Servicing
Termination.
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Section 6.02. Indenture Trustee to Act; Appointment of Successor.
(a) On and after the time the Servicer receives a notice of termination
pursuant to Section 6.01 or resigns pursuant to Section 5.04, the Indenture
Trustee shall be the successor in all respects to the Servicer in its capacity
as servicer under this Agreement and the transactions set forth or provided for
herein and shall be subject to all the responsibilities, duties and liabilities
relating thereto placed on the Servicer by the terms and provisions hereof.
Notwithstanding the above, if the Indenture Trustee becomes the Servicer
hereunder, it shall have no responsibility or obligation (i) of repurchase or
substitution with respect to any Mortgage Loan, (ii) with respect to any
representation or warranty of the Servicer, and (iii) for any act or omission of
either a predecessor or successor Servicer other than the Indenture Trustee. As
compensation therefor, the Indenture Trustee shall be entitled to such
compensation as the Servicer would have been entitled to hereunder if no such
notice of termination had been given. In addition, the Indenture Trustee will be
entitled to compensation with respect to its expenses in connection with
conversion of certain information, documents and record keeping, as provided in
Section 6.7 and 6.8 of the Indenture. Notwithstanding the above, (i) if the
Indenture Trustee is unwilling to act as successor Servicer, or (ii) if the
Indenture Trustee is legally unable so to act, the Indenture Trustee may with
the consent of the Insurer (in the situation described in clause (i)) or shall
(in the situation described in clause (ii)) appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, bank or other mortgage loan or home equity loan servicer with all
licenses and permits required to perform its obligations under this Agreement
and having a net worth of not less than $15,000,000 as the successor to the
Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder; provided that any such
successor Servicer shall be acceptable to the Insurer, as evidenced by the
Insurer's prior written consent, which consent shall not be unreasonably
withheld; and provided, further, that the appointment of any such successor
Servicer will not result in the qualification, reduction or withdrawal of the
ratings assigned to the Notes by the Rating Agencies without regard to the
Policy. Pending appointment of a successor to the Servicer hereunder, unless the
Indenture Trustee is prohibited by law from so acting, the Indenture Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the successor shall be entitled to receive
compensation out of payments on Mortgage Loans in an amount equal to the
compensation which the Servicer would otherwise have received pursuant to
Section 3.08 (or such lesser compensation as the Indenture Trustee and such
successor shall agree). The Indenture Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession.
(b) Any successor, including the Indenture Trustee, to the Servicer as
servicer shall during the term of its service as servicer (i) continue to
service and administer the Mortgage Loans for the benefit of Securityholders and
the Insurer and (ii) maintain in force a policy or policies of insurance
covering errors and omissions in the performance of its obligations as Servicer
hereunder and a fidelity bond in respect of its officers, employees and agents
to the same extent as the Servicer is so required pursuant to Section 3.13. The
appointment of a successor Servicer shall not affect any liability of the
predecessor Servicer which may have arisen under this Agreement prior to its
termination as Servicer (including, without limitation, any deductible under an
Insurance Policy pursuant to Section 3.04), nor shall any successor
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Servicer be liable for any acts or omissions of the predecessor Servicer or for
any breach by such Servicer of any of its representations or warranties
contained herein.
Section 6.03. Notification to Securityholders. Upon any termination or
appointment of a successor to the Servicer pursuant to this Article VI or
Section 5.04, the Indenture Trustee shall give prompt written notice thereof to
the Securityholders at their respective addresses appearing in the Note
Register, the Certificate Register, the Insurer and each Rating Agency.
ARTICLE VII
TERMINATION
Section 7.01. Termination.
(a) The respective obligations and responsibilities of the Servicer,
the Sponsor and the Indenture Trustee created hereby (other than the obligation
of the Indenture Trustee to make certain payments to Noteholders after the final
Payment Date and the obligation of the Servicer to send certain notices as
hereinafter set forth) shall terminate upon the last action required to be taken
by the Indenture Trustee on the final Payment Date pursuant to this Article VII
following the later of (A) the Payment Date following payment in full of all
amounts owing to the Insurer and (B) the earliest of (i) the transfer, under the
conditions specified in Section 7.01(b), to the Sponsor of the Noteholders'
interest on each Mortgage Loan and all property acquired in respect of any
Mortgage Loans remaining in the Trust for an amount equal to the sum of (w) the
sum of the Class A-1 Note Principal Balance and the Class A-2 Note Principal
Balance, (x) the sum of accrued and unpaid Class A-1 Interest Payment Amount and
Class A-2 Interest Payment Amount through the day preceding the final Payment
Date, and (y) interest accrued on any Class A-1 Deferred Interest or Class A-2
Deferred Interest to the extent legally permissible, and (z) all amounts due and
owing the Insurer pursuant to the Insurance Agreement and Section 8.6 of the
Indenture, (ii) the day following the Payment Date on which the distribution
made to Noteholders has reduced the Class A-1 Note Principal Balance and the
Class A-2 Note Principal Balance to zero and no other amounts are owed to the
Noteholders hereunder pursuant to the Insurance Agreement and Section 8.6 of the
Indenture, (iii) the final payment or other liquidation of the last Mortgage
Loan remaining in the Trust (including, without limitation, the disposition of
the Mortgage Loans pursuant to Section 5.4 of the Indenture) or the disposition
of all property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan and (iv) the Payment Date in December 2025; provided, however,
that in no event shall the trust created hereby continue beyond the expiration
of 21 years from the date of death of the last surviving descendants of Joseph
P. Kennedy, the late ambassador of the United States to the Court of St. James,
living on the date hereof. Upon termination in accordance with clause (a)(B)(i)
of this Section 7.01, the Indenture Trustee shall execute such documents and
instruments of transfer presented by the Sponsor, in each case without recourse,
representation or warranty, and take such other actions as the Sponsor may
reasonably request to effect the transfer of the Mortgage Loans to the Sponsor.
(b) (i) The Sponsor shall have the right to exercise the option to
effect the transfer to the Sponsor of each Pool I Mortgage Loan
pursuant to Section 7.01(a)(B) above on any Payment Date on or after
the Payment Date immediately prior to which the
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Class A-1 Note Principal Balance is less than ten percent (10%) of the
Original Class A-1 Note Principal Balance and all amounts due and owing
to the Insurer for unpaid premiums and unreimbursed draws on the Policy
(in each case, related to the Class A-1 Notes) and all other amounts
due and owing to the Insurer pursuant to the Insurance Agreement,
together with interest thereon as provided under the Insurance
Agreement, have been paid.
(ii) The Sponsor shall have the right to exercise the option
to effect the transfer to the Sponsor of each Pool II Mortgage Loan
pursuant to Section 7.01(a)(B) above on any Payment Date on or after
the Payment Date immediately prior to which the Class A-2 Note
Principal Balance is less than ten percent (10%) of the Original Class
A-2 Note Principal Balance and all amounts due and owing to the Insurer
for unpaid premiums and unreimbursed draws on the Policy (in each case,
related to the Class A-2 Notes) and all other amounts due and owing to
the Insurer for unpaid premiums and unreimbursed draws on the Policy
and all other amounts due and owing to the Insurer pursuant to the
Insurance Agreement, together with interest thereon as provided under
the Insurance Agreement, have been paid.
(c) The Sponsor, at its expense, shall prepare and deliver to the
Indenture Trustee for execution, at the time the related Mortgage Loans are to
be released to the Sponsor, appropriate documents assigning each such Mortgage
Loan from the Indenture Trustee to the Sponsor and shall promptly record such
assignments.
(d) The Sponsor shall not exercise its right to repurchase the Mortgage
Loans pursuant to Section 7.01(b) hereof if such repurchase would result in a
draw on the Policy, without the consent of the Insurer, which consent shall not
be unreasonably withheld.
ARTICLE VIII
ADMINISTRATIVE DUTIES OF THE SERVICER
Section 8.01. Administrative Duties.
(a) Duties with Respect to the Indenture. The Servicer shall perform
all its duties and the duties of the Issuer under the Indenture. In addition,
the Servicer shall consult with the Owner Trustee as the Servicer deems
appropriate regarding the duties of the Issuer under the Indenture. The Servicer
shall monitor the performance of the Issuer and shall advise the Owner Trustee
when action is necessary to comply with the Issuer's duties under the Indenture.
The Servicer shall prepare for execution by the Issuer or shall cause the
preparation by other appropriate Persons of all such documents, reports,
filings, instruments, certificates and opinions as it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture. In furtherance of
the foregoing, the Servicer shall take all necessary action that is the duty of
the Issuer to take pursuant to the Indenture.
41
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(b) Duties with Respect to the Issuer.
(i) In addition to the duties of the Servicer set forth in
this Agreement or any of the Basic Documents, the Servicer shall
perform such calculations and shall prepare for execution by the Issuer
or the Owner Trustee or shall cause the preparation by other
appropriate Persons of all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the
Issuer or the Owner Trustee to prepare, file or deliver pursuant to
this Agreement or any of the Basic Documents or under state and federal
tax and securities laws, and at the request of the Owner Trustee shall
take all appropriate action that it is the duty of the Issuer to take
pursuant to this Agreement or any of the Basic Documents, including,
without limitation, pursuant to Sections 2.6 and 2.11 of the Trust
Agreement. In accordance with the directions of the Issuer or the Owner
Trustee, the Servicer shall administer, perform or supervise the
performance of such other activities in connection with the Mortgage
Loans (including the Basic Documents) as are not covered by any of the
foregoing provisions and as are expressly requested by the Issuer or
the Owner Trustee and are reasonably within the capability of the
Servicer.
(ii) Notwithstanding anything in this Agreement or any of the
Basic Documents to the contrary, the Servicer shall be responsible for
promptly notifying the Owner Trustee and the Indenture Trustee and the
Insurer in the event that any withholding tax is imposed on the
Issuer's payments (or allocations of income) to a Certificateholder (as
defined in the Trust Agreement) as contemplated by this Agreement. Any
such notice shall be in writing and specify the amount of any
withholding tax required to be withheld by the Owner Trustee or the
Indenture Trustee pursuant to such provision.
(iii) Notwithstanding anything in this Agreement or the Basic
Documents to the contrary, the Servicer shall be responsible for
performance of the duties of the Issuer or the Sponsor set forth in
Section 5.1(a), (b), (c) and (d) of the Trust Agreement with respect
to, among other things, accounting and reports to Certificateholders
(as defined in the Trust Agreement).
(iv) The Servicer shall perform the duties of the Sponsor
specified in Section 10.2 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner
Trustee, and any other duties expressly required to be performed by the
Servicer under this Agreement or any of the Basic Documents.
(v) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Servicer may enter into
transactions with or otherwise deal with any of its Affiliates;
provided, however, that the terms of any such transactions or dealings
shall be in accordance with any directions received from the Issuer and
shall be, in the Servicer's opinion, no less favorable to the Issuer in
any material respect.
(c) Non-Ministerial Matters. With respect to matters that in the
reasonable judgment of the Servicer are non-ministerial, the Servicer shall not
take any action pursuant to this Article VIII unless within a reasonable time
before the taking of such action, the Servicer shall have
42
<PAGE>
notified the Owner Trustee and the Insurer of the proposed action and the Owner
Trustee and the Insurer shall not have withheld consent or provided an
alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and
the compromise of any action, claim or lawsuit brought by or against
the Issuer (other than in connection with the collection of the
Mortgage Loans);
(C) the amendment, change or modification of this Agreement or
any of the Basic Documents;
(D) the appointment of successor Note Registrars, successor
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of Successor Servicers or the consent to
the assignment by the Note Registrar, Paying Agent or Indenture Trustee
of its obligations under the Indenture; and
(E) the removal of the Indenture Trustee.
(d) Exceptions. Notwithstanding anything to the contrary in this
Agreement, except as expressly provided herein or in the other Basic Documents,
the Servicer, in its capacity hereunder, shall not be obligated to, and shall
not, (1) make any payments to the Noteholders or Certificateholders under the
Basic Documents, (2) sell the Trust Property pursuant to Section 5.4 of the
Indenture, (3) take any other action that the Issuer directs the Servicer not to
take on its behalf or (4) in connection with its duties hereunder assume any
indemnification obligation of any other Person.
(e) The Indenture Trustee or any successor Servicer shall not be
responsible for any obligations or duties of the Servicer under Section 8.01.
Section 8.02. Records. The Servicer shall maintain appropriate books of
account and records relating to services performed under this Agreement, which
books of account and records shall be accessible for inspection by the Issuer
and the Indenture Trustee at any time during normal business hours.
Section 8.03. Additional Information to be Furnished to the Issuer. The
Servicer shall furnish to the Issuer and the Indenture Trustee from time to time
such additional information regarding the Mortgage Loans as the Issuer and the
Indenture Trustee shall reasonably request.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.01. Amendment. This Agreement may be amended from time to
time by agreement among the Sponsor, the Servicer, and the Indenture Trustee, in
each case without
43
<PAGE>
notice to or the consent of any of the Noteholders or Certificateholders, but
only with the consent of the Insurer (which consent shall not be unreasonably
withheld), (i) to cure any ambiguity, (ii) to correct any defective provisions
or to correct or supplement any provisions herein that may be inconsistent with
any other provisions herein, (iii) to add to the duties of the Sponsor or the
Servicer, (iv) to add any other provisions with respect to matters or questions
arising under this Agreement or the Policy, as the case may be, which shall not
be inconsistent with the provisions of this Agreement, (v) to add or amend any
provisions of this Agreement as required by any Rating Agency or any other
nationally recognized statistical rating organization in order to maintain or
improve any rating of the Notes (it being understood that, after obtaining the
ratings in effect on the Closing Date, neither the Indenture Trustee, the
Sponsor nor the Servicer is obligated to obtain, maintain or improve any such
rating) or (vi) to comply with any requirement imposed by the Code; provided,
however, that such action shall not, as evidenced by an Opinion of Counsel,
materially and adversely affect the interests of any Noteholder or any
Certificateholder or the Insurer; and provided, further, that the amendment
shall be deemed not to adversely affect in any material respect the interests of
the Noteholders and the Certificateholders and no opinion referred to in the
preceding proviso shall be required to be delivered if the Person requesting the
amendment obtains a letter from each Rating Agency stating that the amendment
would not result in the downgrading or withdrawal of the respective ratings then
assigned to the Notes without regard to the Policy.
This Agreement also may be amended from time to time by agreement among
the Servicer, the Sponsor and the Indenture Trustee, with the consent of the
Insurer and the Holders of the Notes evidencing more than 50% of the Outstanding
Amount of the Notes instruct otherwise and the Holders of the Certificates
evidencing more than 50% of the percentage interest in the Certificates (which
consent of such Holders of Notes and Certificates given pursuant to this Section
9.01 or pursuant to any other provision of this Agreement shall be conclusive
and binding on such Holder and all future Holders of such securities and of any
security issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the security) for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the rights
of the Noteholders or the Certificateholders; provided, however, that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing of,
payments on the Notes or distributions or payments under the Policy which are
required to be made on any Note without the consent of the Holder of such Note
or (ii) reduce the aforesaid percentage required to consent to any such
amendment, without the consent of the Holders of all then outstanding Notes and
Certificates or (iii) adversely effect in any material respect the interests of
the Insurer.
Following the execution and delivery of any such amendment hereto or to
the Policy, either the Sponsor, if the Sponsor requested the amendment, or the
Servicer, if the Servicer requested the amendment, shall reimburse the Insurer
for the reasonable out-of-pocket costs and expenses incurred by the Insurer in
connection with such amendment.
Prior to the execution of any such amendment, the party hereto
requesting any such amendment shall furnish written notification of the
substance of such amendment to each Rating Agency. In addition, promptly after
the execution of any such amendment made with the consent of the Noteholders,
the Indenture Trustee shall furnish written notification of the
44
<PAGE>
substance of such amendment to each Noteholder and fully executed original
counterparts of the instruments effecting such amendment to the Insurer.
It shall not be necessary for the consent of Noteholders under this
Section 9.01 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Securityholders shall be subject to
such reasonable requirements as the Indenture Trustee may prescribe.
In executing any amendment permitted by this Section 9.01, the
Indenture Trustee shall be entitled to receive, and shall be fully protected in
relying upon, an Opinion of Counsel stating that such amendment is authorized or
permitted hereby and that all conditions precedent to the execution and delivery
of such amendment have been satisfied. The Indenture Trustee may, but shall not
be obligated to, enter into any such amendment which affects the Indenture
Trustee's own rights, duties or immunities under this Agreement or otherwise.
Section 9.02. Recordation of Agreement. This Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Indenture Trustee, but only upon direction of Noteholders accompanied by an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of Noteholders. The Noteholders requesting
such recordation shall bear all costs and expenses of such recordation. The
Indenture Trustee shall have no obligation to ascertain whether such recordation
so affects the interests of the Noteholders.
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 9.03. Limitation on Rights of Noteholders. No Noteholder shall
have any right to vote (except as provided in Sections 6.01, 7.01, and 9.01
herein and Section 5.4 of the Indenture) or in any manner otherwise control the
operation and management of the Trust, or the obligations of the parties hereto,
nor shall anything herein set forth, or contained in the terms of the Notes, be
construed so as to constitute the Noteholders from time to time as partners or
members of an association; nor shall any Noteholder be under any liability to
any third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Noteholder shall have any right by virtue or by availing itself of
any provisions 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 Indenture Trustee a written notice of
default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Notes evidencing more than 50% of the Outstanding Amount of
the Notes shall have made written request upon the Indenture Trustee to
institute such action, suit or proceeding in its own name as Indenture Trustee
hereunder and shall have offered to the Indenture Trustee such reasonable
indemnity as it may require against the costs, expenses and
45
<PAGE>
liabilities to be incurred therein or thereby, and the Indenture 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
being understood and intended, and being expressly covenanted by each Noteholder
with every other Noteholder and the Indenture Trustee, that no one or more
Holders of Notes shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb or prejudice the rights of the Holders of any other of the Notes, 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 Noteholders. For
the protection and enforcement of the provisions of this Section 9.03, each and
every Noteholder and the Indenture Trustee shall be entitled to such relief as
can be given either at law or in equity.
By accepting its Note, each Noteholder agrees that unless a Insurer
Default exists, the Insurer shall have the right to exercise all rights of the
Noteholder under this Agreement without any further consent of the Noteholder.
Section 9.04. 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.
Section 9.05. Notices. All demands, notices and communications
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by certified mail, return receipt requested,
to (a) in the case of the Sponsor, GreenPoint Mortgage Securities Inc., 700
Larkspur Landing Circle, Suite 250, Larkspur, California 94939, Attention: Peter
T. Paul, (b) in the case of the Servicer, GreenPoint Mortgage Funding, Inc.,
1100 Larkspur Landing Circle, Suite 101, Larkspur, California 94939, Attention:
Gilbert MacQuarrie, (c) in the case of the Indenture Trustee, at the Corporate
Trust Office, (d) in the case of the Insurer, Ambac Assurance Structured
Finance, One State Street Plaza, New York, NY 10022-4834, Attention: Managing
Director (telecopy number (212) 891-1456 or (212) 755-5477), (e) in the case of
Moody's, Residential Loan Monitoring Group, 4th Floor, 99 Church Street, New
York, New York 10007, and (f) in the case of Standard & Poor's, 55 Water Street,
New York, New York 10041, or, as to each party, at such other address as shall
be designated by such party in a written notice to each other party. Any notice
required or permitted to be mailed to a Noteholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Note
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
Securityholder receives such notice. Any notice or other document required to be
delivered or mailed by the Indenture Trustee to any Rating Agency shall be given
on a best efforts basis and only as a matter of courtesy and accommodation and
the Indenture Trustee shall have no liability for failure to deliver such notice
or document to any Rating Agency.
Section 9.06. 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
46
<PAGE>
affect the validity or enforceability of the other provisions of this Agreement
or of the Notes or the rights of the Holders thereof.
Section 9.07. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 5.02 and 5.04, this Agreement
may not be assigned by the Sponsor or the Servicer without the prior written
consent of the Insurer and Holders of the Notes evidencing Percentage Interests
aggregating not less than 66%.
Section 9.08. Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Certificateholders,
the Note Owners, the Insurer and their respective successors and permitted
assigns. Except as otherwise provided in this Agreement, no other Person will
have any right or obligation hereunder.
Section 9.09. Counterparts. This instrument may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
Section 9.10. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 9.11. Insurance Agreement. The Indenture Trustee is authorized
and directed to execute and deliver the Insurance Agreement and to perform the
obligations of the Indenture Trustee thereunder.
Section 9.12. Nonpetition Covenant. Until one year plus one day shall
have elapsed since the termination of the Trust in accordance with Section 7.01,
none of the Sponsor, the Company, the Servicer, nor the Indenture Trustee shall
petition or otherwise invoke the process of any court or government authority
for the purpose of commencing or sustaining a case against the Sponsor or the
Trust under any federal or state bankruptcy, insolvency or similar law or
appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Sponsor or the Trust or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Sponsor or the Trust.
47
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IN WITNESS WHEREOF, the Sponsor, the Servicer and the Indenture Trustee
have caused this Agreement to be duly executed by their respective officers all
as of the day and year first above written.
GREENPOINT MORTGAGE SECURITIES INC.,
as Sponsor
By: /s/ Kristen Decker
-----------------------------------------
Name: Kristen Decker
Title: Vice President
GREENPOINT MORTGAGE FUNDING, INC.,
as Company and Servicer
By: /s/ Gilbert J. MacQuarrie
-----------------------------------------
Name: Gilbert J. MacQuarrie
Title: Executive Vice President and Chief
Financial Officer
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee
By: /s/ R. Tarnas
-----------------------------------------
Name: R. Tarnas
Title: Vice President
GREENPOINT HOME EQUITY LOAN TRUST
1999-2, as Issuer
By: Wilmington Trust Company, not in its
individual capacity but solely as Owner
Trustee
By: /s/ James P. Lawler
-----------------------------------------
Name: James P. Lawler
Title: Vice President
[Sale and Servicing Agreement]
<PAGE>
EXHIBIT A
MORTGAGE LOAN SCHEDULE
[On file with Indenture Trustee]
A-1
<PAGE>
EXHIBIT B
FORM OF OPINION OF COUNSEL
WITH RESPECT TO SECTION 3.11 OF THE
SALE AND SERVICING AGREEMENT
The opinions set forth below may be subject to all the qualifications,
assumptions, limitations and exceptions taken or made in the opinions of counsel
to the Company delivered on the Closing Date. Unless otherwise indicated, all
capitalized terms used herein shall have the meanings ascribed to them in the
Sale and Servicing Agreement dated as of December 1, 1999 among GreenPoint
Mortgage Funding, Inc. (the "Company" and the "Servicer"), GreenPoint Mortgage
Securities Inc. (the "Sponsor") and Bank One, National Association, as Indenture
Trustee. Terms used but not defined herein shall have the meaning given to such
terms in the above-referenced Sale and Servicing Agreement.
The Indenture Trustee has a valid perfected first priority security interest
with respect to the Sponsor's right, title and interest in and to the Mortgage
Loans (including all Subsequent Mortgage Loans and all Eligible Substitute
Mortgage Loans).
B-1
<PAGE>
EXHIBIT C-1
OFFICER'S CERTIFICATE
REQUEST BY THE SERVICER FOR PERMANENT
RELEASE OF MORTGAGE LOANS AND MORTGAGE FILE
TO: Bank One, National Association,
as Indenture Trustee
One North State Street, 9th Floor
Chicago, Illinois 60602
Attention: Corporate Trust Office
Gentlemen:
In connection with the payment in full of the Mortgage Loans held by you as
Indenture Trustee, under the Sale and Servicing Agreement dated as of December
1, 1999 among GreenPoint Mortgage Funding, Inc., as Servicer, GreenPoint
Mortgage Securities Inc., as Sponsor, and you, as Indenture Trustee, the
undersigned requests the release of the Mortgage Loans and the Mortgage Files
for the Mortgage Loans identified in the schedule attached to this Request.
The undersigned hereby certifies that any and all payments received on the
Mortgage Loans identified in the schedule attached to this Request which are
required to be deposited in the Collection Account pursuant to Section 3.02 of
such Sale and Servicing Agreement have been so deposited.
GREENPOINT MORTGAGE FUNDING, INC.,
as Servicer
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Date:
---------------------------------
ACKNOWLEDGED BY:
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
Date:
--------------------------------
C-1-1
<PAGE>
EXHIBIT C-2
OFFICER'S CERTIFICATE
REQUEST BY THE SERVICER FOR TEMPORARY
RELEASE OF MORTGAGE LOANS AND MORTGAGE FILES
TO: Bank One, National Association,
as Indenture Trustee
One North State Street, 9th Floor
Chicago, Illinois 60602
Attention: Corporate Trust Office
Gentlemen:
In connection with the administration of the Mortgage Loans held by you as
Indenture Trustee, under the Sale and Servicing Agreement dated as of December
1, 1999 among GreenPoint Mortgage Funding, Inc., as Servicer, GreenPoint
Mortgage Securities Inc., as Sponsor, and you, as Indenture Trustee, the
undersigned requests the temporary release of the Mortgage Loans and the related
Mortgage Files for the Mortgage Loans identified in the schedule attached to
this Request.
GREENPOINT MORTGAGE FUNDING, INC.,
as Servicer
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Date:
---------------------------------
ACKNOWLEDGED BY:
BANK ONE, NATIONAL ASSOCIATION,
as Indenture Trustee
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
Date:
---------------------------------
C-2-1
<PAGE>
EXHIBIT D
FORM OF CREDIT LINE AGREEMENT
D-1
<PAGE>
EXHIBIT E
FORM OF MORTGAGE NOTE FOR
SECOND LIEN MORTGAGE LOANS
E-1
<PAGE>
EXHIBIT 4.2
EXECUTION COPY
================================================================================
TRUST AGREEMENT
between
GREENPOINT MORTGAGE SECURITIES INC.
Sponsor
and
WILMINGTON TRUST COMPANY
Owner Trustee
Dated as of December 1, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I Definitions.............................................................................................1
SECTION 1.1. Defined Terms.................................................................................1
SECTION 1.2. Other Definitional Provisions.................................................................2
SECTION 1.3. Action by or Consent of Noteholders and Certificateholders....................................2
ARTICLE II Organization...........................................................................................3
SECTION 2.1. Name 3
SECTION 2.2. Office........................................................................................3
SECTION 2.3. Purposes and Powers...........................................................................3
SECTION 2.4. Appointment of Owner Trustee..................................................................4
SECTION 2.5. Initial Capital Contribution of Trust Estate..................................................4
SECTION 2.6. Declaration of Trust..........................................................................4
SECTION 2.7. Liability.....................................................................................4
SECTION 2.8. Title to Trust Property.......................................................................4
SECTION 2.9. Situs of Trust................................................................................5
SECTION 2.10. Representations and Warranties of the Sponsor.................................................5
SECTION 2.11. Federal Income Tax Allocations................................................................6
SECTION 2.12. Covenants of the Sponsor......................................................................7
SECTION 2.13. Covenants of the Certificateholders...........................................................7
ARTICLE III Certificates and Transfer of Interests................................................................8
SECTION 3.1. Initial Ownership.............................................................................8
SECTION 3.2. The Certificates..............................................................................8
SECTION 3.3. Authentication of Certificates................................................................9
SECTION 3.4. Registration of Transfer and Exchange of Certificates.........................................9
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates.............................................9
SECTION 3.6. Persons Deemed Certificateholders............................................................10
SECTION 3.7. Access to List of Certificateholders' Names and Addresses....................................10
SECTION 3.8. Maintenance of Office or Agency..............................................................10
SECTION 3.9. ERISA Restrictions...........................................................................11
SECTION 3.10. Restrictions on Transfer of Certificates.....................................................11
SECTION 3.11. Acceptance of Obligations....................................................................12
SECTION 3.12. Distributions on Certificates................................................................12
ARTICLE IV Voting Rights and Other Actions.......................................................................12
SECTION 4.1. Prior Notice to Holders with Respect to Certain Matters......................................12
SECTION 4.2. Action by Certificateholders with Respect to Certain Matters.................................13
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy......................................13
SECTION 4.4. Restrictions on Certificateholders' Power....................................................14
SECTION 4.5. Majority Control.............................................................................14
</TABLE>
i
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<TABLE>
<S> <C>
SECTION 4.6. Rights of Insurer............................................................................14
ARTICLE V Certain Duties.........................................................................................15
SECTION 5.1. Accounting and Records to the Noteholders, Certificateholders, the Internal Revenue
Service and Others...........................................................................15
SECTION 5.2. Signature on Returns; Tax Matters Partner....................................................15
SECTION 5.3. Underwriting Agreement.......................................................................15
ARTICLE VI Authority and Duties of Owner Trustee.................................................................16
SECTION 6.1. General Authority............................................................................16
SECTION 6.2. General Duties...............................................................................16
SECTION 6.3. Action upon Instruction......................................................................16
SECTION 6.4. No Duties Except as Specified in this Agreement or in Instructions...........................17
SECTION 6.5. No Action Except under Specified Documents or Instructions...................................18
SECTION 6.6. Restrictions.................................................................................18
ARTICLE VII Concerning the Owner Trustee.........................................................................18
SECTION 7.1. Acceptance of Trust and Duties...............................................................18
SECTION 7.2. Furnishing of Documents......................................................................19
SECTION 7.3. Representations and Warranties...............................................................19
SECTION 7.4. Reliance; Advice of Counsel..................................................................20
SECTION 7.5. Not Acting in Individual Capacity............................................................20
SECTION 7.6. Owner Trustee Not Liable for Certificates or Mortgage Loans..................................20
SECTION 7.7. Owner Trustee May Own Certificates and Notes.................................................21
SECTION 7.8. Payments from Owner Trust Estate.............................................................21
SECTION 7.9. Doing Business in Other Jurisdictions........................................................21
ARTICLE VIII Compensation of Owner Trustee.......................................................................21
SECTION 8.1. Owner Trustee's Fees and Expenses............................................................21
SECTION 8.2. Indemnification..............................................................................21
SECTION 8.3. Payments to the Owner Trustee................................................................22
SECTION 8.4. Non-recourse Obligations.....................................................................22
ARTICLE IX Termination of Trust Agreement........................................................................22
SECTION 9.1. Termination of Trust Agreement...............................................................22
ARTICLE X Successor Owner Trustees and Additional Owner Trustees.................................................23
SECTION 10.1. Eligibility Requirements for Owner Trustee...................................................23
SECTION 10.2. Resignation or Removal of Owner Trustee......................................................24
SECTION 10.3. Successor Owner Trustee......................................................................25
SECTION 10.4. Merger or Consolidation of Owner Trustee.....................................................25
SECTION 10.5. Appointment of Co-Owner Trustee or Separate Owner Trustee....................................25
</TABLE>
ii
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<TABLE>
<S> <C>
ARTICLE XI Miscellaneous.........................................................................................27
SECTION 11.1. Supplements and Amendments...................................................................27
SECTION 11.2. No Legal Title to Owner Trust Estate in Certificateholders...................................28
SECTION 11.3. Limitations on Rights of Others..............................................................28
SECTION 11.4. Notices......................................................................................28
SECTION 11.5. Severability.................................................................................29
SECTION 11.6. Separate Counterparts........................................................................29
SECTION 11.7. Assignments; Insurer.........................................................................29
SECTION 11.8. No Petition..................................................................................29
SECTION 11.9. No Recourse..................................................................................29
SECTION 11.10. Headings.....................................................................................30
SECTION 11.11. GOVERNING LAW................................................................................30
SECTION 11.12. Servicer.....................................................................................30
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
</TABLE>
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TRUST AGREEMENT dated as of December 1, 1999 (the "Agreement")
between GREENPOINT MORTGAGE SECURITIES INC., a Delaware corporation (the
"Sponsor"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation as
Owner Trustee.
ARTICLE I
Definitions
SECTION 1.1. Defined Terms. For the purposes of this
Agreement, the following terms shall have the meanings set forth below. All
other capitalized terms used herein but not defined shall have the meanings set
forth in Annex A to the Indenture dated as of December 1, 1999, between the
Issuer and the Indenture Trustee, as the same may be amended and supplemented
from time to time.
"Affiliate" shall mean with respect to any specified Person, a
Person that directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, or owns, directly or
indirectly, 50% or more of, the Person specified.
"Agreement" shall mean this Trust Agreement, as the same may
be amended and supplemented from time to time.
"Benefit Plan" shall have the meaning assigned to such term in
Section 3.9.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code Section 3801 et seq. as the same may be amended
from time to time.
"Certificate" shall mean a trust certificate evidencing the
beneficial ownership interest of a Certificateholder in the Trust, substantially
in the form of Exhibit A attached hereto.
"Certificate of Trust" shall mean the Certificate of Trust in
the form of Exhibit B to be filed for the Trust pursuant to Section 3810(a) of
the Business Trust Statute.
"Certificate Register" and "Certificate Registrar" shall mean
the register maintained and the registrar respectively appointed pursuant to
Section 3.4.
"Definitive Certificates" shall mean Certificates issued in
certificated, fully registered form.
"Expenses" shall have the meaning assigned to such term in
Section 8.2.
"Holder" or "Certificateholder" shall mean the Person in whose
name a Certificate is registered on the Certificate Register.
"Indemnified Parties" shall have the meaning assigned to such
term in Section 8.2.
"Instructing Party" shall have the meaning assigned to such
term in Section 6.3.
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"Owner Trust Estate" shall mean all right, title and interest
of the Trust in and to the property and rights assigned to the Trust pursuant to
Article II of the Sale and Servicing Agreement, all funds on deposit from time
to time in the Collection Account and all other property of the Trust from time
to time, including any rights of the Issuer pursuant to the Sale and Servicing
Agreement.
"Proposer" shall have the meaning ascribed to it in Section
4.2(b) herein.
"Secretary of State" shall mean the Secretary of State of the
State of Delaware.
"Security Majority" means a majority by principal amount of
the Noteholders so long as the Notes are outstanding and a majority by principal
amount of the Certificateholders thereafter.
"Treasury Regulations" shall mean regulations, including
proposed or temporary regulations, promulgated under the Code. References herein
to specific provisions of proposed or temporary regulations shall include
analogous provisions of final Treasury Regulations or other successor Treasury
Regulations.
SECTION 1.2. Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto unless otherwise defined therein.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles as in effect on the
date of this Agreement or any such certificate or other document, as applicable.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
(c) The words "hereof," "herein," "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement; Section and Exhibit
references contained in this Agreement are references to Sections and Exhibits
in or to this Agreement unless otherwise specified; and the term "including"
shall mean "including without limitation."
(d) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine
as well as to the feminine and neuter genders of such terms.
SECTION 1.3. Action by or Consent of Noteholders and
Certificateholders. Whenever any provision of this Agreement refers to action to
be taken, or consented to, by
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Noteholders or Certificateholders, such provision shall be deemed to refer to
the Certificateholder or Noteholder, as the case may be, of record as of the
Record Date immediately preceding the date on which such action is to be taken,
or consent given, by Noteholders or Certificateholders. Solely for the purposes
of any action to be taken, or consented to, by Noteholders or
Certificateholders, any Note or Certificate registered in the name of the
Sponsor or any Affiliate thereof shall be deemed not to be outstanding;
provided, however, that, solely for the purpose of determining whether the
Indenture Trustee is entitled to rely upon any such action or consent, only
Notes or Certificates which the Owner Trustee, or the Indenture Trustee,
respectively, knows to be so owned shall be so disregarded.
ARTICLE II
Organization
SECTION 2.1. Name. There is hereby formed a trust to be known
as "GreenPoint Home Equity Loan Trust 1999-2", in which name the Owner Trustee
may conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
SECTION 2.2. Office. The office of the Trust shall be in
the care of the Owner Trustee at the Corporate ------ Trust Office or at such
other address as the Owner Trustee may designate by written notice to the
Certificateholders and the Sponsor.
SECTION 2.3. Purposes and Powers.
(a) The purpose of the Trust is, and the Trust shall have the
power and authority, to engage in the following activities:
(i) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement, and to sell the Notes;
(ii) to assign, grant, transfer, pledge, mortgage and convey
the Owner Trust Estate to the Indenture Trustee on behalf of the
Noteholders and for the benefit of the Insurer and to hold, manage and
distribute to the Certificateholders pursuant to the terms of the Sale
and Servicing Agreement any portion of the Owner Trust Estate released
from the Lien of, and remitted to the Trust pursuant to, the Indenture;
(iii) with the proceeds of the sale of the Notes, to fund the
Pre-Funding Account and to pay the organizational, start-up and
transactional expenses of the Trust and to pay the balance to the
Sponsor pursuant to the Sale and Servicing Agreement;
(iv) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(v) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
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(vi) subject to compliance with the Basic Documents, to engage
in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Certificateholders and the Noteholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the Basic
Documents.
SECTION 2.4 Appointment of Owner Trustee. The Sponsor hereby
appoints the Owner Trustee as trustee of the Trust effective as of the date
hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5. Initial Capital Contribution of Trust Estate.
The Sponsor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Sponsor, as of the date hereof, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Collection Account. On or prior to the Closing
Date, the Owner Trustee will also, upon receipt thereof, acknowledge on behalf
of the Trust receipt of the Mortgage Loans pursuant to the Sale and Servicing
Agreement. The Sponsor shall pay organizational expenses of the Trust as they
may arise or shall, upon the request of the Owner Trustee, promptly reimburse
the Owner Trustee for any such expenses paid by the Owner Trustee.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject to
the conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that the Trust constitute a
business trust under the Business Trust Statute and that this Agreement
constitute the governing instrument of such business trust. It is the intention
of the parties hereto that, solely for income tax purposes, the Trust shall be
treated as a branch; provided, however, that in the event Certificates are owned
by more than one Certificateholder, it is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Trust shall then be
treated as a partnership and that, unless otherwise required by appropriate tax
authorities, only after such time the Trust will file or cause to be filed
annual or other necessary returns, reports and other forms consistent with the
characterization of the Trust as a partnership for such tax purposes. Effective
as of the date hereof, the Owner Trustee shall have all rights, powers and
duties set forth herein and to the extent not inconsistent herewith, in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee shall file the Certificate of Trust with the Secretary of
State.
SECTION 2.7. Liability. No Holder shall have any personal
liability for any liability or obligation of the Trust.
SECTION 2.8. Title to Trust Property.
(a) Legal title to all the Owner Trust Estate shall be vested
at all times in the Trust as a separate legal entity except where applicable law
in any jurisdiction requires title to
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any part of the Owner Trust Estate to be vested in a trustee or trustees, in
which case title shall be deemed to be vested in the Owner Trustee, a co-trustee
and/or a separate trustee, as the case may be.
(b) The Holders shall not have legal title to any part of the
Trust Property. The Holders shall be entitled to receive distributions with
respect to their undivided ownership interest therein only in accordance with
Article IX. No transfer, by operation of law or otherwise, of any right, title
or interest by any Certificateholder of its ownership interest in the Owner
Trust Estate shall operate to terminate this Agreement or the trusts hereunder
or entitle any transferee to an accounting or to the transfer to it of legal
title to any part of the Trust Property.
SECTION 2.9. Situs of Trust. The Trust will be located and
administered in the State of Delaware. All bank accounts maintained by the Owner
Trustee on behalf of the Trust shall be located in the State of Delaware or the
State of New York. Payments will be received by the Trust only in Delaware or
New York and payments will be made by the Trust only from Delaware or New York.
The Trust shall not have any employees in any state other than Delaware;
provided, however, that nothing herein shall restrict or prohibit the Owner
Trustee, the Servicer or any agent of the Trust from having employees within or
without the State of Delaware. The only office of the Trust will be at the
Corporate Trust Office in Delaware.
SECTION 2.10. Representations and Warranties of the Sponsor.
The Sponsor makes the following representations and warranties on which the
Owner Trustee relies in accepting the Owner Trust Estate in trust and issuing
the Certificates and upon which the Insurer relies in issuing the Policy.
(a) The Sponsor is duly organized and validly existing as a
Delaware corporation with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
presently conducted and is proposed to be conducted pursuant to this Agreement
and the Basic Documents;
(b) It is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals, in all jurisdictions in which the ownership or lease of its property,
the conduct of its business and the performance of its obligations under this
Agreement and the Basic Documents requires such qualification;
(c) The Sponsor has the corporate power and authority to
execute and deliver this Agreement and to carry out its terms; the Sponsor has
full power and authority to sell and assign the property to be sold and assigned
to and deposited with the Trust and the Sponsor has duly authorized such sale
and assignment and deposit to the Trust by all necessary corporate action; and
the execution, delivery and performance of this Agreement has been duly
authorized by the Sponsor by all necessary corporate action;
(d) No consent, license, approval or authorization or
registration or declaration with, any Person or with any governmental authority,
bureau or agency is required in
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connection with the execution, delivery or performance of this Agreement and the
Basic Documents, except for such as have been obtained, effected or made;
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under, the certificate of
incorporation or by-laws of the Sponsor, or any material indenture, agreement or
other instrument to which the Sponsor is a party or by which it is bound; nor
result in the creation or imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture, agreement or other instrument
(other than pursuant to the Basic Documents); nor violate any law or, to the
best of the Sponsor's knowledge, any order, rule or regulation applicable to the
Sponsor of any court or of any Federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the
Sponsor or its properties; and
(f) There are no proceedings or investigations pending or, to
its knowledge threatened against it before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality having
jurisdiction over it or its properties (A) asserting the invalidity of this
Agreement or any of the Basic Documents, (B) seeking to prevent the issuance of
the Certificates or the Notes or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (C) seeking any
determination or ruling that might materially and adversely affect its
performance of its obligations under, or the validity or enforceability of, this
Agreement or any of the Basic Documents, or (D) seeking to adversely affect the
federal income tax or other federal, state or local tax attributes of the Notes
or the Certificates.
SECTION 2.11. Federal Income Tax Allocations. In the event
that the Trust is treated as a partnership for Federal income tax purposes, net
income of the Trust for any month as determined for Federal income tax purposes
(and each item of income, gain, loss, credit and deduction entering into the
computation thereof) shall be allocated:
(a) to the extent of available net income, among the
Certificateholders as of the first Record Date following the end of such month,
in proportion to their ownership of principal amount of Certificates on such
date; and
(b) to the Sponsor, to the extent of any remaining net income.
If the net income of the Trust for any month is insufficient for the allocations
described in clause (a) above, subsequent net income shall first be allocated to
make up such shortfall before being allocated as provided in clause (b). Net
losses of the Trust, if any, for any month as determined for Federal income tax
purposes (and each item of income, gain, loss, credit and deduction entering
into the computation thereof) shall be allocated among the Certificateholders as
of the Record Date in proportion to their ownership percentage of principal
amount of Certificates on such Record Date until the principal balance of the
Certificates is reduced to zero. The Sponsor is authorized to modify the
allocations in this paragraph if necessary or appropriate, in its sole
discretion, for the allocations to fairly reflect the economic income, gain or
loss to the Certificateholders, or as otherwise required by the Code.
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SECTION 2.12. Covenants of the Sponsor. The Sponsor agrees and
covenants for the benefit of each Certificateholder, the Insurer and the Owner
Trustee, during the term of this Agreement, and to the fullest extent permitted
by applicable law, that:
(a) it shall not create, incur or suffer to exist any
indebtedness or engage in any business, except, in each case, as permitted by
its certificate of incorporation and the Basic Documents;
(b) it shall not, for any reason, institute proceedings for
the Trust to be adjudicated a bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against the Trust, or file a
petition seeking or consenting to reorganization or relief under any applicable
federal or state law relating to the bankruptcy of the Trust, or consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the
Trust or cause or permit the Trust to make any assignment for the benefit of
creditors, or admit in writing the inability of the Trust to pay its debts
generally as they become due, or declare or effect a moratorium on the debt of
the Trust or take any action in furtherance of any such action;
(c) it shall obtain from each counterparty to each Basic
Document to which it or the Trust is a party and each other agreement entered
into on or after the date hereof to which it or the Trust is a party, an
agreement by each such counterparty that prior to the occurrence of the event
specified in Section 9.1(e) such counterparty shall not institute against, or
join any other Person in instituting against, it or the Trust, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings or other
similar proceedings under the laws of the United States or any state of the
United States; and
(d) it shall not, for any reason, withdraw or attempt to
withdraw from this Agreement, dissolve, institute proceedings for it to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against it, or file a petition seeking or consenting
to reorganization or relief under any applicable federal or state law relating
to bankruptcy, or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of it or a
substantial part of its property, or make any assignment for the benefit of
creditors, or admit in writing its inability to pay its debts generally as they
become due, or declare or effect a moratorium on its debt or take any action in
furtherance of any such action.
SECTION 2.13. Covenants of the Certificateholders. Each
Certificateholder agrees:
(a) to be bound by the terms and conditions of the
Certificates and of this Agreement, including any supplements or amendments
hereto and to perform the obligations of a Certificateholder as set forth
therein or herein, in all respects as if it were a signatory hereto. This
undertaking is made for the benefit of the Trust, the Owner Trustee, the Insurer
and all other Certificateholders present and future;
(b) to hereby appoint the Sponsor as such Certificateholder's
agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Trust, if
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any, and agree that, if requested by the Trust, it will sign such federal income
tax information return in its capacity as holder of an interest in the Trust.
Each Certificateholder also hereby agrees that in its tax returns it will not
take any position inconsistent with those taken in any tax returns that may be
filed by the Trust;
(c) if such Certificateholder is other than an individual or
other entity holding its Certificate through a broker who reports securities
sales on Form 1099-B, to notify the Owner Trustee of any transfer by it of a
Certificate in a taxable sale or exchange, within 30 days of the date of the
transfer; and
(d) until the completion of the events specified in Section
9.1(e), not to, for any reason, institute proceedings for the Trust or the
Sponsor to be adjudicated a bankrupt or insolvent, or consent to the institution
of bankruptcy or insolvency proceedings against the Trust, or file a petition
seeking or consenting to reorganization or relief under any applicable federal
or state law relating to bankruptcy, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Sponsor or the Trust or a substantial part of its property, or
cause or permit the Sponsor or the Trust to make any assignment for the benefit
of its creditors, or admit in writing its inability to pay its debts generally
as they become due, or declare or effect a moratorium on its debt or take any
action in furtherance of any such action.
Except as provided in Section 2.13, and notwithstanding any
other provision to the contrary in this Agreement, no Certificateholder other
than the Sponsor in its capacity as the "Sponsor" shall be deemed to have
adopted, be bound by, or succeed in any way to any representation by, or duty of
indemnification by or any other duty of, the Sponsor, including those contained
in Sections 2.10, 2.12, 3.6, 8.2 or elsewhere herein.
ARTICLE III
Certificates and Transfer of Interests
SECTION 3.1. Initial Ownership. Upon the formation of the
Trust by the contribution by the Sponsor pursuant to Section 2.5, the Owner
Trustee, contemporaneously therewith, having full power, authority, and
authorization to do so, has executed, authenticated, dated, issued, and
delivered, in the name and on behalf of the Trust, to the Sponsor, one (1) or
more Certificates representing in the aggregate a 100% interest in the Trust,
and has registered such Certificate(s) on the Certificate Register in the name
of the Sponsor. The Sponsor shall be the sole beneficiary of the Trust. Such
Certificate(s) are duly authorized, validly issued, and entitled to the benefits
of this Agreement. For so long as the Sponsor shall own such 100% interest in
the Trust, the Sponsor shall be the sole beneficial owner of the Trust. The
Sponsor shall at all times keep and own a Certificate or Certificates
representing no less than 1% interest, and at no time will the Sponsor sell or
alienate its interest represented by Certificate(s) in such a way as to reduce
its aggregate beneficial ownership in the Trust to less than 1%.
SECTION 3.2. The Certificates. The Certificates shall be
issued in denominations of $1,000 and integral multiples of $1000 in excess
thereof. The Certificates shall be executed on behalf of the Trust by manual or
facsimile signature of an authorized officer of the Owner Trustee. Certificates
bearing the manual or facsimile signatures of individuals who
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were, at the time when such signatures shall have been affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled to the benefit
of this Agreement, notwithstanding that such individuals or any of them shall
have ceased to be so authorized prior to the authentication and delivery of such
Certificates or did not hold such offices at the date of authentication and
delivery of such Certificates. A transferee of a Certificate shall become a
Certificateholder, and shall be entitled to the rights and subject to the
obligations of a Certificateholder hereunder, upon due registration of such
Certificate in such transferee's name pursuant to Section 3.4.
SECTION 3.3. Authentication of Certificates. Concurrently
with the initial sale of the Mortgage Loans to the Trust pursuant to the Sale
and Servicing Agreement, the Owner Trustee shall cause the Certificates to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Sponsor, signed by its chairman of the board, its president
or any vice president, its treasurer or any assistant treasurer without further
corporate action by the Sponsor, in authorized denominations. No Certificate
shall entitle its holder to any benefit under this Agreement, or shall be valid
for any purpose, unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A, executed by the
Owner Trustee, by manual signature; such authentication shall constitute
conclusive evidence that such Certificate shall have been duly authenticated and
delivered hereunder. All Certificates shall be dated the date of their
authentication.
SECTION 3.4. Registration of Transfer and Exchange of
Certificates. The Certificate Registrar shall keep or cause to be kept, at the
office or agency maintained pursuant to Section 3.8, a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the Owner
Trustee shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Owner Trustee shall be the
initial Certificate Registrar.
In furtherance of and not in limitation of the foregoing, each
Certificateholder, by acceptance of its Certificate, specifically acknowledges
that it has no right to or interest in any monies at any time held in the
Reserve Fund or the Pre-Funding Account prior to the release of such monies
pursuant to Section 8.6(d)(ix) of the Indenture, such monies being held in trust
for the benefit of the Noteholders and the Insurer. Notwithstanding the
foregoing, in the event that it is ever determined that the monies held in the
Reserve Fund or the Pre-Funding Account constitute a pledge of collateral, then
the provisions of the Sale and Servicing Agreement shall be considered to
constitute a security agreement and the Sponsor and the Certificateholders
hereby grant to the Indenture Trustee and the Insurer a first priority perfected
security interest in such amounts. In addition, each Certificateholder, by
acceptance of its Certificate, hereby appoints the Sponsor as its agent to
pledge a first priority perfected security interest in the Reserve Fund and the
Pre-Funding Account, and any amounts held therein from time to time to the
Indenture Trustee and the Insurer and agrees to execute and deliver such
instruments of conveyance, assignment, grant, confirmation, etc., as well as any
financing statements, in each case as the Insurer shall consider reasonably
necessary in order to perfect the Indenture Trustee's security interest in the
Mortgage Loans.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate shall be surrendered to the
Certificate
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Registrar, or if the Certificate Registrar shall receive evidence to its
satisfaction of the destruction, loss or theft of any Certificate and (b) there
shall be delivered to the Certificate Registrar, the Owner Trustee and the
Insurer such security or indemnity as may be required by them to save each of
them harmless, then in the absence of notice that such Certificate shall have
been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Trust
shall execute and the Owner Trustee shall authenticate and deliver, in exchange
for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a
new Certificate of like class, tenor and denomination. In connection with the
issuance of any new Certificate under this Section, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
SECTION 3.6. Persons Deemed Certificateholders. Every Person
by virtue of becoming a Certificateholder in accordance with this Agreement and
the rules and regulations of the Certificate Registrar shall be deemed to be
bound by the terms of this Agreement. Prior to due presentation of a Certificate
for registration of transfer, the Owner Trustee, the Certificate Registrar and
the Insurer and any agent of the Owner Trustee, the Certificate Registrar and
the Insurer, may treat the Person in whose name any Certificate shall be
registered in the Certificate Register as the owner of such Certificate for the
purpose of receiving distributions pursuant to the Sale and Servicing Agreement
and the Indenture and for all other purposes whatsoever, and none of the Owner
Trustee, the Certificate Registrar or the Insurer nor any agent of the Owner
Trustee, the Certificate Registrar or the Insurer shall be bound by any notice
to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer, the Sponsor or the Insurer, within 15 days after receipt by the Owner
Trustee of a request therefor from such Person in writing, a list, of the names
and addresses of the Certificateholders as of the most recent Record Date. If
three or more Holders of Certificates or one or more Holders of Certificates
evidencing not less than 25% by Percentage Interest apply in writing to the
Owner Trustee, and such application states that the applicants desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and such application is accompanied by
a copy of the communication that such applicants propose to transmit, then the
Owner Trustee shall, within five Business Days after the receipt of such
application, afford such applicants access during normal business hours to the
current list of Certificateholders. Each Holder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Sponsor, the
Servicer, the Owner Trustee or the Insurer or any agent thereof accountable by
reason of the disclosure of its name and address, regardless of the source from
which such information was derived.
SECTION 3.8. Maintenance of Office or Agency. The Owner
Trustee shall maintain in Wilmington, Delaware an office or offices or agency or
agencies where Certificates may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Owner Trustee in respect
of the Certificates and the Basic Documents may be served. The Owner Trustee
initially designates its Corporate Trust Office for such purposes. The Owner
Trustee shall give prompt written notice to the Sponsor, the Certificateholders
and the Insurer of any change in the location of the Certificate Register or any
such office or agency.
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SECTION 3.9. ERISA Restrictions. The Certificates may not be
acquired by or for the account of (i) an employee benefit plan (as defined in
Section 3(3) of ERISA that is subject to the provisions of Title I of ERISA,
(ii) a plan described in Section 4975(e)(1) of the Internal Revenue Code of
1986, as amended, or (iii) any entity whose underlying assets include plan
assets by reason of a plan's investment in the entity (each, a "Benefit Plan").
By accepting and holding its beneficial ownership interest in its Certificate,
the Holder thereof shall be deemed to have represented and warranted that it is
not a Benefit Plan.
SECTION 3.10. Restrictions on Transfer of Certificates.
(a) The Certificates shall be assigned, transferred,
exchanged, pledged, financed, hypothecated or otherwise conveyed (collectively,
for purposes of this Section 3.10 and any other Section referring to the
Certificates, "transferred" or a "transfer") only in accordance with this
Section 3.10.
(b) No transfer of a Certificate shall be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. Except for the initial issuance of the
Certificate to the Sponsor, the Indenture Trustee shall require (i) the
transferee to execute an investment letter acceptable to and in form and
substance satisfactory to the Indenture Trustee and the Insurer certifying to
the Indenture Trustee and the Insurer the facts surrounding such transfer, which
investment letter shall not be an expense of the Indenture Trustee or the
Insurer or (ii) if the investment letter is not delivered, a written Opinion of
Counsel acceptable to and in form and substance satisfactory to the Indenture
Trustee, the Insurer and the Sponsor that such transfer may be made pursuant to
an exemption, describing the applicable exemption and the basis therefor from
said Act or is being made pursuant to said Act, which Opinion of Counsel shall
not be an expense of the Indenture Trustee, the Insurer or the Sponsor. The
Holder of a Certificate desiring to effect such transfer shall, and does hereby
agree to, indemnify the Sponsor and the Insurer against any liability that may
result if the transfer is not so exempt or is not made in accordance with such
federal and state laws.
(c) The Certificate and any interest therein shall not be
transferred except upon satisfaction of the following conditions precedent: (i)
the Person that acquires a Certificate shall (A) be organized and existing under
the laws of the United States of America or any state thereof or the District of
Columbia; (B) expressly assume, by an agreement supplemental hereto, executed
and delivered to the Indenture Trustee and the Insurer, the performance of every
covenant and obligation of the Sponsor hereunder and (C) as part of its
acquisition of a Certificate, acquire all rights of the Sponsor or any
transferee under this Section 3.10(c) to amounts payable to such Sponsor or such
transferee under Section 8.6(d)(xiii) of the Indenture; (ii) the Holder of the
Certificates shall deliver to the Indenture Trustee and the Insurer an Officer's
Certificate stating that such transfer and such supplemental agreement comply
with this Section 3.10(c) and that all conditions precedent provided by this
Section 3.10(c) have been complied with and an Opinion of Counsel stating that
all conditions precedent provided by this Section 3.10(c) have been complied
with, and the Indenture Trustee may conclusively rely on such Officer's
Certificate, shall have no duty to make inquiries with regard to the matters set
forth therein and shall incur no liability in so relying; (iii) the Holder of
the Certificates shall deliver to the Indenture Trustee and the Insurer a letter
from each Rating Agency confirming that
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its rating of the Notes, after giving effect to such transfer, will not be
reduced or withdrawn without regard to the Policy; (iv) the transferee of the
Certificates shall deliver to the Indenture Trustee and the Insurer an Opinion
of Counsel to the effect that (a) such transfer will not adversely affect the
treatment of the Notes after such transfer as debt for federal and applicable
state income tax purposes, (b) such transfer will not result in the Trust being
subject to tax at the entity level for federal or applicable state tax purposes,
(c) such transfer will not have any material adverse impact on the federal or
applicable state income taxation of a Noteholder or any Certificateholder and
(d) such transfer will not result in the arrangement created by this Agreement
or any "portion" of the Trust, being treated as a taxable mortgage pool as
defined in Section 7701(i) of the Code; (v) all filings and other actions
necessary to continue the perfection of the interest of the Trust in the
Mortgage Loans and the other property conveyed hereunder shall have been taken
or made and (vi) the Insurer shall have consented to such transfer.
Notwithstanding the foregoing, the requirement set forth in subclause (i)(A) of
this Section 3.10(c) shall not apply in the event the Indenture Trustee shall
have received a letter from each Rating Agency confirming that its rating of the
Notes, after giving effect to a proposed transfer to a Person that does not meet
the requirement set forth in subclause (i)(A), shall not be reduced or withdrawn
without regard to the Policy. Notwithstanding the foregoing, the requirements
set forth in this paragraph (c) shall not apply to the initial issuance of the
Certificates to the Sponsor.
Except for the initial issuance of the Certificate to the
Sponsor, no transfer of a Certificate shall be made unless the Indenture Trustee
and the Insurer shall have received a representation letter from the transferee
of such Certificate, acceptable to and in form and substance satisfactory to the
Indenture Trustee and the Insurer, to the effect that such transferee is not a
Benefit Plan, nor a Person acting on behalf of or using the assets of a Benefit
Plan, which representation letter shall not be an expense of the Indenture
Trustee or the Insurer.
(d) No transfer or pledge of the Certificates shall result in
more than 98 other holders of Certificates.
SECTION 3.11. Acceptance of Obligations. The Sponsor, by its
acceptance of the Certificates, agrees to be bound by and to perform all the
duties of the Sponsor set forth in this Agreement.
SECTION 3.12. Distributions on Certificates. The Holders of
the Certificates will be entitled to distributions on each Payment Date, as
provided in the Sale and Servicing Agreement and the Indenture.
ARTICLE IV
Voting Rights and Other Actions
SECTION 4.1. Prior Notice to Holders with Respect to Certain
Matters. With respect to the following matters, the Owner Trustee shall not take
action unless at least 30 days before the taking of such action, the Owner
Trustee shall have notified the Certificateholders in writing of the proposed
action and the Certificateholders shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
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(a) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed under the
Business Trust Statute or unless such amendment would not materially and
adversely affect the interests of the Holders);
(b) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is required;
(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the Certificateholders;
or
(d) except pursuant to Section 9.01 of the Sale and Servicing
Agreement, the amendment, change or modification of the Sale and Servicing
Agreement, except to cure any ambiguity or defect or to amend or supplement any
provision in a manner that would not materially adversely affect the interests
of the Certificateholders.
The Owner Trustee shall notify the Certificateholders in writing of any
appointment of a successor Note Registrar, or Certificate Registrar within five
Business Days thereof.
SECTION 4.2. Action by Certificateholders with Respect to
Certain Matters.
(a) The Owner Trustee shall not have the power, except upon
the direction of the Insurer, to (i) remove the Servicer under the Sale and
Servicing Agreement or (ii) except as expressly provided in the Basic Documents,
sell the Mortgage Loans after the termination of the Indenture. The Owner
Trustee shall take the actions referred to in the preceding sentence only upon
written instructions signed by the Insurer or the Securityholders, and the
furnishing of indemnification satisfactory to the Owner Trustee by the
Certificateholders.
(b) Upon the written request of any Certificateholder (a
"Proposer"), the Owner Trustee shall distribute promptly to all
Certificateholders any request for action or consent of Certificateholders
submitted by such Proposer, with a copy to the Manager. The Owner Trustee shall
provide a reasonable method for collecting responses to such request and shall
tabulate and report the results thereof to the Certificateholders and the
Manager. The Owner Trustee shall have no responsibility or duty to determine if
any such proposed action or consent is permitted under the terms of this
Agreement or applicable law.
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy. Until one year and one day following the day on which the Notes have
been paid in full, the Owner Trustee shall not have the power to, and shall not,
commence any proceeding or other actions contemplated by Section 2.12(b)
relating to the Trust without the prior written consent of the Insurer. Until
one year and one day following the day on which the Notes have been paid in
full, all amounts due to the Insurer under the Insurance Agreement have been
paid in full, the Policy has terminated and the Indenture Trustee has
surrendered the Policy to the Insurer, the Owner Trustee shall not have the
power to, and shall not, commence any proceeding or other actions contemplated
by Section 2.12(b) relating to the Trust without the prior written consent of
all of the Certificateholders and the delivery to the Owner Trustee by each such
Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that the Trust is insolvent.
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SECTION 4.4. Restrictions on Certificateholders' Power.
(a) The Certificateholders shall not direct the Owner Trustee
to take or refrain from taking any action if such action or inaction would be
contrary to any obligation of the Trust or the Owner Trustee under this
Agreement or any of the Basic Documents or would be contrary to Section 2.3 or
otherwise contrary to law nor shall the Owner Trustee be obligated to follow any
such direction, if given.
(b) No Certificateholder (other than the Sponsor as sole
Certificateholder) shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to this Agreement or any Basic
Document, unless the Certificateholders are the Instructing Party pursuant to
Section 6.3 and unless a Certificateholder previously shall have given to the
Owner Trustee a written notice of default and of the continuance thereof, as
provided in this Agreement, and also unless Certificateholders evidencing not
less than 25% by Percentage Interest shall have made written request upon the
Owner Trustee to institute such action, suit or proceeding in its own name as
Owner Trustee under this Agreement and shall have offered to the Owner Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Owner Trustee, for 30
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, and
during such 30-day period no request or waiver inconsistent with such written
request has been given to the Owner Trustee pursuant to and in compliance with
this Section or Section 6.3; it being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Owner Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue or by
availing itself or themselves of any provisions of this Agreement to affect,
disturb, or prejudice the rights of the Holders of any other of the
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 provided in this Agreement and for the equal, ratable, and common benefit
of all Certificateholders. For the protection and enforcement of the provisions
of this Section 4.4, each and every Certificateholder and the Owner Trustee
shall be entitled to such relief as can be given either at law or in equity.
SECTION 4.5. Majority Control. No Certificateholder shall
have any right to vote or in any manner otherwise control the operation and
management of the Trust except as expressly provided in this Agreement. Except
as expressly provided herein, any action that may be taken by the
Certificateholders under this Agreement may be taken by the Holders of
Certificates evidencing not less than a majority interest in the Trust. Except
as expressly provided herein, any written notice of the Certificateholders
delivered pursuant to this Agreement shall be effective if signed by
Certificateholders evidencing not less than a majority interest in the Trust at
the time of the delivery of such notice.
SECTION 4.6. Rights of Insurer. Notwithstanding anything to
the contrary in the Basic Documents, without the prior written consent of the
Insurer the Owner Trustee shall not (i) remove the Servicer, (ii) initiate any
claim, suit or proceeding by the Trust or compromise any claim, suit or
proceeding brought by or against the Trust, other than with respect to the
enforcement of any Mortgage Loan or any rights of the Trust thereunder, (iii)
authorize the
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merger or consolidation of the Trust with or into any other business trust or
other entity, (iv) amend the Certificate of Trust or (v) amend this Agreement in
accordance with Section 11.1 of this Agreement.
ARTICLE V
Certain Duties
SECTION 5.1. Accounting and Records to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. Subject to Sections
8.01(b)(iii) and 8.01(c) of the Sale and Servicing Agreement, the Sponsor shall
(a) maintain (or cause to be maintained) the books of the Trust on a calendar
year basis on the accrual method of accounting, including, without limitation,
the allocations of net income under Section 2.11 hereof, (b) deliver (or cause
to be delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1, if applicable) to enable each Certificateholder to prepare its
Federal and state income tax returns, (c) file or cause to be filed, if
necessary, such tax returns relating to the Trust (including a partnership
information return, Form 1065), and direct the Owner Trustee or the Servicer, as
the case may be, to make such elections as may from time to time be required or
appropriate under any applicable state or Federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a branch, or if
applicable, as a partnership, for Federal income tax purposes and (d) collect or
cause to be collected any withholding tax as described in and in accordance with
Section 8.01(b)(ii) of the Sale and Servicing Agreement with respect to income
or distributions to Certificateholders and the appropriate forms relating
thereto. The Owner Trustee or the Servicer, as the case may be, shall make all
elections pursuant to this Section as directed in writing by the Sponsor. The
Owner Trustee shall sign all tax information returns, if any, filed pursuant to
this Section 5.1 and any other returns as may be required by law, and in doing
so shall rely entirely upon, and shall have no liability for information
provided by, or calculations provided by, the Sponsor or the Servicer. The
Sponsor will direct the Owner Trustee and the Owner Trustee shall elect under
Section 1278 of the Code to include in income currently any market discount that
accrues with respect to the Mortgage Loans. The Sponsor shall not direct the
Owner Trustee and the Owner Trustee shall not make the election provided under
Section 754 of the Code.
SECTION 5.2. Signature on Returns; Tax Matters Partner.
(a) Notwithstanding the provisions of Section 5.1 and in the
event that the Trust is characterized as a partnership, the Owner Trustee shall
sign on behalf of the Trust the tax returns of the Trust, unless applicable law
requires a Certificateholder to sign such documents, in which case such
documents shall be signed by the Sponsor.
(b) In the event that the Trust is characterized as a
partnership, the Sponsor shall be the "tax matters partner" of the Trust
pursuant to the Code.
SECTION 5.3. Underwriting Agreement. The Servicer is hereby
authorized to execute and deliver the Underwriting Agreement with respect to the
Notes.
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ARTICLE VI
Authority and Duties of Owner Trustee
SECTION 6.1. General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Basic Documents to which the
Trust is named as a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is named as
a party and any amendment thereto, in each case, in such form as the Sponsor
shall approve as evidenced conclusively by the Owner Trustee's execution
thereof, and on behalf of the Trust, to direct the Indenture Trustee to
authenticate and deliver Class A-1 Notes in the aggregate principal amount of
$193,275,000 and Class A-2 Notes in the aggregate principal amount of
$52,370,000. In addition to the foregoing, the Owner Trustee is authorized, but
shall not be obligated, to take all actions required of the Trust pursuant to
the Basic Documents. The Owner Trustee is further authorized from time to time
to take such action as the Instructing Party recommends with respect to the
Basic Documents so long as such activities are consistent with the terms of the
Basic Documents. The Owner Trustee may rely on the Manager to carry out any
action that the Owner Trustee is authorized or directed to perform hereunder, to
the extent permitted by the Management Agreement.
SECTION 6.2. General Duties. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and to administer the
Trust in the interest of the Holders, subject to the Basic Documents and in
accordance with the provisions of this Agreement. Notwithstanding the foregoing,
the Owner Trustee shall be deemed to have discharged its duties and
responsibilities hereunder and under the Basic Documents to the extent the
Servicer has agreed in the Sale and Servicing Agreement to perform any act or to
discharge any duty of the Trust or the Owner Trustee hereunder or under any
Basic Document, and the Owner Trustee shall not be liable for the default or
failure of the Servicer to carry out its obligations under the Sale and
Servicing Agreement or the failure of the Manager to carry out its obligations
under the Management Agreement.
SECTION 6.3. Action upon Instruction.
(a) Subject to Article IV, the Insurer (the "Instructing
Party") shall have the exclusive right to direct the actions of the Owner
Trustee in the management of the Trust, so long as such instructions are not
inconsistent with the express terms set forth herein or in any Basic Document.
The Instructing Party shall not instruct the Owner Trustee in a manner
inconsistent with this Agreement or the Basic Documents. In acting in accordance
with the direction of the Insurer pursuant to this Section or pursuant to
Article IV, the Owner Trustee shall not be deemed to (i) owe any fiduciary
obligation to the Insurer or (ii) have violated any fiduciary responsibility to
the Certificateholders.
(b) The Owner Trustee shall not be required to take any action
hereunder or under any Basic Document if the Owner Trustee shall have reasonably
determined, or shall have been advised by counsel, that such action is likely to
result in liability on the part of the Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law.
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(c) Whenever the Owner Trustee is unable to decide between
alternative courses of action permitted or required by the terms of this
Agreement or any Basic Document, the Owner Trustee shall promptly give notice
(in such form as shall be appropriate under the circumstances) to the
Instructing Party requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Instructing Party received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten days of
such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, notwithstanding any other provision of this
Agreement, take or refrain from taking such action, not inconsistent with this
Agreement or the Basic Documents, as it shall deem to be in the best interests
of the Certificateholders, and shall have no liability to any Person for such
action or inaction.
(d) In the event that the Owner Trustee is unsure as to the
application of any provision of this Agreement or any Basic Document or any such
provision is ambiguous as to its application, or is, or appears to be, in
conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to take
with respect to a particular set of facts, the Owner Trustee may give notice (in
such form as shall be appropriate under the circumstances) to the Instructing
Party requesting instruction and, notwithstanding any other provision of this
Agreement, to the extent that the Owner Trustee acts or refrains from acting in
good faith in accordance with any such instruction received, the Owner Trustee
shall not be liable, on account of such action or inaction, to any Person. If
the Owner Trustee shall not have received appropriate instruction within 10 days
of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the Basic Documents, as it shall deem to be
in the best interests of the Certificateholders, and shall have no liability to
any Person for such action or inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement
or in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which the Owner Trustee is a party, except as expressly provided by the terms
of this Agreement or in any document or written instruction received by the
Owner Trustee pursuant to Section 6.3; and no implied duties or obligations
shall be read into this Agreement or any Basic Document against the Owner
Trustee. The Owner Trustee shall have no responsibility for filing any financing
or continuation statement in any public office at any time or to otherwise
perfect or maintain the perfection of any security interest or lien granted to
it hereunder or to prepare or file any Commission filing for the Trust or to
record this Agreement or any Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as
may be necessary to discharge any Liens on any part of the Owner Trust Estate
that result from actions by, or claims against, the Owner Trustee (solely in its
individual capacity) and that are not related to the ownership or the
administration of the Owner Trust Estate.
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SECTION 6.5. No Action Except under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the Owner
Trustee pursuant to this Agreement, (ii) in accordance with the Basic Documents
and (iii) in accordance with any document or instruction delivered to the Owner
Trustee pursuant to Section 6.3.
SECTION 6.6. Restrictions. The Owner Trustee shall not take
any action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
result in the Trust's becoming taxable as a corporation or a publicly traded
partnership for Federal income tax purposes. The Certificateholders shall not
direct the Owner Trustee to take action that would violate the provisions of
this Section.
ARTICLE VII
Concerning the Owner Trustee
SECTION 7.1. Acceptance of Trust and Duties. The Owner
Trustee accepts the trust hereby created and agrees to perform its duties
hereunder with respect to such trust but only upon the terms of this Agreement.
The Owner Trustee also agrees to disburse all monies actually received by it
constituting part of the Owner Trust Estate upon the terms of the Basic
Documents and this Agreement. The Owner Trustee shall not be answerable or
accountable hereunder or under any Basic Document under any circumstances,
except (i) for its own willful misconduct, bad faith or gross negligence, (ii)
in the case of the inaccuracy of any representation or warranty contained in
Section 7.3 expressly made by the Owner Trustee in its individual capacity,
(iii) for liabilities arising from the failure of the Owner Trustee to perform
obligations expressly undertaken by it in the last sentence of Section 6.4
hereof, or (iv) for taxes, fees or other charges on, based on or measured by,
any fees, commissions or compensation received by the Owner Trustee. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error of
judgment, not constituting gross negligence, made by a Responsible Officer of
the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to any
action taken or omitted to be taken by it if such action or omission is in
accordance with the instructions of the Instructing Party, the Sponsor, the
Servicer or any Certificateholder pursuant to the terms hereof;
(c) or risk funds or otherwise incur any financial liability
in the performance of any of its rights or powers hereunder or under any Basic
Document if the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured or provided to it;
(d) by or arising under any of the Basic Documents, including
the principal of and interest on the Notes;
(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the due
execution hereof by the Sponsor or for the form,
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character, genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the Basic
Documents, other than the certificate of authentication on the Certificates, and
the Owner Trustee shall in no event assume or incur any liability, duty or
obligation to the Sponsor, the Insurer, Indenture Trustee, any
Certificateholder, other than as expressly provided for herein and in the Basic
Documents;
(f) the Owner Trustee shall not be liable for the default or
misconduct of the Sponsor, the Insurer, the Indenture Trustee, or the Servicer
under any of the Basic Documents or otherwise and the Owner Trustee shall have
no obligation or liability to perform the obligations under this Agreement or
the Basic Documents that are required to be performed by the Sponsor under this
Agreement, by the Indenture Trustee under the Indenture or the Servicer under
the Sale and Servicing Agreement; and
(g) the Owner Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of the Instructing Party or any of the Certificateholders, unless such
Instructing Party or Certificateholders have offered to the Owner Trustee
security or indemnity satisfactory to it against the costs, expenses and
liabilities that may be incurred by the Owner Trustee therein or thereby. The
right of the Owner Trustee to perform any discretionary act enumerated in this
Agreement or in any Basic Document shall not be construed as a duty, and the
Owner Trustee shall not be answerable for other than its gross negligence, bad
faith or willful misconduct in the performance of any such act.
SECTION 7.2. Furnishing of Documents. The Owner Trustee shall
furnish to the Certificateholders promptly upon receipt of a written request
therefor, duplicates or copies of all reports, notices, requests, demands,
certificates, financial statements and any other instruments furnished to the
Owner Trustee under the Basic Documents.
SECTION 7.3. Representations and Warranties. The Owner
Trustee hereby represents and warrants, in its individual capacity, to the
Sponsor and the Holders that:
(a) It is a Delaware banking corporation, duly organized and
validly existing in good standing under the laws of the State of Delaware. It
has all requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement.
(b) It has taken all corporate action necessary to authorize
the execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to execute
and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated hereby
nor compliance by it with any of the terms or provisions hereof will contravene
any federal or Delaware state law, governmental rule or regulation governing the
banking or trust powers of the Owner Trustee or any judgment or order binding on
it, or constitute any default under its charter documents or by-laws or any
indenture, mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
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SECTION 7.4. Reliance; Advice of Counsel.
(a) The Owner Trustee shall incur no liability to anyone in
acting upon any signature, instrument, notice, resolution, request, consent,
order, certificate, report, opinion, bond or other document or paper believed by
it to be genuine and believed by it to be signed by the proper party or parties.
The Owner Trustee may accept a certified copy of a resolution of the board of
directors or other governing body of any corporate party as conclusive evidence
that such resolution has been duly adopted by such body and that the same is in
full force and effect. As to any fact or matter the method of the determination
of which is not specifically prescribed herein, the Owner Trustee may for all
purposes hereof rely on a certificate, signed by the president or any vice
president or by the treasurer, secretary or other authorized officers of the
relevant party, as to such fact or matter, and such certificate shall constitute
full protection to the Owner Trustee for any action taken or omitted to be taken
by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder
and in the performance of its duties and obligations under this Agreement or the
Basic Documents, the Owner Trustee (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and (ii) may
consult with counsel, accountants and other skilled persons to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
opinion or advice of any such counsel, accountants or other such persons and
according to such opinion not contrary to this Agreement or any Basic Document.
SECTION 7.5. Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created Wilmington
Trust Company acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against the Owner Trustee by reason of
the transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates or
Mortgage Loans. The recitals contained herein and in the Certificates (other
than the signature and countersignature of the Owner Trustee on the
Certificates) shall be taken as the statements of the Sponsor and the Owner
Trustee assumes no responsibility for the correctness thereof. The Owner Trustee
makes no representations as to the validity or sufficiency of this Agreement, of
any Basic Document or of the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) or the Notes, or of
any Mortgage Loan or related documents. The Owner Trustee shall at no time have
any responsibility or liability for or with respect to the legality, validity
and enforceability of any Mortgage Loan, or the perfection and priority of any
security interest created by any Mortgage Loan or the maintenance of any such
perfection and priority, or for or with respect to the sufficiency of the Owner
Trust Estate or its ability to generate the payments to be distributed to
Certificateholders under this Agreement or the Noteholders under the Indenture,
including, without limitation: the existence, condition and ownership of any
Mortgage Loan; the existence and enforceability of any insurance thereon; the
existence and contents of any Mortgage Loan on any computer or other record
thereof; the validity of the assignment of any Mortgage Loan to the Trust or of
any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan; the compliance by the Sponsor,
the Servicer or any other Person with any warranty or
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representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action of the Indenture
Trustee or the Servicer or any subservicer taken in the name of the Owner
Trustee.
SECTION 7.7. Owner Trustee May Own Certificates and Notes.
The Owner Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates or Notes and may deal with the Sponsor, the Indenture
Trustee and the Servicer in banking transactions with the same rights as it
would have if it were not Owner Trustee.
SECTION 7.8. Payments from Owner Trust Estate. All payments
to be made by the Owner Trustee under this Agreement or any of the Basic
Documents to which the Trust or the Owner Trustee is a party shall be made only
from the income and proceeds of the Owner Trust Estate and only to the extent
that the Owner Trust shall have received income or proceeds from the Owner Trust
Estate to make such payments in accordance with the terms hereof. Wilmington
Trust Company, or any successor thereto, in its individual capacity, shall not
be liable for any amounts payable under this Agreement or any of the Basic
Documents to which the Trust or the Owner Trustee is a party.
SECTION 7.9. Doing Business in Other Jurisdictions.
Notwithstanding anything contained to the contrary, neither Wilmington Trust
Company or any successor thereto, nor the Owner Trustee shall be required to
take any action in any jurisdiction other than in the State of Delaware if the
taking of such action will, even after the appointment of a co-trustee or
separate trustee in accordance with Section 10.5 hereof, (i) require the consent
or approval or authorization or order of or the giving of notice to, or the
registration with or the taking of any other action in respect of, any state or
other governmental authority or agency of any jurisdiction other than the State
of Delaware ; (ii) result in any fee, tax or other governmental charge under the
laws of the State of Delaware becoming payable by Wilmington Trust Company (or
any successor thereto); or (iii) subject Wilmington Trust Company (or any
successor thereto) to personal jurisdiction in any jurisdiction other than the
State of Delaware for causes of action arising from acts unrelated to the
consummation of the transactions by Wilmington Trust Company (or any successor
thereto) or the Owner Trustee, as the case may be, contemplated hereby.
ARTICLE VIII
Compensation of Owner Trustee
SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder such fees as
have been separately agreed upon between the Company and the Owner Trustee, and
the Owner Trustee shall be entitled to be reimbursed by the Sponsor for its
other reasonable expenses hereunder, including the reasonable compensation,
expenses and disbursements of such agents, representatives, experts and counsel
as the Owner Trustee may employ in connection with the exercise and performance
of its rights and its duties hereunder and under the Basic Documents.
SECTION 8.2. Indemnification. The Sponsor shall be liable as
primary obligor for, and shall indemnify the Owner Trustee (in its individual
and trust capacities) and its
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officers, directors, successors, assigns, agents and servants (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and expenses)
of any kind and nature whatsoever (collectively, "Expenses") which may (in its
trust or individual capacities) at any time be imposed on, incurred by, or
asserted against the Owner Trustee or any Indemnified Party in any way relating
to or arising out of this Agreement, the Basic Documents, the Owner Trust
Estate, the administration of the Owner Trust Estate or the action or inaction
of the Owner Trustee hereunder, except only that the Sponsor shall not be liable
for or required to indemnify the Owner Trustee from and against Expenses arising
or resulting from any of the matters described in the third sentence of Section
7.1. The indemnities contained in this Section and the rights under Section 8.1
shall survive the resignation or termination of the Owner Trustee or the
termination of this Agreement. In any event of any claim, action or proceeding
for which indemnity will be sought pursuant to this Section, the Owner Trustee's
choice of legal counsel shall be subject to the approval of the Sponsor which
approval shall not be unreasonably withheld.
SECTION 8.3. Payments to the Owner Trustee. Any amounts paid
to the Owner Trustee pursuant to this Article VIII shall be deemed not to be a
part of the Owner Trust Estate immediately after such payment.
SECTION 8.4. Non-recourse Obligations. Notwithstanding
anything in this Agreement or any Basic Document, the Owner Trustee agrees in
its individual capacity and in its capacity as Owner Trustee for the Trust that
all obligations of the Trust to the Owner Trustee individually or as Owner
Trustee for the Trust shall be recourse to the Owner Trust Estate only and
specifically shall not be recourse to the assets of any Certificateholder.
ARTICLE IX
Termination of Trust Agreement
SECTION 9.1. Termination of Trust Agreement.
(a) This Agreement and the Trust shall terminate and be of no
further force or effect upon the later of (i) the maturity or other liquidation
of the last Mortgage Loan (including the redemption by the Sponsor at its option
of the Notes as described in Section 7.01(b) of the Sale and Servicing
Agreement) and the subsequent distribution of amounts in respect of such
Mortgage Loans as provided in the Basic Documents or (ii) the payment to
Certificateholders of all amounts required to be paid to them pursuant to this
Agreement and the payment to the Insurer of all amounts payable or reimbursable
to it pursuant to the Sale and Servicing Agreement and the Insurance Agreement;
provided, however, that the rights to indemnification under Section 8.2 and the
rights under Section 8.1 shall survive the termination of the Trust. The
Servicer shall promptly notify the Owner Trustee and the Insurer of any
prospective termination pursuant to this Section 9.1. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder shall not
(x) operate to terminate this Agreement or the Trust, nor (y) entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of all
or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the
rights, obligations and liabilities of the parties hereto.
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(b) Except as provided in clause (a), neither the Sponsor nor
any other Certificateholder shall be entitled to revoke or terminate the Trust.
(c) Notice of any termination of the Trust, specifying the
Payment Date upon which the Certificateholders shall surrender their
Certificates to the Indenture Trustee for payment of the final distribution and
cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five Business Days of receipt of notice of such
termination from the Servicer given pursuant to Section 7.01(c) of the Sale and
Servicing Agreement, stating (i) the Payment Date upon or with respect to which
final payment of the Certificates shall be made upon presentation and surrender
of the Certificates at the office of the Indenture Trustee therein designated,
(ii) the amount of any such final payment and (iii) that the Record Date
otherwise applicable to such Payment Date is not applicable, payments being made
only upon presentation and surrender of the Certificates at the office of the
Indenture Trustee therein specified. The Owner Trustee shall give such notice to
the Certificate Registrar (if other than the Owner Trustee) and the Indenture
Trustee at the time such notice is given to Certificateholders. Upon
presentation and surrender of the Certificates, the Indenture Trustee shall
cause to be distributed to Certificateholders amounts distributable on such
Payment Date pursuant to Section 8.6(d)(xiii) of the Indenture.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six months after the date
specified in the above-mentioned written notice, the Owner Trustee shall give a
second written notice to the remaining Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within one year after the second notice all the Certificates shall
not have been surrendered for cancellation, the Owner Trustee may take
appropriate steps, or may appoint an agent to take appropriate steps, to contact
the remaining Certificateholders concerning surrender of their Certificates, and
the cost thereof shall be paid out of the funds and other assets that shall
remain subject to this Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed, subject to applicable escheat
laws, by the Owner Trustee to the Sponsor and Holders shall look solely to the
Sponsor for payment.
(d) Any funds remaining in the Trust after funds for final
distribution have been distributed or set aside for distribution shall be
distributed by the Owner Trustee to the Sponsor.
(e) Upon the winding up of the Trust and its termination, the
Owner Trustee shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with the
provisions of Section 3810 of the Business Trust Statute.
ARTICLE X
Successor Owner Trustees and Additional Owner Trustees
SECTION 10.1. Eligibility Requirements for Owner Trustee. The
Owner Trustee shall at all times be a corporation (i) satisfying the provisions
of Section 3807(a) of the Business Trust Statute; (ii) authorized to exercise
corporate trust powers; (iii) having a combined
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capital and surplus of at least $50,000,000 and subject to supervision or
examination by Federal or State authorities; (iv) having (or having a parent
which has) a rating of at least Baa3 by Moody's or A-1 by Standard & Poor's; and
(v) acceptable to the Insurer in its sole discretion. If such corporation shall
publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Owner Trustee
shall cease to be eligible in accordance with the provisions of this Section,
the Owner Trustee shall resign immediately in the manner and with the effect
specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Sponsor (or in the event that
the Sponsor is not the sole Certificateholder, the Holders of Certificates
evidencing not less than a majority in interest in the Trust), the Insurer and
the Servicer. Upon receiving such notice of resignation, the Sponsor shall
promptly appoint a successor Owner Trustee, meeting the qualifications set forth
in Section 10.1 herein, by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to the
successor Owner Trustee, provided that the Sponsor shall have received written
confirmation from each of the Rating Agencies that the proposed appointment will
not result in an increased capital charge to the Insurer by either of the Rating
Agencies. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee or the Insurer may petition any court
of competent jurisdiction for the appointment of a successor Owner Trustee.
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Sponsor, or if at any time the Owner Trustee
shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a
receiver of the Owner Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Owner Trustee or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Certificateholder with the consent of the Insurer may
remove the Owner Trustee. If the Certificateholder shall remove the Owner
Trustee under the authority of the immediately preceding sentence, the Sponsor
shall promptly appoint a successor Owner Trustee, meeting the qualifications set
forth in Section 10.1 herein, by written instrument, in duplicate, one copy of
which instrument shall be delivered to the outgoing Owner Trustee so removed,
one copy to the Insurer and one copy to the successor Owner Trustee and the
Sponsor shall pay all fees owed to the outgoing Owner Trustee, if not previously
paid by the Trust.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section shall not become effective until acceptance of appointment by the
successor Owner Trustee pursuant to Section 10.3 and payment of all fees and
expenses owed to the outgoing Owner Trustee. The Sponsor shall provide notice of
such resignation or removal of the Owner Trustee to each of the Rating Agencies.
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Notwithstanding any other provision of this Agreement, and in
addition to any other method of removal of the Owner Trustee contained herein,
upon a proposal made pursuant to Section 4.2(b) and the subsequent consent of
Certificateholders representing no less than a 66-2/3% interest in the Trust,
the Owner Trustee may be removed as Owner Trustee , subject to the consent of
the Insurer, which consent is not to be unreasonably withheld. In the event the
Owner Trustee is removed pursuant to this paragraph, the provisions of this
Agreement, including Article X herein, shall apply as if the Owner Trustee had
resigned hereunder.
SECTION 10.3. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and
deliver to the Sponsor, the Servicer, the Insurer and to its predecessor Owner
Trustee an instrument accepting such appointment under this Agreement, and
thereupon the resignation or removal of the predecessor Owner Trustee shall
become effective and such successor Owner Trustee, without any further act, deed
or conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall upon
payment of its fees and expenses deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement; and the
Sponsor and the predecessor Owner Trustee shall execute and deliver such
instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights,
powers, duties and obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section unless at the time of such acceptance such successor
Owner Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section, the Servicer shall mail notice of the successor of
such Owner Trustee to all Certificateholders, the Indenture Trustee, the
Noteholders and the Rating Agencies. If the Servicer shall fail to mail such
notice within 10 days after acceptance of appointment by the successor Owner
Trustee, the successor Owner Trustee shall cause such notice to be mailed at the
expense of the Servicer.
SECTION 10.4. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall be the successor of the Owner Trustee
hereunder, provided such corporation shall be eligible pursuant to Section 10.1,
without the execution or filing of any instrument or any further act on the part
of any of the parties hereto, anything herein to the contrary notwithstanding;
provided, further, that the Owner Trustee shall mail notice of such merger or
consolidation to the Rating Agencies.
SECTION 10.5. Appointment of Co-Owner Trustee or Separate
Owner Trustee. Notwithstanding any other provisions of this Agreement, at any
time, for the purpose of meeting any legal requirements of any jurisdiction in
which any part of the Owner Trust Estate or any Mortgaged Property may at the
time be located, the Servicer and the Owner Trustee acting
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jointly shall have the power and shall execute and deliver all instruments to
appoint one or more Persons approved by the Owner Trustee and the Insurer to act
as co-trustee, jointly with the Owner Trustee, or separate trustee or separate
trustees, of all or any part of the Owner Trust Estate, and to vest in such
Person, in such capacity, such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Servicer and the Owner Trustee may
consider necessary or desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, the
Owner Trustee subject to the approval of the Insurer (which approval shall not
be unreasonably withheld) shall have the power to make such appointment. No
co-trustee or separate trustee under this Agreement shall be required to meet
the terms of eligibility as a successor trustee pursuant to Section 10.1 and no
notice of the appointment of any co-trustee or separate trustee shall be
required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised or
performed by the Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Owner Trustee joining
in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed,
the Owner Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust or any portion thereof in
any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the
Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under this
Agreement; and
(iii) the Servicer and the Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article. Each separate trustee and co-trustee, upon its
acceptance of the trusts conferred, shall be vested with the estates or property
specified in its instrument of appointment, either jointly with the Owner
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Owner Trustee. Each such instrument shall be filed with the Owner
Trustee and a copy thereof given to the Servicer and the Insurer.
Any separate trustee or co-trustee may at any time appoint the
Owner 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
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separate trustee or co-trustee shall die, become incapable of acting, resign or
be removed, all of its estates, properties, rights, remedies and trusts shall
vest in and be exercised by the Owner Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
ARTICLE XI
Miscellaneous
SECTION 11.1. Supplements and Amendments.
(a) This Agreement may be amended by the Sponsor and the Owner
Trustee, with the prior written consent of the Insurer and with prior written
notice to the Rating Agencies, without the consent of any of the Noteholders or,
in the event that the Sponsor is not the sole Certificateholder, the
Certificateholders, (i) to cure any ambiguity or defect or (ii) to correct,
supplement or modify any provisions in this Agreement; provided, however, that
such action shall not, as evidenced by an Opinion of Counsel which may be based
upon a certificate of the Servicer, adversely affect in any material respect the
interests of any Noteholder or Certificateholder.
(b) This Agreement may also be amended from time to time, with
the prior written consent of the Insurer by the Sponsor and the Owner Trustee,
with prior written notice to the Rating Agencies, and, to the extent such
amendment materially and adversely affects the interests of the Noteholders,
with the consent of the Noteholders evidencing not less than a majority of the
Outstanding Amount of the Notes and, the consent of the Certificateholders
evidencing not less than a majority interest in the Trust (which consent of any
Holder of a Certificate or Note given pursuant to this Section or pursuant to
any other provision of this Agreement shall be conclusive and binding on such
Holder and on all future Holders of such Certificate or Note and of any
Certificate or Note issued upon the transfer thereof or in exchange thereof or
in lieu thereof whether or not notation of such consent is made upon the
Certificate or Note) for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, that, subject to the express rights of the Insurer under the
Basic Documents, no such amendment shall (a) increase or reduce in any manner
the amount of, or accelerate or delay the timing of, collections of payments on
Mortgage Loans or distributions that shall be required to be made for the
benefit of the Noteholders or the Certificateholders or (b) reduce the aforesaid
percentage of the Outstanding Amount of the Notes and the Certificates, the
Holders of which are required to consent to any such amendment, without the
consent of the Holders of all the outstanding Notes and Holders of all
outstanding Certificates.
Promptly after the execution of any such amendment or consent,
the Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
of the Rating Agencies.
It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this
Section to approve the particular form of any proposed amendment or consent, but
it shall be sufficient if such consent shall approve the substance
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thereof. The manner of obtaining such consents (and any other consents of
Certificateholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee may prescribe. Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such amendment
with the Secretary of State.
Prior to the execution of any amendment to this Agreement or
the Certificate of Trust, the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied. The Owner
Trustee may, but shall not be obligated to, enter into any such amendment which
affects the Owner Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest therein
only in accordance with Article IX. No transfer, by operation of law or
otherwise, of any right, title or interest of the Certificateholders to and in
their ownership interest in the Owner Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.3. Limitations on Rights of Others. Except for
Section 2.7, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Sponsor, the Certificateholders, the Servicer and, to the
extent expressly provided herein, the Insurer, the Indenture Trustee and the
Noteholders, and nothing in this Agreement, whether express or implied, shall be
construed to give to any other Person any legal or equitable right, remedy or
claim in the Owner Trust Estate or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 11.4. Notices.
(a) Unless otherwise expressly specified or permitted by the
terms hereof, all notices shall be in writing and shall be deemed given upon
receipt personally delivered, delivered by overnight courier or mailed first
class mail or certified mail, in each case return receipt requested, and shall
be deemed to have been duly given upon receipt, if to the Owner Trustee,
addressed to the Corporate Trust Office; if to the Sponsor, addressed to
GreenPoint Mortgage Securities Inc., 700 Larkspur Landing Circle, Suite 240,
Larkspur, California 94939; if to the Insurer, addressed to Insurer, Ambac
Assurance Corporation, One State Street Plaza, New York, New York 10004,
Attention: Surveillance Department, Telecopy No.: (212) 668-0340; or, as to each
party, at such other address as shall be designated by such party in a written
notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be
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conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.5. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
SECTION 11.6. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.7. Assignments; Insurer.
(a) This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assigns. This Agreement shall also inure to the benefit of the Insurer. Without
limiting the generality of the foregoing, all covenants and agreements in this
Agreement which confer rights upon the Insurer shall be for the benefit of and
run directly to the Insurer, and the Insurer shall be entitled to rely on and
enforce such covenants, subject, however, to the limitations on such rights
provided in this Agreement and the Basic Documents. The Insurer may disclaim any
of its rights and powers under this Agreement (but not its duties and
obligations under the Policy) upon delivery of a written notice to the Owner
Trustee.
(b) In accepting instructions from the Insurer pursuant to
Article IV or Section 6.3 of this Agreement, and with respect to any other
obligations of the Owner Trustee to the Insurer under this Agreement, the Owner
Trustee undertakes to perform or observe only its express obligations under this
Agreement, and no implied obligations with respect to the Insurer shall be read
into this Agreement against the Owner Trustee. The Owner Trustee shall not be
deemed to owe any fiduciary duty to the Insurer and it is expressly understood
and agreed by the Insurer that the Owner Trustee shall not be personally liable
or responsible for the payment of any amount owing on or with respect to the
Basic Documents or for the failure of the Trust to perform its obligations under
the Basic Documents or any other agreement with respect thereto.
SECTION 11.8. No Petition. The Owner Trustee (not in its
individual capacity but solely as Owner Trustee), by entering into this
Agreement, each Certificateholder, by accepting a Certificate, and the Indenture
Trustee and each Noteholder by accepting the benefits of this Agreement, hereby
covenants and agrees that they will not at any time institute against the
Sponsor, or join in any institution against the Sponsor of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates, the Notes, this
Agreement or any of the Basic Documents.
SECTION 11.9. No Recourse. Each Certificateholder by accepting
a Certificate acknowledges that such Certificateholder's Certificates represent
beneficial interests in the Trust
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only and do not represent interests in or obligations of the Servicer, the
Sponsor, the Owner Trustee, the Indenture Trustee, the Insurer or any Affiliate
thereof and no recourse may be had against such parties or their assets, except
as may be expressly set forth or contemplated in this Agreement, the
Certificates or the Basic Documents.
SECTION 11.10. Headings. The headings of the various Articles
and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof.
SECTION 11.11. GOVERNING LAW. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 11.12. Servicer. The Servicer is authorized to
prepare, or cause to be prepared, execute and deliver on behalf of the Trust all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Trust or Owner Trustee to prepare, file or deliver
pursuant to the Basic Documents. Upon written request, the Owner Trustee shall
execute and deliver to the Servicer a limited power of attorney appointing the
Servicer the Trust's agent and attorney-in-fact to prepare, or cause to be
prepared, execute and deliver all such documents, reports, filings, instruments,
certificates and opinions.
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IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized as of the day and year first above written.
WILMINGTON TRUST COMPANY,
Owner Trustee
By: /s/ James P. Lawler
-------------------------------
Name: James P. Lawler
Title: Vice President
GREENPOINT MORTGAGE SECURITIES INC.,
Sponsor
By: /s/ Kristen Decker
-------------------------------
Name: Kristen Decker
Title: Vice President
Acknowledged and Agreed:
GREENPOINT MORTGAGE FUNDING, INC.,
Servicer
By: /s/ Gilbert J. MacQuarrie
-------------------------------------
Name: Gilbert J. MacQuarrie
Title: Executive Vice President and
Chief Financial Officer
AMBAC ASSURANCE CORPORATION,
Insurer
By: /s/ Jeff D. Nabi
-------------------------------------
Name: Jeff D. Nabi
Title: Vice President
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EXHIBIT A
CERTIFICATE
THIS CERTIFICATE REPRESENTS CERTAIN RESIDUAL RIGHTS TO PAYMENT TO THE EXTENT
DESCRIBED HEREIN AND IN THE TRUST AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES
PERSON.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, 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 IN ACCORDANCE WITH THE PROVISIONS OF SECTION
3.10 OF THE TRUST AGREEMENT REFERRED TO HEREIN.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE UNLESS THE TRANSFEREE PROVIDES A
REPRESENTATION LETTER FROM THE TRANSFEREE OF SUCH CERTIFICATE, ACCEPTABLE TO AND
IN FORM AND SUBSTANCE SATISFACTORY TO THE INDENTURE TRUSTEE AND THE INSURER, TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN (AS DEFINED IN
SECTION 3(3) OF ERISA) THAT IS SUBJECT TO THE PROVISIONS OF TITLE I OF ERISA, A
PLAN DESCRIBED IN SECTION 4975(e)(1) OF THE INTERNAL REVENUE CODE, NOR A PERSON
ACTING ON BEHALF OF OR USING THE ASSETS OF ANY SUCH PLAN, WHICH REPRESENTATION
LETTER SHALL NOT BE AN EXPENSE OF THE INDENTURE TRUSTEE OR THE INSURER.
NO TRANSFER OF A CERTIFICATE SHALL BE MADE UNLESS SUCH TRANSFER IS EXEMPT FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
APPLICABLE STATE SECURITIES LAWS OR IS MADE IN ACCORDANCE WITH SAID ACT AND
LAWS. EXCEPT FOR THE INITIAL ISSUANCE OF THE CERTIFICATE TO THE SPONSOR, THE
INDENTURE TRUSTEE SHALL REQUIRE (i) THE TRANSFEREE TO EXECUTE AN INVESTMENT
LETTER ACCEPTABLE TO AND IN FORM AND SUBSTANCE SATISFACTORY TO THE INDENTURE
TRUSTEE AND THE INSURER CERTIFYING TO THE INDENTURE TRUSTEE AND THE INSURER THE
FACTS SURROUNDING SUCH TRANSFER, WHICH INVESTMENT LETTER SHALL NOT BE AN EXPENSE
OF THE INDENTURE TRUSTEE OR THE INSURER OR (ii) IF THE INVESTMENT LETTER IS NOT
DELIVERED, A WRITTEN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE INDENTURE TRUSTEE, THE INSURER AND THE SPONSOR
A-1
<PAGE>
THAT SUCH TRANSFER MAY BE MADE PURSUANT TO AN EXEMPTION, DESCRIBING THE
APPLICABLE EXEMPTION AND THE BASIS THEREFOR, FROM SAID ACT OR IS BEING MADE
PURSUANT TO SAID ACT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE
INDENTURE TRUSTEE, THE INSURER OR THE SPONSOR. THE HOLDER OF A CERTIFICATE
DESIRING TO EFFECT SUCH TRANSFER SHALL, AND DOES HEREBY AGREE TO, INDEMNIFY THE
SPONSOR AND THE INSURER AGAINST ANY LIABILITY THAT MAY RESULT IF THE TRANSFER IS
NOT SO EXEMPT OR IS NOT MADE IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS.
THE CERTIFICATES AND ANY INTEREST THEREIN SHALL NOT BE TRANSFERRED EXCEPT UPON
SATISFACTION OF THE FOLLOWING CONDITIONS PRECEDENT: (i) THE PERSON THAT ACQUIRES
A CERTIFICATE SHALL (A) BE ORGANIZED AND EXISTING UNDER THE LAWS OF THE UNITED
STATES OF AMERICA OR ANY STATE OR THE DISTRICT OF COLUMBIA THEREOF, (B)
EXPRESSLY ASSUME, BY AN AGREEMENT SUPPLEMENTAL HERETO, EXECUTED AND DELIVERED TO
THE INDENTURE TRUSTEE AND THE INSURER, THE PERFORMANCE OF EVERY COVENANT AND
OBLIGATION OF THE SPONSOR UNDER THE TRUST AGREEMENT AND (C) AS PART OF ITS
ACQUISITION OF A CERTIFICATE, ACQUIRE ALL RIGHTS OF THE SPONSOR OR ANY
TRANSFEREE UNDER SECTION 3.10 OF THE TRUST AGREEMENT TO AMOUNTS PAYABLE TO THE
CERTIFICATE OR SUCH TRANSFEREE UNDER SECTIONS 8.6(D)(XIII) AND 8.5(C) OF THE
INDENTURE; (ii) THE HOLDER OF THE CERTIFICATES SHALL DELIVER TO THE INDENTURE
TRUSTEE AND THE INSURER AN OFFICER'S CERTIFICATE STATING THAT SUCH TRANSFER AND
SUCH SUPPLEMENTAL AGREEMENT COMPLY WITH SECTION 3.10(C) OF THE TRUST AGREEMENT
AND THAT ALL CONDITIONS PRECEDENT PROVIDED BY SECTION 3.10(C) OF THE TRUST
AGREEMENT HAVE BEEN COMPLIED WITH AND AN OPINION OF COUNSEL STATING THAT ALL
CONDITIONS PRECEDENT PROVIDED BY SECTION 3.10(C) OF THE TRUST AGREEMENT HAVE
BEEN COMPLIED WITH, AND THE INDENTURE TRUSTEE MAY CONCLUSIVELY RELY ON SUCH
OFFICER'S CERTIFICATE, SHALL HAVE NO DUTY TO MAKE INQUIRIES WITH REGARD TO THE
MATTERS SET FORTH THEREIN AND SHALL INCUR NO LIABILITY IN SO RELYING; (iii) THE
HOLDER OF THE CERTIFICATES SHALL DELIVER TO THE INDENTURE TRUSTEE AND THE
INSURER A LETTER FROM EACH RATING AGENCY CONFIRMING THAT ITS RATING OF THE
NOTES, AFTER GIVING EFFECT TO SUCH TRANSFER, WILL NOT BE REDUCED OR WITHDRAWN
WITHOUT REGARD TO THE POLICY; (iv) THE TRANSFEREE OF THE CERTIFICATES SHALL
DELIVER TO THE INDENTURE TRUSTEE AND THE INSURER AN OPINION OF COUNSEL TO THE
EFFECT THAT (A) SUCH TRANSFER WILL NOT ADVERSELY AFFECT THE TREATMENT OF THE
NOTES AFTER SUCH TRANSFER AS DEBT FOR FEDERAL AND APPLICABLE STATE INCOME TAX
PURPOSES, (B) SUCH TRANSFER WILL NOT RESULT IN THE TRUST BEING SUBJECT TO TAX AT
THE ENTITY LEVEL FOR FEDERAL OR APPLICABLE STATE TAX PURPOSES, (C) SUCH TRANSFER
WILL NOT HAVE ANY MATERIAL ADVERSE IMPACT ON THE FEDERAL OR APPLICABLE STATE
INCOME TAXATION OF A NOTEHOLDER OR ANY NOTE OWNER AND (D) SUCH TRANSFER WILL NOT
RESULT IN THE ARRANGEMENT CREATED BY THE TRUST AGREEMENT OR ANY "PORTION" OF THE
TRUST, BEING
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<PAGE>
TREATED AS A TAXABLE MORTGAGE POOL AS DEFINED IN SECTION 7701(I) OF
THE CODE; (v) ALL FILINGS AND OTHER ACTIONS NECESSARY TO CONTINUE THE PERFECTION
OF THE INTEREST OF THE TRUST IN THE MORTGAGE LOANS AND THE OTHER PROPERTY
CONVEYED UNDER THE TRUST AGREEMENT SHALL HAVE BEEN TAKEN OR MADE AND (vi) THE
INSURER SHALL HAVE CONSENTED TO SUCH TRANSFER.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
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GREENPOINT HOME EQUITY LOAN TRUST 1999-2 CERTIFICATE
Percentage Interest: 100% Cut-Off Date: November 30, 1999
First Payment Date: January 15, 2000 Issue Date: December 22, 1999
No. 1
GREENPOINT MORTGAGE SECURITIES INC.
Certificateholder
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the
within-mentioned Trust Agreement.
WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
By:
---------------------------------------
Authenticating Agent
The Trust was created pursuant to a Trust Agreement dated as
of December 1, 1999 (the "Trust Agreement"), between the Sponsor and Wilmington
Trust Company, as owner trustee (the "Owner Trustee"), a summary of certain of
the pertinent provisions of which is set forth below. To the extent not
otherwise defined herein, the capitalized terms used herein have the meanings
assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as GreenPoint Home Equity Loan "Asset Backed Certificates" (herein
called the "Certificates"). Also issued under the Indenture dated as of December
1, 1999, among the Trust and Bank One, National Association, as indenture
trustee (the "Indenture Trustee") are two classes of Notes designated as Class
A-1 Notes and Class A-2 Notes (collectively referred to herein as the "Notes").
These Certificates are issued under and are 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 property of the Trust includes (A) a pool of certain adjustable
rate home equity revolving credit line loans (the "HELOC Mortgage Loans")
(including any Additional Balances related thereto) and certain second lien
closed-end loans (the "Closed End Mortgage Loans") in each case which
substantially conform to the loan origination standards with respect to loan
balances as of the date of origination set form by the Federal National Mortgage
Association and (B) a pool of certain HELOC Mortgage Loans (including any
Additional Balances related thereto) and certain Closed End Mortgage Loans which
do not so conform.
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<PAGE>
Under the Trust Agreement, there will be distributed on the
15th day of each month or, if such 15th day is not a Business Day, the next
Business Day (the "Payment Date"), commencing on January 15, 2000, to the Person
in whose name this Certificate is registered at the close of business on the
Business Day preceding such Payment Date (the "Record Date") such
Certificateholder's Percentage Interest in the amount to be distributed to
Certificateholders on such Payment Date.
The holder of this Certificate acknowledges and agrees that
its rights to receive distributions in respect of this Certificate are
subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement, as applicable.
The holder of this Certificate, by acceptance of this
Certificate, specifically acknowledges that it has no right to or interest in
any monies at any time held pursuant to the Reserve Fund, the Pre-Funding
Account or prior to the release of such monies pursuant to Sections 8.6(d)(xiii)
and 8.5(c) of the Indenture, such monies being held in trust for the benefit of
the Noteholders and the Insurer. Notwithstanding the foregoing, in the event
that it is ever determined that the monies held in the Reserve Fund or the
Pre-Funding Account constitute a pledge of collateral, then the provisions of
the Sale and Servicing Agreement shall be considered to constitute a security
agreement and the holder of this Certificate hereby grants to the Indenture
Trustee and the Insurer a first priority perfected security interest in such
amounts. In addition, each Certificateholder, by acceptance of its Certificate,
hereby appoints the Sponsor as its agent to pledge a first priority perfected
security interest in the Reserve Fund and the Pre-Funding Account and agrees to
execute and deliver such instruments of conveyance, assignment, grant,
confirmation, etc., as well as any financing statements, in each case as the
Insurer shall consider reasonably necessary in order to perfect the Indenture
Trustee's security interest in the Trust Property.
It is the intent of the Sponsor, the Servicer, and the
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a branch. In the event that the Certificates are held by more than
one Holder, it is the intent of the Sponsor, the Servicer, and the
Certificateholders that, for purposes of Federal income taxes, the Trust will be
treated as a partnership and the Certificateholders will be treated as partners
in that partnership. The Sponsor and any other Certificateholders, by acceptance
of a Certificate, agree to treat, and to take no action inconsistent with the
treatment of, the Certificates for such tax purposes as partnership interests in
the Trust. Each Certificateholder, by its acceptance of a Certificate, covenants
and agrees that such Certificateholder will not at any time institute against
the Trust or the Sponsor, or join in any institution against the Trust or the
Sponsor of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any United States Federal or
state bankruptcy or similar law in connection with any obligations relating to
the Certificates, the Notes, the Trust Agreement or any of the Basic Documents.
Distributions on this Certificate will be made as provided in
the Sale and Servicing Agreement and the Indenture by the Indenture Trustee by
wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Certificate
A-5
<PAGE>
will be made after due notice by the Owner Trustee of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency maintained for the purpose by the Owner Trustee in the
Corporate Trust Office.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the holder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
The Certificates do not represent an obligation of, or an
interest in, the Company, the Sponsor, the Servicer, the Insurer, the Owner
Trustee or any Affiliates of any of them and no recourse may be had against such
parties or their assets, except as may be expressly set forth or contemplated
herein or in the Trust Agreement, the Indenture or the Basic Documents. In
addition, this Certificate is not guaranteed by any governmental agency or
instrumentality and is limited in right of payment to certain collections with
respect to the Mortgage Loans, as more specifically set forth herein, in the
Sale and Servicing Agreement and in the Indenture. A copy of each of the Sale
and Servicing Agreement and the Trust Agreement may be examined during normal
business hours at the principal office of the Sponsor, and at such other places,
if any, designated by the Sponsor, by any Certificateholder upon written
request.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Sponsor and the rights of the Certificateholders under the
Trust Agreement at any time by the Sponsor and the Owner Trustee with the prior
written consent of the Insurer and with the consent of the holders of the Notes
and the Certificates evidencing not less than a majority of the outstanding
Notes and the Certificates. Any such consent by the holder of this Certificate
shall be conclusive and binding on such holder and on all future holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange hereof or in lieu hereof whether or not 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 (other than the Sponsor or the Insurer).
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies of the Certificate Registrar maintained
by the Owner Trustee in the Corporate Trust Office, accompanied by a written
instrument of transfer in form satisfactory to the Owner 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
in authorized denominations evidencing the same aggregate interest in the Trust
will be issued to the designated transferee. The initial Certificate Registrar
appointed under the Trust Agreement is Wilmington Trust Company.
A-6
<PAGE>
Except for Certificates issued to the Sponsor, the
Certificates are issuable only as registered Certificates without coupons in
denominations of $1,000 or integral multiples of $1,000 in excess thereof. As
provided in the Trust Agreement and subject to certain limitations therein set
forth, Certificates are exchangeable for new Certificates in authorized
denominations evidencing the same aggregate denomination, as requested by the
holder surrendering the same. No service charge will be made for any such
registration of transfer or exchange, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar, the Insurer and
any agent of the Owner Trustee, the Certificate Registrar, the Insurer or the
Insurer may treat the person in whose name this Certificate is registered as the
owner hereof for all purposes, and none of the Owner Trustee, the Certificate
Registrar, the Insurer nor any such agent shall be affected by any notice to the
contrary.
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Trust Agreement, the Indenture and the Sale and Servicing Agreement and the
disposition of all property held as part of the Trust. The Sponsor may at its
option redeem the Notes at a price and upon the satisfaction of certain
conditions specified in Section 7.01(b) of the Sale and Servicing Agreement, and
if all of the Notes are redeemed, such redemption may result in termination of
the Trust which may effect a transfer of the Certificates; however, such right
of purchase is exercisable, subject to certain restrictions, only on any Payment
Date on or after the Payment Date immediately prior to which the related Note
Principal Balance for a Class of Notes is less than 10% of the related Original
Note Principal Balance for such Class of Notes and all amounts due and owing to
the Insurer for unpaid premiums and unreimbursed draws related to such Class of
Notes on the Policy and all other amounts due and owing to the Insurer pursuant
to the Insurance Agreement, together with interest thereon as provided under the
Insurance Agreement, have been paid.
The recitals contained herein shall be taken as the statements
of the Sponsor or the Servicer, as the case may be, and the Owner Trustee
assumes no responsibility for the correctness thereof. The Owner Trustee makes
no representations as to the validity or sufficiency of this Certificate or of
any Mortgage Loan or related document.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual or
facsimile signature, this Certificate shall not entitle the holder hereof to any
benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Certificate to be duly
executed.
GREENPOINT HOME EQUITY LOAN TRUST 1999
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
By:
-------------------------------------------
Name:
Title:
Dated: December 22, 1999
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<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- --------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing_________________ Attorney to transfer said
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
______________________ *
Signature Guaranteed:
______________________ *
- ------------
* NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within
Certificate in every particular, without alteration, enlargement or any
change whatever. Such signature must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the Certificate
Registrar, which requirements include membership or participation in
STAMP or such other "signature guarantee program" as may be determined
by the Certificate Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Securities Exchange Act of 1934, as
amended.
<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
GREENPOINT HOME EQUITY LOAN TRUST 1999-2
This Certificate of Trust of GreenPoint Home Equity Loan Trust
1999-2 (the "Trust"), dated as of December __, 1999, is being duly executed and
filed by Wilmington Trust Company, a Delaware banking corporation, as trustee,
to form a business trust under the Delaware Business Trust Act (12 Del. Code,
Section 3801 et seq.).
1. Name. The name of the business trust formed hereby is
GreenPoint Home Equity Loan Trust 1999-2.
2. Delaware Trust. The name and business address of the Owner
Trustee of the Trust in the State of Delaware is Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, Delaware 19890-0001.
Attn: Corporate Trust Administration.
3. This Certificate of Trust will be effective December 22,
1999.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust, has executed this Certificate of Trust as of the date first above
written.
WILMINGTON TRUST COMPANY,
not in its individual capacity but solely as Owner
Trustee of the Trust.
By:
-------------------------------------------
Name:
Title:
<PAGE>
EXHIBIT 4.3
EXECUTION COPY
- --------------------------------------------------------------------------------
GREENPOINT HOME EQUITY LOAN TRUST 1999-2
Class A-1 Variable Rate Asset Backed Notes
Class A-2 Variable Rate Asset Backed Notes
INDENTURE
Dated as of December 1, 1999
BANK ONE, NATIONAL ASSOCIATION
Indenture Trustee
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
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ARTICLE I Definitions and Incorporation by Reference..............................................................1
SECTION 1.1. Definitions.................................................................................1
SECTION 1.2. Incorporation by Reference of the Trust Indenture Act.......................................1
SECTION 1.3. Rules of Construction.......................................................................2
SECTION 1.4. Action by or Consent of Noteholders and Certificateholders..................................2
SECTION 1.5. Conflict with TIA...........................................................................2
ARTICLE II The Notes ............................................................................................3
SECTION 2.1. Form .......................................................................................3
SECTION 2.2. Execution, Authentication and Delivery......................................................3
SECTION 2.3. Registration; Registration of Transfer and Exchange.........................................3
SECTION 2.4. Mutilated, Destroyed, Lost or Stolen Notes..................................................5
SECTION 2.5. Persons Deemed Owners.......................................................................6
SECTION 2.6. Payment of Principal and Interest; Defaulted Interest.......................................6
SECTION 2.7. Cancellation................................................................................7
SECTION 2.8. Release of Collateral.......................................................................7
SECTION 2.9. Book-Entry Notes............................................................................7
SECTION 2.10. Notices to Clearing Agency..................................................................8
SECTION 2.11. Definitive Notes............................................................................8
ARTICLE III Covenants ............................................................................................9
SECTION 3.1. Payment of Principal and Interest...........................................................9
SECTION 3.2. Maintenance of Office or Agency.............................................................9
SECTION 3.3. Money for Payments to be Held in Trust......................................................9
SECTION 3.4. Existence..................................................................................10
SECTION 3.5. Protection of Trust Property...............................................................10
SECTION 3.6. Opinions as to Trust Property..............................................................11
SECTION 3.7. Performance of Obligations; Servicing of Mortgage Loans....................................12
SECTION 3.8. Negative Covenants.........................................................................12
SECTION 3.9. Annual Statement as to Compliance..........................................................13
SECTION 3.10. Issuer May Not Consolidate or Transfer Assets..............................................13
SECTION 3.11. No Other Business..........................................................................14
SECTION 3.12. No Borrowing...............................................................................14
SECTION 3.13. Servicer's Obligations.....................................................................14
SECTION 3.14. Guarantees, Loans, Advances and Other Liabilities..........................................14
SECTION 3.15. Capital Expenditures.......................................................................14
SECTION 3.16. Compliance with Laws.......................................................................14
SECTION 3.17. Restricted Payments........................................................................14
SECTION 3.18. Notice of Rapid Amortization Events and Events of Servicing Termination....................15
SECTION 3.19. Further Instruments and Acts...............................................................15
SECTION 3.20. Amendments of Sale and Servicing Agreement and Trust Agreement.............................15
SECTION 3.21. Income Tax Characterization................................................................15
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ARTICLE IV Satisfaction and Discharge............................................................................15
SECTION 4.1. Satisfaction and Discharge of Indenture....................................................15
SECTION 4.2. Application of Trust Money.................................................................16
SECTION 4.3. Repayment of Monies Held by Note Paying Agent..............................................17
ARTICLE V Remedies...............................................................................................17
SECTION 5.1. Remedies...................................................................................17
SECTION 5.2. Limitation of Suits........................................................................17
SECTION 5.3. Unconditional Rights of Noteholders To Receive Principal and Interest......................18
SECTION 5.4. Restoration of Rights and Remedies.........................................................18
SECTION 5.5. Rights and Remedies Cumulative.............................................................18
SECTION 5.6. Delay or Omission Not a Waiver.............................................................18
SECTION 5.7. Control by Noteholders.....................................................................18
SECTION 5.8. Undertaking for Costs......................................................................19
SECTION 5.9. Waiver of Stay or Extension Laws...........................................................19
SECTION 5.10. Action on Notes............................................................................19
SECTION 5.11. Performance and Enforcement of Certain Obligations.........................................19
SECTION 5.12. Subrogation................................................................................20
SECTION 5.13. Preference Claims..........................................................................20
ARTICLE VI The Indenture Trustee.................................................................................21
SECTION 6.1. Duties of Indenture Trustee................................................................21
SECTION 6.2. Rights of Indenture Trustee................................................................23
SECTION 6.3. Individual Rights of Indenture Trustee.....................................................24
SECTION 6.4. Indenture Trustee's Disclaimer.............................................................24
SECTION 6.5. Notice of Rapid Amortization Events and Events of Servicing Termination....................24
SECTION 6.6. Reports by Indenture Trustee to Holders....................................................24
SECTION 6.7. Compensation and Indemnity.................................................................24
SECTION 6.8. Replacement of Indenture Trustee...........................................................25
SECTION 6.9. Successor Indenture Trustee by Merger......................................................27
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture Trustee..........................27
SECTION 6.11. Eligibility; Disqualification..............................................................28
SECTION 6.12. Preferential Collection of Claims Against Issuer...........................................28
SECTION 6.13. Appointment and Powers.....................................................................29
SECTION 6.14. Performance of Duties......................................................................29
SECTION 6.15. Limitation on Liability....................................................................29
SECTION 6.16. Reliance Upon Documents....................................................................29
SECTION 6.17. Representations and Warranties of the Indenture Trustee....................................29
SECTION 6.18. Waiver of Setoffs..........................................................................30
SECTION 6.19. Control by the Controlling Party...........................................................30
SECTION 6.20. Trustee May Enforce Claims Without Possession of Notes.....................................30
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SECTION 6.21. Suits for Enforcement......................................................................30
SECTION 6.22. Mortgagor Claims...........................................................................31
ARTICLE VII Noteholders' Lists and Reports.......................................................................31
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and Addresses of Noteholders..................31
SECTION 7.2. Preservation of Information; Communications to Noteholders.................................32
SECTION 7.3. Reports by Issuer..........................................................................32
SECTION 7.4. Reports by Indenture Trustee...............................................................33
ARTICLE VIII Payments and Statements to Noteholders and Certificateholders; Accounts, Disbursements and
Releases...................................................................................33
SECTION 8.1. Collection of Money........................................................................33
SECTION 8.2. Release of Trust Property..................................................................33
SECTION 8.3. Establishment of Accounts..................................................................34
SECTION 8.4. The Policy.................................................................................34
SECTION 8.5. Reserve Fund...............................................................................35
SECTION 8.6. Priority of Distributions..................................................................35
SECTION 8.7. Statements to Noteholders..................................................................38
SECTION 8.8. Rights of Securityholders..................................................................39
SECTION 8.9. Pre-Funding Account........................................................................40
SECTION 8.10. Opinion of Counsel.........................................................................41
ARTICLE IX Supplemental Indentures...............................................................................41
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.....................................41
SECTION 9.2. Supplemental Indentures with Consent of Noteholders........................................42
SECTION 9.3. Execution of Supplemental Indentures.......................................................44
SECTION 9.4. Effect of Supplemental Indenture...........................................................44
SECTION 9.5. Conformity With Trust Indenture Act........................................................44
SECTION 9.6. Reference in Notes to Supplemental Indentures..............................................44
ARTICLE X Redemption of Notes....................................................................................45
SECTION 10.1. Redemption.................................................................................45
SECTION 10.2. Surrender of Notes.........................................................................45
SECTION 10.3. Form of Redemption Notice..................................................................46
SECTION 10.4. Notes Payable on Redemption Date...........................................................47
ARTICLE XI Miscellaneous.........................................................................................47
SECTION 11.1. Compliance Certificates and Opinions, etc..................................................47
SECTION 11.2. Form of Documents Delivered to Indenture Trustee...........................................48
SECTION 11.3. Acts of Noteholders........................................................................48
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies............................49
SECTION 11.5. Notices to Noteholders; Waiver.............................................................50
SECTION 11.6. Alternate Payment and Notice Provisions....................................................50
SECTION 11.7. Conflict with Trust Indenture Act..........................................................50
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SECTION 11.8. Effect of Headings and Table of Contents...................................................51
SECTION 11.9. Successors and Assigns.....................................................................51
SECTION 11.10. Separability...............................................................................51
SECTION 11.11. Benefits of Indenture......................................................................51
SECTION 11.12. Legal Holidays.............................................................................51
SECTION 11.13. GOVERNING LAW..............................................................................51
SECTION 11.14. Counterparts...............................................................................51
SECTION 11.15. Recording of Indenture.....................................................................51
SECTION 11.16. Trust Obligation...........................................................................52
SECTION 11.17. No Petition................................................................................52
SECTION 11.18. Inspection.................................................................................52
SECTION 11.19. Limitation of Liability....................................................................52
ARTICLE XII Rapid Amortization Events............................................................................53
SECTION 12.1. Rapid Amortization Events..................................................................53
ANNEX A -- Defined Terms
Exhibit A -- Form of Class A-1 Note
Exhibit B -- Form of Class A-2 Note
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<PAGE>
INDENTURE, dated as of December 1, 1999, between GREENPOINT
HOME EQUITY LOAN TRUST 1999-2, a Delaware business trust (the "Issuer"), and
BANK ONE, NATIONAL ASSOCIATION, a national banking association, as trustee (the
"Indenture Trustee").
Each party agrees as follows for the benefit of the other
party and for the equal and ratable benefit of the Holders of the Issuer's Class
A-1 Variable Rate Asset Backed Notes (the "Class A-1 Notes") and Class A-2
Variable Rate Asset Backed Notes (the "Class A-2 Notes" and, together with the
Class A-1 Notes, the "Notes"):
As security for the payment and performance by the Issuer of
its obligations under this Indenture and the Notes, the Issuer has agreed to
assign the Collateral (as defined below) to the Indenture Trustee on behalf of
the Noteholders.
Ambac Assurance Corporation (the "Insurer") has issued and
delivered a financial guaranty insurance policy for both Classes of Notes, dated
the Closing Date (the "Policy"), pursuant to which the Insurer guarantees the
Insured Payments (as defined below).
As an inducement to the Insurer to issue and deliver the
Policy, the Issuer and the Insurer have executed and delivered the Insurance and
Indemnity Agreement, dated as of December 22, 1999 (as amended from time to
time, the "Insurance Agreement"), among the Insurer, the Issuer, GreenPoint
Mortgage Funding, Inc. and GreenPoint Mortgage Securities Inc. and the Indenture
Trustee.
As an additional inducement to the Insurer to issue the
Policy, and as security for the performance by the Issuer of the Insurer Issuer
Secured Obligations and as security for the performance by the Issuer of the
Indenture Trustee Issuer Secured Obligations, the Issuer has agreed to grant and
assign the Collateral (as defined below) to the Indenture Trustee for the
benefit of the Issuer Secured Parties, as their respective interests may appear.
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GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the
Closing Date, for the benefit of the Issuer Secured Parties all of the Issuer's
right, title and interest in and to: (i)(A) a pool ("Pool I") of certain
adjustable rate home equity revolving credit line loans (the "HELOC Mortgage
Loans") (including any Additional Balances related thereto) and certain second
lien closed-end loans (the "Closed End Mortgage Loans") in each case which
substantially conform to the loan origination standards with respect to loan
balances as of the date of origination set forth by the Federal National
Mortgage Association (the "Initial Pool I Mortgage Loans") and (B) a pool ("Pool
II") of certain HELOC Mortgage Loans (including any Additional Balances related
thereto) which may not so conform (the "Initial Pool II Mortgage Loans" and
together with the Pool I Mortgage Loans, the "Initial Mortgage Loans"), in each
case as set forth in Exhibit A to the Sale and Servicing Agreement; (ii) the
collections in respect of the Mortgage Loans after the Cut-Off Date; (iii)
property that secured a Mortgage Loan that has been acquired by foreclosure or
deed in lieu of foreclosure; (iv) rights of the Sponsor under hazard insurance
policies covering the Mortgaged Properties; (v) the Policy; (vi) amounts on
deposit from time to time in the Collection Account; (vii) any amounts on
deposit in the Pre-Funding Account; (viii) any amounts on deposit in the Reserve
Fund; (ix) any and all Subsequent Mortgage Loans (the Subsequent Mortgage Loans,
together with the Initial Mortgage Loans are collectively referred to as the
"Mortgage Loans") (including any Additional Balances related thereto); (x) all
rights under the Purchase Agreement assigned to the Issuer (including all
representations and warranties of the Seller contained therein) and all rights
of the Issuer under the Sale and Servicing Agreement; and (xi) any and all
proceeds of the foregoing (the items set forth in (i) through (xi) above, the
"Collateral").
The foregoing Grant is made in trust to the Indenture Trustee,
for the benefit first, of the Holders of the Notes, and second, for the benefit
of the Insurer. The Indenture Trustee hereby acknowledges such Grant, accepts
the trusts under this Indenture in accordance with the provisions of this
Indenture and agrees to perform its duties required in this Indenture to the
best of its ability to the end that the interests of such parties, recognizing
the priorities of their respective interests may be adequately and effectively
protected.
ARTICLE I
Definitions and Incorporation by Reference
SECTION 1.1. Definitions. Except as otherwise specified
herein, the following terms have the respective meanings set forth in Annex A to
this Indenture.
SECTION 1.2. Incorporation by Reference of the Trust Indenture
Act. Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
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"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"Indenture Trustee" or "institutional trustee" means the
Indenture Trustee.
"obligor" on the indenture securities means the Issuer.
All other TIA terms used in this Indenture that are defined by
the TIA, or defined by Commission rule have the meaning assigned to them by such
definitions.
SECTION 1.3. Rules of Construction. Unless the context
otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the
meaning assigned to it in accordance with generally accepted
accounting principles as in effect from time to time;
(iii) "or" is not exclusive;
(iv) "including" means including without limitation; and
(v) words in the singular include the plural and words in
the plural include the singular.
SECTION 1.4. Action by or Consent of Noteholders and
Certificateholders. Whenever any provision of this Indenture refers to action to
be taken, or consented to, by Noteholders or Certificateholders, such provision
shall be deemed to refer to the Certificateholder or Noteholder, as the case may
be, of record as of the Record Date immediately preceding the date on which such
action is to be taken, or consent given, by Noteholders or Certificateholders.
Solely for the purposes of any action to be taken, or consented to, by
Noteholders or Certificateholders, any Note or Certificate registered in the
name of GreenPoint Mortgage Funding, Inc. or any Affiliate thereof shall be
deemed not to be outstanding; provided, however, that, solely for the purpose of
determining whether the Indenture Trustee or the Owner Trustee is entitled to
rely upon any such action or consent, only Notes or Certificates which the Owner
Trustee or the Indenture Trustee, respectively, knows to be so owned shall be so
disregarded.
SECTION 1.5. Conflict with TIA. If any provision hereof
limits, qualifies or conflicts with a provision of the TIA that is required
under the TIA to be part of and govern this Indenture, the latter provision
shall control and all provisions required by the TIA are hereby incorporated by
reference. If any provision of this Indenture modifies or excludes any provision
of the TIA that may be so modified or excluded, the latter provisions shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be.
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ARTICLE II
The Notes
SECTION 2.1. Form. The Class A-1 Notes and the Class A-2
Notes, in each case together with the Indenture Trustee's certificate of
authentication, shall be in substantially the form set forth in Exhibits A and
B, respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may, consistently herewith, be determined by the
officers executing such Notes, as evidenced by their execution of the Notes. Any
portion of the text of any Note may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Note.
Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibits A and B are part of the terms of this
Indenture.
SECTION 2.2. Execution, Authentication and Delivery. The Notes
shall be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be original or
facsimile.
Notes bearing the original or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.
The Indenture Trustee shall authenticate and deliver Class A-1
Notes for original issue in an aggregate principal amount of $193,275,000 and
Class A-2 Notes for original issue in the aggregate principal amount of
$52,370,000. The Class A-1 Notes and the Class A-2 Notes outstanding at any time
may not exceed such amounts except as provided in Section 2.6.
Each Note shall be dated the date of its authentication. The
Notes shall be issuable as registered Notes in the minimum denomination of
$1,000 and in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose, unless there appears attached to such
Note a certificate of authentication substantially in the form provided for
herein executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate attached to any Note shall be
conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder. Subject to Section 2.11, the Notes shall
be Book-Entry Notes.
SECTION 2.3. Registration; Registration of Transfer and
Exchange. The Issuer shall cause to be kept a register (the "Note Register") in
which, subject to such reasonable regulations as it may prescribe, the Issuer
shall provide for the registration of Notes and the registration of transfers of
Notes. The Indenture Trustee shall be "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. Upon any
resignation of
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any Note Registrar, the Issuer shall promptly appoint a successor
or, if it elects not to make such an appointment, assume the duties of Note
Registrar.
If a Person other than the Indenture Trustee is appointed by
the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt
written notice of the appointment of such Note Registrar and of the location,
and any change in the location, of the Note Register, and the Indenture Trustee
shall have the right to inspect the Note Register at all reasonable times and to
obtain copies thereof. The Indenture Trustee shall have the right to rely upon a
certificate executed on behalf of the Note Registrar by an Authorized Officer
thereof as to the names and addresses of the Holders of the Notes and the
principal amounts and number of such Notes.
Upon surrender for registration or transfer of any Note at the
office or agency of the Issuer to be maintained as provided in Section 3.2, and
if the requirements of Section 8-401(1) of the UCC are met, the Issuer shall
execute or cause the Indenture Trustee to authenticate one or more new Notes, in
any authorized denominations, of the same class and a like aggregate principal
amount. A Noteholder may also obtain from the Indenture Trustee, in the name of
the designated transferee or transferees one or more new Notes, in any
authorized denominations, of the same class and a like aggregate principal
amount. Such requirements shall not be deemed to create a duty in the Indenture
Trustee to monitor the compliance by the Issuer with Section 8-401 of the UCC.
At the option of the Holder, Notes may be exchanged for other
Notes in any authorized denominations, of the same class and a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, and if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute
and upon its request the Indenture Trustee shall authenticate the Notes which
the Noteholder making the exchange is entitled to receive. Such requirements
shall not be deemed to create a duty in the Indenture Trustee to monitor the
compliance by the Issuer with Section 8-401 of the UCC.
All Notes issued upon any registration of transfer or exchange
of Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of
transfer or exchange shall be (i) duly endorsed by, or be accompanied by a
written instrument of transfer in the form attached to Exhibits A and B, duly
executed by the Holder thereof or such Holder's attorney duly authorized in
writing, with such signature guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar all in accordance with the
Exchange Act, and (ii) accompanied by such other documents as the Note Registrar
may require.
No service charge shall be made to a Holder for any
registration of transfer or exchange of Notes, but the Note Registrar may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any registration of transfer or
exchange of Notes, other than exchanges pursuant to Section 2.4 or 9.6 not
involving any transfer.
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The Note Registrar shall not register the transfer of a
Definitive Note unless the Indenture Trustee has received a representation
letter (in form and substance satisfactory to the Indenture Trustee) from the
prospective transferee to the effect that either (a) such transferee is not an
employee benefit plan (as defined in Section 3(3) of ERISA) that is subject to
the provisions of Title I of ERISA or a plan (as defined in Section 4975(e)(1)
of the Code) that is subject to Section 4975 of the Code (each, a "Benefit
Plan") and is not acting on behalf of or investing the assets of a Benefit Plan
or (b) the acquisition and continued holding of such Note by the transferee will
be covered by a U.S. Department of Labor prohibited transaction class exemption.
Each Note Owner, by acceptance of a beneficial interest in a Book-Entry Note,
will be deemed to make one of the foregoing representations.
SECTION 2.4. Mutilated, Destroyed, Lost or Stolen Notes. If
(i) any mutilated Note is surrendered to the Note Registrar, or the Note
Registrar receives evidence to its satisfaction of the destruction, loss or
theft of any Note, and (ii) there is delivered to the Indenture Trustee and the
Insurer such security or indemnity as may be required by it to hold the Issuer,
the Indenture Trustee and the Insurer harmless, then, in the absence of notice
to the Issuer, the Note Registrar or the Indenture Trustee that such Note has
been acquired by a bona fide purchaser, and provided that the requirements of
Section 8-405 of the UCC are met, the Issuer shall execute and upon its request
the Indenture Trustee shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Note, a replacement Note (such
requirement shall not be deemed to create a duty in the Indenture Trustee to
monitor the compliance by the Issuer with Section 8-405); provided, however,
that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall
have become or within seven days shall be due and payable, or shall have been
called for redemption, the Issuer may, instead of issuing a replacement Note,
direct the Indenture Trustee, in writing, to pay such destroyed, lost or stolen
Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer,
the Indenture Trustee and the Insurer shall be entitled to recover such
replacement Note (or such payment) from the Person to whom it was delivered or
any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section,
the Issuer may require the payment by the Holder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute an
original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
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The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to
the replacement or payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.5. Persons Deemed Owners. Prior to due presentment
for registration of transfer of any Note, the Issuer, the Indenture Trustee and
the Insurer and any agent of the Issuer, the Indenture Trustee and the Insurer
may treat the Person in whose name any Note is registered (as of the Record
Date) as the owner of such Note for the purpose of receiving payments of
principal of and interest, if any on such Note and for all other purposes
whatsoever, whether or not such Note be overdue, and none of the Issuer, the
Insurer, the Indenture Trustee nor any agent of the Issuer, the Insurer or the
Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.6. Payment of Principal and Interest; Defaulted
Interest.
(a) The Notes shall accrue interest as provided herein, and
such amount shall be payable on each Payment Date as specified herein. Any
installment of interest or principal, if any, payable on any Note which is
punctually paid or duly provided for by the Issuer on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more
Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.11, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a Payment
Date or on the Final Scheduled Payment Date (and except for the Redemption Price
for any Note called for redemption pursuant to Section 10.1) which shall be
payable as provided below. The funds represented by any such checks returned
undelivered shall be held in accordance with Section 3.3.
(b) Upon written notice from the Issuer, the Indenture Trustee
shall notify the Person in whose name a Note is registered at the close of
business on the Record Date preceding the Payment Date on which the Issuer
expects that the final installment of principal of and interest on such Note
will be paid. Such notice shall be mailed or transmitted by facsimile prior to
such final Payment Date and shall specify that such final installment will be
payable only upon presentation and surrender of such Note and shall specify the
place where such Note may be presented and surrendered for payment of such
installment. Notices in connection with redemptions of Notes shall be mailed to
Noteholders as provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the
Notes, the Issuer shall pay defaulted interest (plus interest on such defaulted
interest to the extent lawful) at the applicable Note Rate to the extent lawful.
The Issuer may pay such defaulted interest to the Persons who are Noteholders on
a subsequent special record date, which date shall be at least five Business
Days prior to the payment date. The Issuer shall fix or cause to be fixed any
such special record date and payment date, and, at least 15 days before any such
special record date, the Issuer shall mail to each Noteholder and the Indenture
Trustee a notice that states the special record date, the payment date and the
amount of defaulted interest to be paid.
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(d) Promptly following the date on which all principal of and
interest on the Notes has been paid in full and the Notes have been surrendered
to the Indenture Trustee, the Indenture Trustee shall, upon written notice from
the Servicer of the amounts, if any, that the Insurer has paid in respect of the
Notes under the Policy or otherwise which has not been reimbursed to it, deliver
such surrendered Notes to the Insurer to the extent not previously cancelled or
destroyed.
SECTION 2.7. Cancellation. Subject to Section 2.6(d), all
Notes surrendered for payment, registration of transfer, exchange or redemption
shall, if surrendered to any Person other than the Indenture Trustee, be
delivered to the Indenture Trustee and shall be promptly canceled by the
Indenture Trustee. Subject to Section 2.6(d), the Issuer may at any time deliver
to the Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Notes so delivered shall be promptly canceled by the Indenture Trustee.
No Notes shall be authenticated in lieu of or in exchange for any Notes canceled
as provided in this Section, except as expressly permitted by this Indenture.
Subject to Section 2.6(d), all canceled Notes may be held or disposed of by the
Indenture Trustee in accordance with its standard retention or disposal policy
as in effect at the time unless the Issuer shall direct by an Issuer Order that
they be destroyed or returned to it; provided that such Issuer Order is timely
and the Notes have not been previously disposed of by the Indenture Trustee.
SECTION 2.8. Release of Collateral. The Indenture Trustee
shall, on or after the Termination Date, release any remaining portion of the
Trust Property from the lien created by this Indenture and deposit in the
Collection Account any funds then on deposit in any other Account. The Indenture
Trustee shall release property from the lien created by this Indenture pursuant
to this Section 2.8 only upon receipt of an Issuer Request by it accompanied by
an Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA Sections 314(c) and 314(d)(1)
meeting the applicable requirements of Section 11.1.
SECTION 2.9. Book-Entry Notes. The Notes, upon original
issuance, will be issued in the form of typewritten Notes representing the
Book-Entry Notes, to be delivered to The Depository Trust Company or its
custodian, the initial Clearing Agency, by, or on behalf of, the Issuer. Such
Notes shall initially be registered on the Note Register in the name of Cede &
Co., the nominee of the initial Clearing Agency, and no Note Owner will receive
a Definitive Note representing such Note Owner's interest in such Note, except
as provided in Section 2.11. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.11:
(i) the provisions of this Section shall be in full force
and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of
this Indenture (including the payment of principal of and
interest on the Notes and the giving of instructions or
directions hereunder) as the sole Holder of the Notes, and shall
have no obligation to the Note Owners;
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(iii) to the extent that the provisions of this Section
conflict with any other provisions of this Indenture, the
provisions of this Section shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Note Owners and
the Clearing Agency and/or the Clearing Agency Participants.
Unless and until Definitive Notes are issued pursuant to Section
2.11, the initial Clearing Agency will make book-entry transfers
among the Clearing Agency Participants and receive and transmit
payments of principal of and interest on the Notes to such
Clearing Agency Participants;
(v) whenever this Indenture requires or permits actions to
be taken based upon instructions or directions of Holders of
Notes evidencing a specified percentage of the Outstanding Amount
of the Notes, the Clearing Agency shall be deemed to represent
such percentage only to the extent that it has received
instructions to such effect from Note Owners and/or Clearing
Agency Participants owning or representing, respectively, such
required percentage of the beneficial interest in the Notes and
has delivered such instructions to the Indenture Trustee; and
(vi) Note Owners may receive copies of any reports sent to
Noteholders pursuant to this Indenture, upon written request,
together with a certification that they are Note Owners and
payment of reproduction and postage expenses associated with the
distribution of such reports, from the Indenture Trustee at the
Corporate Trust Office.
SECTION 2.10. Notices to Clearing Agency. Whenever a notice or
other communication to the Noteholders is required under this Indenture, unless
and until Definitive Notes shall have been issued to Note Owners pursuant to
Section 2.11, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Notes to the
Clearing Agency, and shall have no obligation to the Note Owners.
SECTION 2.11. Definitive Notes. If (i) the Servicer advises
the Indenture Trustee in writing that the Clearing Agency is no longer willing
or able to properly discharge its responsibilities with respect to the Notes,
and the Servicer is unable to locate a qualified successor, (ii) the Servicer at
its option advises the Indenture Trustee in writing that it elects to terminate
the book-entry system through the Clearing Agency or (iii) after the occurrence
of a Rapid Amortization Event, Note Owners representing beneficial interests
aggregating at least a majority of the Outstanding Amount of the Notes advise
the Indenture Trustee through the Clearing Agency in writing that the
continuation of a book entry system through the Clearing Agency is no longer in
the best interests of the Note Owners, then the Clearing Agency shall notify all
Note Owners and the Indenture Trustee of the occurrence of any such event and of
the availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Note or Notes representing
the Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee
shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be
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protected in relying on, such instructions. Upon the issuance of Definitive
Notes, the Indenture Trustee shall recognize the Holders of the Definitive Notes
as Noteholders.
ARTICLE III
Covenants
SECTION 3.1. Payment of Principal and Interest. The Issuer
will duly and punctually pay the principal of and interest on the Notes in
accordance with the terms of the Notes and this Indenture. The Notes shall be
debt obligations of the Trust and shall be limited in right of payment to
amounts available from the Trust as provided in this Indenture and the Trust
shall not otherwise be liable for payments on the Notes. No person shall be
personally liable for any amounts payable under the Notes. Amounts properly
withheld under the Code by any Person from a payment to any Noteholder of
interest and/or principal shall be considered as having been paid by the Issuer
to such Noteholder for all purposes of this Indenture.
SECTION 3.2. Maintenance of Office or Agency. The Issuer will
maintain in Chicago, Illinois, an office or agency where Notes may be
surrendered for registration, transfer or exchange of the Notes, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer will give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If at any time the Issuer
shall fail to maintain any such office or agency or shall fail to furnish the
Indenture Trustee with the address thereof, such surrenders, notices and demands
may be made or served at the Corporate Trust Office, and the Issuer hereby
appoints the Indenture Trustee as its agent to receive all such surrenders,
notices and demands.
SECTION 3.3. Money for Payments to be Held in Trust. The
Issuer will cause each Note Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee and the Insurer an instrument in
which such Note Paying Agent shall agree with the Indenture Trustee (and if the
Indenture Trustee acts as Note Paying Agent, it hereby so agrees), subject to
the provisions of this Section, that such Note Paying Agent will:
(i) hold all sums held by it for the payment of amounts
due with respect to the Notes in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such
Persons or otherwise disposed of as herein provided and pay such
sums to such Persons as herein provided;
(ii) give the Indenture Trustee written notice of any
default by the Issuer (or any other obligor upon the Notes) of
which it has actual knowledge in the making of any payment
required to be made with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee,
forthwith pay to the Indenture Trustee all sums so held in trust
by such Note Paying Agent;
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(iv) immediately resign as a Note Paying Agent and
forthwith pay to the Indenture Trustee all sums held by it in
trust for the payment of Notes if at any time it ceases to meet
the standards required to be met by a Note Paying Agent at the
time of its appointment; and
(v) comply with all requirements of the Code with respect
to the withholding from any payments made by it on any Notes of
any applicable withholding taxes imposed thereon and with respect
to any applicable reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by Issuer
Order direct any Note Paying Agent to pay to the Indenture Trustee all sums held
in trust by such Note Paying Agent, such sums to be held by the Indenture
Trustee upon the same trusts as those upon which the sums were held by such Note
Paying Agent; and upon such a payment by any Note Paying Agent to the Indenture
Trustee, such Note Paying Agent shall be released from all further liability
with respect to such money.
Subject to applicable laws with respect to the escheat of
funds, any money held by the Indenture Trustee or any Note Paying Agent in trust
for the payment of any amount due with respect to any Note and remaining
unclaimed for two years after such amount has become due and payable shall be
discharged from such trust and be paid to the Issuer on Issuer Request, and
shall be deposited by the Indenture Trustee in the Collection Account; and the
Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Issuer for payment thereof (but only to the extent of the amounts so
paid to the Issuer), and all liability of the Indenture Trustee or such Note
Paying Agent with respect to such trust money shall thereupon cease.
SECTION 3.4. Existence. The Issuer will keep in full effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other state or of the United States of
America, in which case the Issuer will keep in full effect its existence, rights
and franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification to do business in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Trust Property, the Notes, and each other
instrument or agreement included in the Trust Property.
SECTION 3.5. Protection of Trust Property. The Issuer intends
the security interest granted pursuant to this Indenture in favor of the Issuer
Secured Parties to be prior to all other liens in respect of the Trust Property,
and the Issuer shall take all actions necessary to obtain and maintain, in favor
of the Indenture Trustee, for the benefit of the Issuer Secured Parties, a first
lien on and a first priority, perfected security interest in the Trust Property.
The Issuer will from time to time prepare (or shall cause to be prepared),
execute and deliver all such supplements and amendments hereto and all such
financing statements, continuation statements, instruments of further assurance
and other instruments, and will take such other action necessary or advisable
to:
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(i) Grant more effectively all or any portion of the Trust
Property;
(ii) maintain or preserve the lien and security interest
(and the priority thereof) in favor of the Indenture Trustee for
the benefit of the Issuer Secured Parties created by this
Indenture or carry out more effectively the purposes hereof;
(iii) perfect, publish notice of or protect the validity
of any Grant made or to be made by this Indenture;
(iv) enforce any of the Collateral;
(v) preserve and defend title to the Trust Property and
the rights of the Indenture Trustee in such Trust Property
against the claims of all persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon
the Trust Property when due.
The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required by the Indenture Trustee pursuant to this Section;
provided that, such designation shall not be deemed to create a duty in the
Indenture Trustee or the Indenture Trustee to monitor the compliance of the
Issuer with respect to its duties under this Section 3.5 or the adequacy of any
financing statement, continuation statement or other instrument prepared by the
Issuer.
SECTION 3.6. Opinions as to Trust Property.
(a) On the Closing Date, the Issuer shall furnish to the
Indenture Trustee and the Insurer an Opinion of Counsel stating that, in the
opinion of such counsel, such actions have been taken with respect to the
recording and filing of this Indenture, any indentures supplemental hereto, and
any other requisite documents, and with respect to the execution and filing of
any financing statements and continuation statements, as are necessary to
perfect and make effective the first priority lien and security interest in
favor of the Indenture Trustee, for the benefit of the Issuer Secured Parties,
created by this Indenture.
(b) Within 90 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than six months after the
Closing Date, the Issuer shall furnish to the Indenture Trustee and the Insurer,
an Opinion of Counsel either stating that, in the opinion of such counsel, such
actions have been taken with respect to the recording, filing, re-recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as are necessary to maintain
the lien and security interest created by this Indenture and reciting the
details of such action or stating that in the opinion of such counsel, no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest of this Indenture.
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SECTION 3.7. Performance of Obligations; Servicing of Mortgage
Loans.
(a) The Issuer will not take any action and will use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Trust Property or that would result in
the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any such instrument or agreement,
except as ordered by any bankruptcy or other court or as expressly provided in
this Indenture, the Basic Documents or such other instrument or agreement.
(b) The Issuer may contract with other Persons acceptable to the
Insurer to assist it in performing its duties under this Indenture, and any
performance of such duties by a Person identified to the Indenture Trustee and
the Insurer in an Officer's Certificate of the Issuer shall be deemed to be
action taken by the Issuer. Initially, the Issuer has contracted with the
Servicer to assist the Issuer in performing its duties under this Indenture.
(c) The Issuer will punctually perform and observe all of its
obligations and agreements contained in this Indenture, the Basic Documents and
in the instruments and agreements included in the Trust Property, including, but
not limited, to preparing (or causing to be prepared) and filing (or causing to
be filed) all UCC financing statements and continuation statements required to
be filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Indenture Trustee, the Insurer or the Holders
of at least a majority of the Outstanding Amount of the Notes.
(d) If a Responsible Officer of the Owner Trustee shall have
actual knowledge of the occurrence of an Event of Servicing Termination under
the Sale and Servicing Agreement, the Issuer shall promptly notify the Indenture
Trustee, the Insurer and the Rating Agencies thereof in accordance with Section
11.4, and shall specify in such notice the action, if any, the Issuer is taking
in respect of such default. If an Event of Servicing Termination shall arise
from the failure of the Servicer to perform any of its duties or obligations
under the Sale and Servicing Agreement with respect to the Mortgage Loans, the
Issuer shall take all reasonable steps available to it to remedy such failure.
(e) The Issuer agrees that it will not waive timely performance
or observance by the Servicer or the Sponsor of their respective duties under
the Basic Documents (x) without the prior consent of the Insurer or (y) if the
effect thereof would adversely affect the Holders of the Notes.
SECTION 3.8. Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture or the
Basic Documents, sell, transfer, exchange or otherwise dispose of
any of the properties or assets of the Issuer, including those
included in the Trust Property, without the consent of the
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Insurer (which consent may not be unreasonably withheld;
provided, that if an Insurer Default has occurred and is
continuing, the Noteholders representing 66-2/3% of the
Outstanding Amount may direct the Indenture Trustee to sell or
dispose of the Trust Property if the Indenture Trustee receives
the Liquidation Price, as described in Section 12.1.
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other
than amounts properly withheld from such payments under the Code)
or assert any claim against any present or former Noteholder by
reason of the payment of the taxes levied or assessed upon any
part of the Trust Property; or
(iii) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien in favor of the
Indenture Trustee created by this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit
any Person to be released from any covenants or obligations with
respect to the Notes under this Indenture except as may be
expressly permitted hereby, (B) permit any lien, charge, excise,
claim, security interest, mortgage or other encumbrance (other
than the lien of this Indenture) to be created on or extend to or
otherwise arise upon or burden the Trust Property or any part
thereof or any interest therein or the proceeds thereof (other
than tax liens, mechanics' liens and other liens that arise by
operation of law, in each case on a Mortgaged Property and
arising solely as a result of an action or omission of the
related Obligor), (C) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any
such tax, mechanics' or other lien) security interest in the
Trust Property or (D) amend, modify or fail to comply with the
provisions of the Basic Documents without the prior written
consent of the Insurer, which consent may not be unreasonably
withheld.
SECTION 3.9. Annual Statement as to Compliance. The Issuer
will deliver to the Indenture Trustee and the Insurer, within 90 days after the
end of each fiscal year of the Issuer (commencing with the fiscal year ended
December 31, 1999), and otherwise in compliance with the requirements of TIA
Section 314(a)(4) an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that
(i) a review of the activities of the Issuer during such
year and of performance under this Indenture has been made under
such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions
and covenants under this Indenture throughout such year, or, if
there has been a default in the compliance of any such condition
or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.
SECTION 3.10. Issuer May Not Consolidate or Transfer Assets.
(a) The Issuer may not consolidate or merge with or into any
other Person.
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(b) Except as otherwise provided in the Sale and Servicing
Agreement, the Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the Trust Property, to any
Person.
SECTION 3.11. No Other Business. The Issuer shall not engage
in any business other than purchasing, owning, selling and managing the Mortgage
Loans and other assets in the manner contemplated by this Indenture and the
Basic Documents and activities incidental thereto.
SECTION 3.12. No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
Indebtedness except for (i) the Notes, (ii) obligations owing from time to time
to the Insurer under the Insurance Agreement and (iii) any other indebtedness
permitted by or arising under the Basic Documents, except that the Issuer shall
not incur any indebtedness that would cause it, or any portion thereof, to be
treated as a "taxable mortgage pool" under Section 7701 of the Code. The
proceeds of the Notes and the Certificates shall be used exclusively to fund the
Issuer's purchase of the Mortgage Loans and the other assets specified in the
Sale and Servicing Agreement, to fund the Pre-Funding Account and the Reserve
Fund and to pay the Issuer's organizational, transactional and start-up
expenses.
SECTION 3.13. Servicer's Obligations. The Issuer shall cause
the Servicer to comply with Sections 3.10 and 4.01 of the Sale and Servicing
Agreement and Section 8.5 herein.
SECTION 3.14. Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by the Sale and Servicing Agreement or this
Indenture, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.15. Capital Expenditures. The Issuer shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personality).
SECTION 3.16. Compliance with Laws. The Issuer shall comply
with the requirements of all applicable laws, the non-compliance with which
would, individually or in the aggregate, materially and adversely affect the
ability of the Issuer to perform its obligations under the Notes, this Indenture
or any Basic Document.
SECTION 3.17. Restricted Payments. The Issuer shall not,
directly or indirectly, (i) pay any dividend or make any distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, to the Owner Trustee or any owner of a beneficial interest
in the Issuer or otherwise with respect to any ownership or equity interest or
security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire
or otherwise acquire for value any such ownership or equity interest or security
or (iii) set aside or otherwise
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segregate any amounts for any such purpose; provided, however, that the Issuer
may make, or cause to be made, distributions to the Servicer, the Owner Trustee,
the Indenture Trustee and the Certificateholders as permitted by, and to the
extent funds are available for such purpose under, the Sale and Servicing
Agreement, this Indenture, or Trust Agreement. The Issuer will not, directly or
indirectly, make payments to or distributions from the Collection Account except
in accordance with this Indenture and the Basic Documents.
SECTION 3.18. Notice of Rapid Amortization Events and Events
of Servicing Termination. Upon a Responsible Officer of the Owner Trustee having
actual knowledge thereof, the Issuer agrees to give the Indenture Trustee, the
Insurer and the Rating Agencies prompt written notice of each Rapid Amortization
Event hereunder or Event of Servicing Termination under the Sale and Servicing
Agreement.
SECTION 3.19. Further Instruments and Acts. Upon request of
the Indenture Trustee or the Insurer, the Issuer will execute and deliver such
further instruments and do such further acts as may be reasonably necessary or
proper to carry out more effectively the purpose of this Indenture.
SECTION 3.20. Amendments of Sale and Servicing Agreement and
Trust Agreement. The Issuer shall not agree to any amendment to Section 9.01 of
the Sale and Servicing Agreement or Section 11.1 of the Trust Agreement to
eliminate the requirements thereunder that the Indenture Trustee, the Insurer or
the Holders of the Notes consent to amendments thereto as provided therein.
SECTION 3.21. Income Tax Characterization. For purposes of federal income, state
and local income and franchise and any other income taxes, the Issuer and the
Noteholders will treat the Notes as indebtedness of the Sponsor and hereby
instructs the Indenture Trustee to treat the Notes as indebtedness of the
Sponsor for federal and state tax reporting purposes.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.1. Satisfaction and Discharge of Indenture. Upon
payment in full of the Notes, this Indenture shall cease to be of further effect
with respect to the Notes except as to (i) rights of registration of transfer
and exchange, (ii) substitution of mutilated, destroyed, lost or stolen Notes,
(iii) rights of Noteholders to receive payments of principal thereof and
interest thereon, (iv) Sections 3.3, 3.4, 3.5, 3.8, 3.10, 3.12, 3.13, 3.20 and
3.21, (v) the rights, obligations and immunities of the Indenture Trustee
hereunder (including the rights of the Indenture Trustee under Section 6.7 and
the obligations of the Indenture Trustee under Section 4.2) and (vi) the rights
of Noteholders as beneficiaries hereof with respect to the property so deposited
with the Indenture Trustee payable to all or any of them, and the Indenture
Trustee, on demand of and at the expense of the Issuer, shall execute proper
instruments acknowledging satisfaction and discharge of this Indenture with
respect to the Notes, when
(A) either
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(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.4 and (ii) Notes for which payment
money has theretofore been deposited in trust or segregated and held in trust by
the Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.3) have been delivered to the Indenture Trustee for
cancellation and the Policy has terminated and been returned to the Insurer for
cancellation and all amounts owing to the Insurer have been paid in full; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their respective Final
Scheduled Payment Dates within one year, or
(iii) are to be called for redemption within one year
under arrangements satisfactory to the Indenture Trustee for the
giving of notice of redemption by the Indenture Trustee in the
name, and at the expense, of the Issuer, and in the case of (i),
(ii) or (iii) above
(A) the Issuer, has irrevocably deposited or caused to be
irrevocably deposited with the Indenture Trustee cash or direct obligations of
or obligations guaranteed by the United States of America (which will mature
prior to the date such amounts are payable), in trust for such purpose, in an
amount sufficient to pay and discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for cancellation when due on the
Final Scheduled Payment Date or Redemption Date (if Notes shall have been called
for redemption pursuant to Section 10.1), as the case may be;
(B) the Issuer has paid or caused to be paid all Insurer
Issuer Secured Obligations and all Indenture Trustee Issuer Secured Obligations;
and
(C) the Issuer has delivered to the Indenture Trustee and the
Insurer an Officer's Certificate, an Opinion of Counsel and if required by the
TIA, the Indenture Trustee or the Insurer an Independent Certificate from a firm
of certified public accountants, each meeting the applicable requirements of
Section 11.1(a) and each stating that all conditions precedent herein provided
relating to the satisfaction and discharge of this Indenture have been complied
with.
SECTION 4.2. Application of Trust Money. All monies deposited
with the Indenture Trustee pursuant to Section 4.1 hereof shall be held in trust
and applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Note Paying Agent, as
the Indenture Trustee may determine, to the Holders of the particular Notes for
the payment or redemption of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest.
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SECTION 4.3. Repayment of Monies Held by Note Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all monies then held by any Note Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.3 and thereupon such Note Paying Agent
shall be released from all further liability with respect to such monies.
ARTICLE V
Remedies
SECTION 5.1. Remedies. If a Rapid Amortization Event, with
respect to a Class of Notes, as described in Article XII shall have occurred and
be continuing, the Rapid Amortization Period, with respect to such Class of
Notes shall immediately commence and the related Noteholders shall be entitled
on each Payment Date to an amount equal to the Class A-1 Maximum Principal
Payment or the Class A-2 Maximum Principal Payment, as applicable, payable
during such Rapid Amortization Period. The rights contained in this Article V
are in addition to any rights which the Noteholders possess pursuant to Article
XII.
SECTION 5.2. Limitation of Suits. No Holder of any Note shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(i) such Holder has previously given written notice to the
Indenture Trustee of a continuing Rapid Amortization Event;
(ii) the Holders of not less than 25% of the Outstanding
Amount of the related Notes have made written request to the
Indenture Trustee to institute such proceeding with respect to
the Notes in respect of such Rapid Amortization Event in its own
name as Indenture Trustee hereunder;
(iii) such Holder or Holders have offered to the Indenture
Trustee indemnity reasonably satisfactory to it against the
costs, expenses and liabilities to be incurred in complying with
such request;
(iv) the Indenture Trustee for 60 days after its receipt
of such notice, request and offer of indemnity has failed to
institute such proceedings;
(v) no direction inconsistent with such written request
has been given to the Indenture Trustee during such 60-day period
by the Holders of a majority of the Outstanding Amount of the
related Notes; and
(vi) an Insurer Default shall have occurred and be
continuing;
it being understood and intended that no Holders of Notes shall have
any right in any manner whatsoever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Notes or to obtain or to seek to obtain priority or
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preference over any other Holders or to enforce any right under this Indenture,
except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting
or inconsistent requests and indemnity from two or more groups of Holders of
related Notes, each representing less than a majority of the Outstanding Amount
of the related Notes, the Indenture Trustee in its sole discretion may determine
what action, if any, shall be taken, notwithstanding any other provisions of
this Indenture.
SECTION 5.3. Unconditional Rights of Noteholders To Receive
Principal and Interest. Notwithstanding any other provisions in this Indenture,
the Holder of any Note shall have the right, which is absolute and
unconditional, to receive payment of the principal of and interest, if any, on
such Note on or after the respective due dates thereof expressed in such Note or
in this Indenture (or, in the case of redemption, on or after the Redemption
Date) and to institute suit for the enforcement of any such payment, and such
right shall not be impaired without the consent of such Holder.
SECTION 5.4. Restoration of Rights and Remedies. If the
Controlling Party or any Noteholder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, then and in every such case the Issuer, the
Insurer, the Indenture Trustee and the Noteholders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Indenture Trustee, the Insurer and the Noteholders shall continue as though no
such proceeding had been instituted.
SECTION 5.5. Rights and Remedies Cumulative. No right or
remedy herein conferred upon or reserved to the Controlling Party or to the
related Noteholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.6. Delay or Omission Not a Waiver. No delay or
omission of the Indenture Trustee, Controlling Party or any Holder of any Note
to exercise any right or remedy accruing upon any Rapid Amortization Period
shall impair any such right or remedy or constitute a waiver of any such Rapid
Amortization Period or an acquiescence therein. Every right and remedy given by
this Article V or by law to the Indenture Trustee, the Insurer or to the
Noteholders may be exercised from time to time, and as often as may be deemed
expedient, by the Indenture Trustee, the Insurer or by the Noteholders, as the
case may be.
SECTION 5.7. Control by Noteholders. If the Indenture Trustee
is the Controlling Party, the Holders of a majority of the Outstanding Amount of
the related Notes, with the consent of the Insurer, shall have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the Indenture Trustee pursuant to Section 12.1 with respect to the
related Notes or exercising any trust or power conferred on the Indenture
Trustee; provided that
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(i) such direction shall not be in conflict with any rule
of law or with this Indenture;
(ii) the Indenture Trustee may take any other action
deemed proper by the Indenture Trustee that is not inconsistent
with such direction;
provided, however, that, subject to Section 6.1, the Indenture Trustee need not
take any action that it determines might involve it in liability or might
materially adversely affect the rights of any related Noteholders not consenting
to such action.
SECTION 5.8. Undertaking for Costs. All parties to this
Indenture agree, and each Holder of any Note by such Holder's acceptance thereof
shall be deemed to have agreed, that any court may in its discretion require, in
any suit for the enforcement of any right or remedy under this Indenture, or in
any suit against the Indenture Trustee for any action taken, suffered or omitted
by it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by the
Indenture Trustee, (b) any suit instituted by the Insurer, any Noteholder, or
group of Noteholders with the prior written consent of the Insurer (so long as
no Insurer Default has occurred), in each case holding in the aggregate more
than 10% of the Outstanding Amount of the Notes or (c) any suit instituted by
any Noteholder for the enforcement of the payment of principal of or interest on
any Note on or after the respective due dates expressed in such Note and in this
Indenture (or, in the case of redemption, on or after the Redemption Date).
SECTION 5.9. Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture; and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
will not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.10. Action on Notes. The Indenture Trustee's right
to seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee, the Insurer or the Noteholders
shall be impaired by the recovery of any judgment by the Indenture Trustee or
the Insurer against the Issuer or by the levy of any execution under such
judgment upon any portion of the Trust Property or upon any of the assets of the
Issuer.
SECTION 5.11. Performance and Enforcement of Certain
Obligations.
(a) Promptly following a request from the Indenture Trustee
(at the direction of the Insurer) to do so and at the Servicer's expense, the
Issuer agrees to take all such lawful
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action as the Indenture Trustee may request to compel or secure the performance
and observance by the Sponsor and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement in accordance with the terms thereof, and to exercise any and all
rights, remedies, powers and privileges lawfully available to the Issuer under
or in connection with the Sale and Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, including the transmission of notices
of default on the part of the Sponsor or the Servicer thereunder and the
institution of legal or administrative actions or proceedings to compel or
secure performance by the Sponsor or the Servicer of each of their obligations
under the Sale and Servicing Agreement.
(b) If the Indenture Trustee is a Controlling Party and if a
Rapid Amortization Period has occurred and is continuing, the Indenture Trustee
may, and, at the written direction of the Holders of 66-2/3% of the Outstanding
Amount of the related Class of Notes shall, exercise all rights, remedies,
powers, privileges and claims of the Issuer against the Sponsor or the Servicer
under or in connection with the Sale and Servicing Agreement, including the
right or power to take any action to compel or secure performance or observance
by the Sponsor or the Servicer of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement, and any right of the
Issuer to take such action shall be suspended.
SECTION 5.12. Subrogation. The Indenture Trustee shall receive
as attorney-in-fact of each Noteholder any Insured Payment from the Insurer
pursuant to Policy. Any and all Insured Payments disbursed by the Indenture
Trustee from claims made under the Policy shall not be considered payment by the
Trust, and shall not discharge the obligations of the Trust with respect
thereto. The Insurer shall, to the extent it makes any payment with respect to
any Class of Notes, become subrogated to the rights of the recipient of such
payments to the extent of such payments. Subject to and conditioned upon any
payment with respect to any Class of Notes by or on behalf of the Insurer, the
Indenture Trustee shall assign to the Insurer all rights to the payment of
interest or principal with respect to such Class of Notes which are then due for
payment to the extent of all payments made by the Insurer. The Insurer may
exercise any option, vote, right, power or the like with respect to such Class
of Notes to the extent that it has made payment pursuant to the Policy.
SECTION 5.13. Preference Claims.
(a) In the event that the Indenture Trustee has received a
certified copy of an order of the appropriate court that any payment on a Note
has been avoided in whole or in part as a preference payment under applicable
bankruptcy law, the Indenture Trustee shall so notify the Insurer, shall comply
with the provisions of the Policy to obtain payment by the Insurer of such
avoided payment, and shall, at the time it provides notice to the Insurer,
notify Holders of the related Notes by mail that, in the event that any
Noteholder's payment is so recoverable, such Noteholder will be entitled to
payment pursuant to the terms of the Policy. The Indenture Trustee shall furnish
to the Insurer at its written request, the requested records it holds in its
possession evidencing the payments of principal of and interest on Notes, if
any, which have been made by the Indenture Trustee and subsequently recovered
from Noteholders, and the dates on which such payments were made. Pursuant to
the terms of the Policy, the Insurer will make such payment on behalf of the
related Noteholder to the receiver, conservator, debtor-in-
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possession or trustee in bankruptcy named in the Final Order (as defined in the
Policy) and not to the Indenture Trustee or any Noteholder directly.
(b) The Indenture Trustee shall promptly notify the Insurer of
any proceeding or the institution of any action (of which the Indenture Trustee
has actual knowledge) seeking the avoidance as a preferential transfer under
applicable bankruptcy, insolvency, receivership, rehabilitation or similar law
(a "Preference Claim") of any distribution made with respect to the Notes. Each
Holder, by its purchase of Notes, and the Indenture Trustee hereby agree that so
long as an Insurer Default shall not have occurred and be continuing, the
Insurer may at any time during the continuation of any proceeding relating to a
Preference Claim direct all matters relating to such Preference Claim,
including, without limitation, (i) the direction of any appeal of any order
relating to any Preference Claim and (ii) the posting of any surety, supersedes
or performance bond pending any such appeal at the expense of the Insurer, but
subject to reimbursement as provided in the Insurance Agreement. In addition,
and without limitation of the foregoing, as set forth in Section 5.12, the
Insurer shall be subrogated to, and each Noteholder and the Indenture Trustee
hereby delegate and assign, to the fullest extent permitted by law, the rights
of the Indenture Trustee and each Noteholder in the conduct of any proceeding
with respect to a Preference Claim, including, without limitation, all rights of
any party to an adversary proceeding action with respect to any court order
issued in connection with any such Preference Claim. All actions taken under
this Section 5.13(b) by the Indenture Trustee shall be taken in accordance with
the terms of the Policy.
ARTICLE VI
The Indenture Trustee
SECTION 6.1. Duties of Indenture Trustee.
(a) If a Rapid Amortization Event has occurred and is
continuing, the Indenture Trustee shall exercise the rights and powers vested in
it by this Indenture and the Basic Documents and 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; provided, however,
that if the Indenture Trustee is acting as Servicer, it shall use the same
degree of care and skill as is required of the Servicer under the Sale and
Servicing Agreement.
(b) Except during the continuance of a Rapid Amortization
Event
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read
into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Indenture Trustee
and conforming to the requirements of this Indenture; however,
the Indenture Trustee shall examine the certificates and opinions
to determine whether or not they conform on their face to the
requirements of this Indenture.
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(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph does not limit the effect of paragraph
(b) of this Section;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer
unless it is proved that the Indenture Trustee was negligent in
ascertaining the pertinent facts;
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
5.12; and
(iv) the Indenture Trustee shall not be charged with
knowledge of any failure by the Servicer to comply with the
obligations of the Servicer referred to in clauses (i) and (ii)
of Section 6.01 of the Sale and Servicing Agreement unless a
Responsible Officer of the Indenture Trustee at the Corporate
Trust Office obtains actual knowledge of such failure or
occurrence or the Indenture Trustee receives written notice of
such failure or occurrence from the Servicer, the Insurer or the
Holders of Notes evidencing more than 50% of the Outstanding
Amount.
(d) The Indenture Trustee shall not be liable for interest on
any money received by it except as the Indenture Trustee may agree in writing
with the Issuer.
(e) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or indemnity reasonably satisfactory to it against such
risk or liability is not reasonably assured to it.
(f) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section and to the provisions of the
TIA.
(g) The Indenture Trustee shall, upon three Business Days'
prior written notice to the Indenture Trustee, permit any representative of the
Insurer, during the Indenture Trustee's normal business hours, to examine all
books of account, records, reports and other papers of the Indenture Trustee
relating to the Notes, to make copies and extracts therefrom and to discuss the
Indenture Trustee's affairs and actions, as such affairs and actions relate to
the Indenture Trustee's duties with respect to the Notes, with the Indenture
Trustee's officers and employees responsible for carrying out the Indenture
Trustee's duties with respect to the Notes.
(h) The Indenture Trustee shall, and hereby agrees that it
will, perform all of the obligations and duties required of it under the Sale
and Servicing Agreement.
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(i) The Indenture Trustee shall, and hereby agrees that it
will, hold the Policy in trust, and will hold any proceeds of any claim on the
Policy in trust solely for the use and benefit of the Noteholders.
(j) In no event shall Bank One, National Association, in any
of its capacities hereunder, be deemed to have assumed any duties of the Owner
Trustee under the Delaware Business Trust Statute, common law, or the Trust
Agreement.
SECTION 6.2. Rights of Indenture Trustee.
(a) The Indenture Trustee may rely on any document reasonably
believed by it to be genuine and to have been signed or presented by the proper
person. The Indenture Trustee need not investigate any fact or matter stated in
the document.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on the Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that the Indenture Trustee's
conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Indenture Trustee shall be under no obligation to
institute, conduct or defend any litigation under this Indenture or in relation
to this Indenture, at the request, order or direction of any of the Holders of
Notes or the Controlling Party, pursuant to the provisions of this Indenture,
unless such Holders of Notes or the Controlling Party shall have offered to the
Indenture Trustee reasonable security or indemnity against the costs, expenses
and liabilities that may be incurred therein or thereby; provided, however, that
the Indenture Trustee shall, upon the occurrence of a Rapid Amortization Event
or Event of Servicing Termination as defined in the Sale and Servicing Agreement
(that has not been cured or waived), exercise the rights and powers vested in it
by this Indenture or the Sale and Servicing Agreement with reasonable care and
skill.
(g) The Indenture 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
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writing to do so by the Insurer or by the Holders of Notes evidencing not less
than 25% of the Outstanding Amount thereof; provided, however, that if the
payment within a reasonable time to the Indenture 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 Indenture Trustee, not reasonably assured to the
Indenture Trustee by the security afforded to it by the terms of this Indenture
or the Sale and Servicing Agreement, the Indenture Trustee may require indemnity
reasonably satisfactory to it against such cost, expense or liability as a
condition to so proceeding; the reasonable expense of every such examination
shall be paid by the Person making such request, or, if paid by the Indenture
Trustee shall be reimbursed by the Person making such request upon demand.
(h) The Indenture Trustee shall not be accountable, shall have
no liability and makes no representation as to any acts or omissions hereunder
of the Servicer until such time as the Indenture Trustee may be required to act
as Servicer.
SECTION 6.3. Individual Rights of Indenture Trustee. The
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Note
Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same
with like rights. However, the Indenture Trustee must comply with Sections 6.11
and 6.12.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture
Trustee shall not be responsible for and makes no representation as to the
validity or adequacy of this Indenture, the Trust Property or the Notes, it
shall not be accountable for the Issuer's use of the proceeds from the Notes,
and it shall not be responsible for any statement of the Issuer in the Indenture
or in any document issued in connection with the sale of the Notes or in the
Notes other than the Indenture Trustee's certificate of authentication.
SECTION 6.5. Notice of Rapid Amortization Events and Events of
Servicing Termination. If a Rapid Amortization Period or an Event of Servicing
Termination occurs and is continuing and if it is either known by, or written
notice of the existence thereof has been delivered to, a Responsible Officer of
the Indenture Trustee, the Indenture Trustee shall mail to each Noteholder of
such event within 90 days after such knowledge or notice occurs. Except in the
case of a default in payment of principal of or interest on any Note, the
Indenture Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Noteholders.
SECTION 6.6. Reports by Indenture Trustee to Holders. Upon
written request, the Note Paying Agent or the Servicer shall on behalf of the
Issuer deliver to each Noteholder such information as may be reasonably required
to enable such Holder to prepare its Federal and state income tax returns
required by law.
SECTION 6.7. Compensation and Indemnity.
(a) Pursuant to Section 8.6 and subject to Section 6.10
herein, the Issuer shall, or shall cause the Servicer to, pay to the Indenture
Trustee from time to time compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation
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of a trustee of an express trust. The Issuer shall or shall cause the Servicer
to reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts. The Issuer shall or shall cause the
Servicer to indemnify the Indenture Trustee and its respective officers,
directors, employees and agents against any and all loss, liability or expense
(including attorneys' fees and expenses) incurred by each of them in connection
with the acceptance or the administration of this trust and the performance of
its duties hereunder. The Indenture Trustee shall notify the Issuer and the
Servicer promptly of any claim for which it may seek indemnity. Failure by the
Indenture Trustee to so notify the Issuer and the Servicer shall not relieve the
Issuer of its obligations hereunder or the Servicer of its obligations under
Article VIII of the Sale and Servicing Agreement. The Issuer shall or shall
cause the Servicer to defend the claim, the Indenture Trustee may have separate
counsel and the Issuer shall or shall cause the Servicer to pay the fees and
expenses of such counsel. Neither the Issuer nor the Servicer need reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.
(b) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section shall survive the discharge of this Indenture.
Notwithstanding anything else set forth in this Indenture or the Basic
Documents, the Indenture Trustee agrees that the obligations of the Issuer (but
not the Servicer) to the Indenture Trustee hereunder and under the Basic
Documents shall be recourse to the Trust Property only and specifically shall
not be recourse to the assets of the Issuer or any Securityholder. In addition,
the Indenture Trustee agrees that its recourse to the Issuer, the Trust
Property, the Sponsor and amounts held in the Reserve Fund shall be limited to
the right to receive the distributions referred to in Section 8.6 herein.
SECTION 6.8. Replacement of Indenture Trustee. The Indenture
Trustee may resign at any time by so notifying the Issuer and the Insurer by
written notice. Upon receiving such notice of resignation, the Issuer shall
promptly appoint a successor Indenture Trustee (approved in writing by the
Insurer, so long as such approval is not unreasonably withheld) by written
instrument, in duplicate, one copy of such instrument shall be delivered to the
resigning Indenture Trustee (who shall deliver a copy to the Servicer) and one
copy to the successor Trustee; provided, however, that any such successor
Indenture Trustee shall be subject to the prior written approval of the
Servicer. The Issuer may and, at the request of the Insurer shall, remove the
Indenture Trustee, if:
(i) the Indenture Trustee fails to comply with Section
6.11;
(ii) a court having jurisdiction in the premises in
respect of the Indenture Trustee in an involuntary case or
proceeding under federal or state banking or bankruptcy laws, as
now or hereafter constituted, or any other applicable federal or
state bankruptcy, insolvency or other similar law, shall have
entered a decree or order granting relief or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator (or similar official) for the Indenture Trustee or
for any substantial part of the Indenture Trustee's property, or
ordering the winding-up or liquidation of the Indenture Trustee's
affairs;
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(iii) an involuntary case under the federal bankruptcy
laws, as now or hereafter in effect, or another present or future
federal or state bankruptcy, insolvency or similar law is
commenced with respect to the Indenture Trustee and such case is
not dismissed within 60 days;
(iv) the Indenture Trustee commences a voluntary case
under any federal or state banking or bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency or other similar law, or consents to the
appointment of or taking possession by a receiver, liquidator,
assignee, custodian, trustee, conservator, sequestrator (or other
similar official) for the Indenture Trustee or for any
substantial part of the Indenture Trustee's property, or makes
any assignment for the benefit of creditors or fails generally to
pay its debts as such debts become due or takes any corporate
action in furtherance of any of the foregoing; or
(v) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy
exists in the office of Indenture Trustee for any reason (the Indenture Trustee
in such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee acceptable to the
Insurer. If the Issuer fails to appoint such a successor Indenture Trustee, the
Insurer may appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee, to the Insurer
and to the Issuer. Thereupon the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the retiring Indenture Trustee
under this Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee.
If a successor Indenture Trustee does not take office within
30 days after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, the Issuer or the Holders of a majority in Outstanding Amount
of the Notes may petition any court of competent jurisdiction for the
appointment of a successor Indenture Trustee acceptable to the Insurer.
If the Indenture Trustee fails to comply with Section 6.11,
any Noteholder may petition any court of competent jurisdiction for the removal
of the Indenture Trustee and the appointment of a successor Indenture Trustee
acceptable to the Insurer.
Any resignation or removal of the Indenture Trustee and
appointment of a successor Indenture Trustee pursuant to any of the provisions
of this Section shall not become effective until acceptance of appointment by
the successor Indenture Trustee pursuant to Section 6.8 and payment of all fees
and expenses owed to the outgoing Indenture Trustee.
Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section, the Issuer's and the Servicer's indemnity obligations
under Section 6.7 shall continue for the benefit of the retiring Indenture
Trustee and the Servicer shall pay any amounts owing to the Indenture Trustee.
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SECTION 6.9. Successor Indenture Trustee by Merger. If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation without any further act shall be the successor Indenture Trustee.
In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee.
(a) Notwithstanding any other provisions of this Indenture, at
any time, for the purpose of meeting any legal requirement of any jurisdiction
in which any part of the Trust may at the time be located, the Indenture Trustee
with the consent of the Insurer shall have the power and may execute and deliver
all instruments to appoint one or more Persons to act as a co-trustee or
co-trustees, or separate trustee or separate trustees, of all or any part of the
Trust, and to vest in such Person or Persons, in such capacity and for the
benefit of the Noteholders, such title to the Trust, or any part hereof, and,
subject to the other provisions of this Section, such powers, duties,
obligations, rights and trusts as the Indenture Trustee may consider necessary
or desirable. No co-trustee or separate trustee hereunder shall be required to
meet the terms of eligibility as a successor trustee under Section 6.11 and no
notice to Noteholders of the appointment of any co-trustee or separate trustee
shall be required under Section 6.8 hereof.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred
or imposed upon the Indenture Trustee shall be conferred or
imposed upon and exercised or performed by the Indenture Trustee
and such separate trustee or co-trustee jointly (it being
understood that such separate trustee or co-trustee is not
authorized to act separately without the Indenture Trustee
joining in such act), except to the extent that under any law of
any jurisdiction in which any particular act or acts are to be
performed the Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such
jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of
the Indenture Trustee;
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(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder,
including acts or omissions of predecessor or successor trustees;
and
(iii) the Indenture Trustee and the Servicer acting
jointly may at any time accept the resignation of or remove any
separate trustee or co-trustee except that following the
occurrence of an Event of Servicing Termination, the Indenture
Trustee acting alone may accept the resignation of or remove any
separate trustee or co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee, its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, dissolve, become insolvent, become incapable of
acting, resign or be removed, all of its estates, properties, rights, remedies
and trusts shall vest in and be exercised by the Indenture Trustee, to the
extent permitted by law, without the appointment of a new or successor trustee.
(e) The Servicer shall be responsible for the fees of any
co-trustee or separate trustee appointed hereunder.
SECTION 6.11. Eligibility; Disqualification. The Indenture
Trustee shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee shall have a combined capital and surplus of at least
$50,000,000 as set forth in its most recent published annual report of
condition. The Indenture Trustee shall provide copies of such reports to the
Insurer upon request. The Indenture Trustee shall comply with TIA Section
310(b), including the optional provision permitted by the second sentence of TIA
Section 310(b)(9); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA Section 310(b)(1) are met.
SECTION 6.12. Preferential Collection of Claims Against
Issuer. The Indenture Trustee shall comply with TIA Section 3.11(a), excluding
any creditor relationship listed in TIA Section 311(b). An Indenture Trustee who
has resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated.
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SECTION 6.13. Appointment and Powers. Subject to the terms and
conditions hereof, each of the Issuer Secured Parties hereby appoints Bank One,
National Association as the Indenture Trustee with respect to the Collateral,
and Bank One, National Association hereby accepts such appointment and agrees to
act as Indenture Trustee with respect to the Trust Property for the Issuer
Secured Parties, to maintain custody and possession of such Trust Property
(except as otherwise provided hereunder) and to perform the other duties of the
Indenture Trustee in accordance with the provisions of this Indenture and the
other Basic Documents. Each Issuer Secured Party hereby authorizes the Indenture
Trustee to take such action on its behalf, and to exercise such rights,
remedies, powers and privileges hereunder, as the Controlling Party may direct
and as are specifically authorized to be exercised by the Indenture Trustee by
the terms hereof, together with such actions, rights, remedies, powers and
privileges as are reasonably incidental thereto. The Indenture Trustee shall act
upon and in compliance with the written instructions of the Controlling Party
delivered pursuant to this Indenture promptly following receipt of such written
instructions; provided that the Indenture Trustee shall not act in accordance
with any instructions (i) which are not authorized by, or in violation of the
provisions of, this Indenture or (ii) for which the Indenture Trustee has not
received reasonable indemnity. Receipt of such instructions shall not be a
condition to the exercise by the Indenture Trustee of its express duties
hereunder, except where this Indenture provides that the Indenture Trustee is
permitted to act only following and in accordance with such instructions.
SECTION 6.14. Performance of Duties. The Indenture Trustee
shall have no duties or responsibilities except those expressly set forth in
this Indenture and the other Basic Documents to which the Indenture Trustee is a
party or as directed by the Controlling Party in accordance with this Indenture.
The Indenture Trustee shall not be required to take any discretionary actions
hereunder except at the written direction and with the indemnification of the
Controlling Party. The Indenture Trustee shall, and hereby agrees that it will,
perform all of the duties and obligations required of it under the Sale and
Servicing Agreement.
SECTION 6.15. Limitation on Liability. Neither the Indenture
Trustee nor any of its directors, officers, employees and agents shall be liable
for any action taken or omitted to be taken by it or them hereunder, or in
connection herewith, except that the Indenture Trustee shall be liable for its
negligence, bad faith or willful misconduct; nor shall the Indenture Trustee be
responsible for the validity, effectiveness, value, sufficiency or
enforceability against the Issuer of this Indenture or any of the Trust Property
(or any part thereof).
SECTION 6.16. Reliance Upon Documents. In the absence of
negligence, bad faith or willful misconduct on its part, the Indenture Trustee
shall be entitled to rely on any communication, instrument, paper or other
document reasonably believed by it to be genuine and correct and to have been
signed or sent by the proper Person or Persons and shall have no liability in
acting, or omitting to act, where such action or omission to act is in
reasonable reliance upon any statement or opinion contained in any such document
or instrument.
SECTION 6.17. Representations and Warranties of the Indenture
Trustee. The Indenture Trustee represents and warrants to the Issuer and to each
Issuer Secured Party as follows:
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(a) Due Organization. The Indenture Trustee is a national
banking association, duly organized, validly existing and in good standing under
the laws of the United States and is duly authorized and licensed under
applicable law to conduct its business as presently conducted.
(b) Corporate Power. The Indenture Trustee has all requisite
right, power and authority to execute and deliver this Indenture and to perform
all of its duties as the Indenture Trustee hereunder.
(c) Due Authorization. The execution and delivery by the
Indenture Trustee of this Indenture and the other Basic Documents to which it is
a party, and the performance by the Indenture Trustee of its duties hereunder
and thereunder, have been duly authorized by all necessary corporate
proceedings, are required for the valid execution and delivery by the Indenture
Trustee, or the performance by the Indenture Trustee, of this Indenture and such
other Basic Documents.
(d) Valid and Binding Indenture. The Indenture Trustee has
duly executed and delivered this Indenture and each other Basic Document to
which it is a party, and each of this Indenture and each such other Basic
Document constitutes the legal, valid and binding obligation of the Indenture
Trustee, enforceable against the Indenture Trustee in accordance with its terms,
except as (i) such enforceability may be limited by bankruptcy, insolvency,
reorganization and similar laws relating to or affecting the enforcement of
creditors' rights generally and (ii) the availability of equitable remedies may
be limited by equitable principles of general applicability.
SECTION 6.18. Waiver of Setoffs. The Indenture Trustee hereby
expressly waives any and all rights of setoff that the Indenture Trustee may
otherwise at any time have under applicable law with respect to any Account and
agrees that amounts in the Accounts shall at all times be held and applied
solely in accordance with the provisions hereof.
SECTION 6.19. Control by the Controlling Party. The Indenture
Trustee shall comply with notices and instructions given by the Issuer only if
accompanied by the written consent of the Controlling Party.
SECTION 6.20. Trustee May Enforce Claims Without Possession of
Notes. All rights of action and claims under this Indenture or the Notes may be
prosecuted and enforced by the Indenture Trustee without the possession of any
of the Notes or the production thereof in any proceeding relating thereto, and
such proceeding instituted by the Indenture Trustee shall be brought in its own
name or in its capacity as Indenture Trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursement and advances of the Indenture Trustee, its agents and counsel, be
for the ratable benefit of the Noteholders in respect of which such judgment has
been recovered.
SECTION 6.21. Suits for Enforcement. In case an Event of
Servicing Termination or other default by the Servicer or the Sponsor hereunder
shall occur and be continuing, the Indenture Trustee, if the Controlling Party
(and if not the Controlling Party, with the consent of the Insurer), may proceed
to protect and enforce its rights and the rights of the
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Noteholders under this Indenture by a suit, action or proceeding in equity or at
law or otherwise, whether for the specific performance of any covenant or
agreement contained in this Indenture or in aid of the execution of any power
granted in this Indenture or for the enforcement of any other legal, equitable
or other remedy, as the Indenture Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Indenture Trustee
and the Noteholders.
SECTION 6.22. Mortgagor Claims. In connection with any offset
defenses, or affirmative claim for recovery, asserted in legal actions brought
by Mortgagors under one or more Mortgage Loans based upon provisions therein or
upon other rights or remedies arising from any requirements of law applicable to
the Mortgage Loans:
(a) The Indenture Trustee is the holder of the Mortgage Loans
only as trustee on behalf of the holders of the Notes, and not as a principal or
in any individual or personal capacity.
(b) The Indenture Trustee shall not be personally liable for,
or obligated to pay Mortgagors, any affirmative claims asserted thereby, or
responsible to holders of the Notes for any offset defense amounts applied
against Mortgage Loan payments, pursuant to such legal actions.
(c) The Indenture Trustee will pay, solely from available
Trust money, affirmative claims for recovery by Mortgagors only pursuant to
final judicial orders or judgments, or judicially-approved settlement
agreements, resulting from such legal actions.
(d) The Indenture Trustee will comply with judicial orders and
judgments which require its actions or cooperation in connection with
Mortgagors' legal actions to recover affirmative claims against holders of the
Notes.
(e) The Indenture Trustee will cooperate with and assist the
Servicer, the Sponsor, or holders of the Notes in their defense of legal actions
by Mortgagors to recover affirmative claims if such cooperation and assistance
is not contrary to the interests of the Indenture Trustee as a party to such
legal actions and if the Indenture Trustee is satisfactorily indemnified for all
liability, costs and expenses arising therefrom.
(f) The Issuer hereby agrees to indemnify, hold harmless and
defend the Indenture Trustee from and against any and all liability, loss, costs
and expenses of the Indenture Trustee resulting from any affirmative claims for
recovery asserted or collected by Mortgagors under the Mortgage Loans.
ARTICLE VII
Noteholders' Lists and Reports
SECTION 7.1. Issuer To Furnish To Indenture Trustee Names and
Addresses of Noteholders. The Issuer will furnish or cause to be furnished to
the Indenture Trustee (a) not more than five days after the earlier of (i) each
Record Date and (ii) three months after the last
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Record Date, a list, in such form as the Indenture Trustee may reasonably
require, of the names and addresses of the Holders as of such Record Date, (b)
at such other times as the Indenture Trustee may request in writing, within 30
days after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than 10 days prior to the time such list is
furnished; provided, however, that so long as the Indenture Trustee is the Note
Registrar, no such list shall be required to be furnished. The Indenture Trustee
or, if the Indenture Trustee is not the Note Registrar, the Issuer shall furnish
to the Insurer or the Issuer in writing upon their written request and at such
other times as the Insurer or the Issuer may request a copy of the list.
SECTION 7.2. Preservation of Information; Communications to
Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of the Holders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 7.1 and the names and addresses of Holders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.1 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes.
(c) The Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
SECTION 7.3. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission,
copies of the annual reports and copies of the information,
documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules
and regulations prescribe) which the Issuer may be required to
file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to
time by the Commission such additional information, documents and
reports with respect to compliance by the Issuer with the
conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in
TIA Section 313(c)) such summaries of any information, documents
and reports required to be filed by the Issuer pursuant to
clauses (i) and (ii) of this Section 7.3(a) as may be required
by rules and regulations prescribed from time to time by the
Commission.
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(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall end on December 31 of each year.
SECTION 7.4. Reports by Indenture Trustee. If required by TIA
Section 313(a), within 60 days after each December 31, beginning with December
31, 1999, the Indenture Trustee shall mail to each Noteholder as required by TIA
Section 313(c) a brief report dated as of such date that complies with TIA
Section 313(a). The Indenture Trustee also shall comply with TIA Section 313(b).
A copy of each report at the time of its mailing to
Noteholders shall be filed by the Indenture Trustee with the Commission and each
stock exchange, if any, on which the Notes are listed. The Issuer shall notify
the Indenture Trustee if and when the Notes are listed on any stock exchange.
ARTICLE VIII
Payments and Statements to Noteholders and Certificateholders;
Accounts, Disbursements and Releases
SECTION 8.1. Collection of Money. Except as otherwise
expressly provided herein, the Indenture Trustee may demand payment or delivery
of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture and the Sale and Servicing Agreement. The Indenture Trustee shall
apply all such money received by it as provided in this Indenture and the Sale
and Servicing Agreement. Except as otherwise expressly provided in this
Indenture or in the Sale and Servicing Agreement, if any default occurs in the
making of any payment or performance under any agreement or instrument that is
part of the Trust Property, the Indenture Trustee may take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
SECTION 8.2. Release of Trust Property.
(a) Subject to Section 8.10 and the payment of its fees and
expenses pursuant to Section 6.7, the Indenture Trustee may, and when required
by the Issuer and the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture or
the Sale and Servicing Agreement. No party relying upon an instrument executed
by the Indenture Trustee as provided in this Article VIII shall be bound to
ascertain the Indenture Trustee's authority, inquire into the satisfaction of
any conditions precedent or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no
Notes outstanding and all sums due the Indenture Trustee pursuant to Section 6.7
and to the Insurer pursuant to the Insurance Agreement have been paid, release
any remaining portion of the Trust Property that secured the Notes from the lien
of this Indenture and release to the Issuer or any other Person entitled thereto
any funds then on deposit in the Accounts. The Indenture Trustee shall release
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property from the lien of this Indenture pursuant to this Section 8.2(b) only
upon receipt of an Issuer Request accompanied by an Officer's Certificate, an
Opinion of Counsel and (if required by the TIA) Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(1) meeting the applicable
requirements of Section 11.1.
SECTION 8.3. Establishment of Accounts. The Sponsor shall
cause to be established, and the Indenture Trustee shall maintain, at the
Corporate Trust Office of the Indenture Trustee, a Collection Account, a
Pre-Funding Account and a Reserve Fund to be held by the Indenture Trustee in
the name of the Trust for the benefit of the Noteholders and the Insurer, as
their interests may appear. Each account shall be an Eligible Account. In
addition, the Sponsor shall be permitted to withdraw amounts from the Collection
Account from time to time as described in Section 3.03 of the Sale and Servicing
Agreement.
SECTION 8.4. The Policy.
(a) On each Determination Date the Indenture Trustee shall
determine from the related Servicing Certificate with respect to the immediately
following Payment Date, the Class A-1 Deficiency Amount and the Class A-2
Deficiency Amount, if any.
(b) If the Indenture Trustee determines pursuant to paragraph
(a) above that a Class A-1 Deficiency Amount would exist, the Indenture Trustee
shall complete a Notice in the form of Exhibit A to the Policy and submit such
notice to the Insurer no later than 12:00 noon New York City time on the third
Business Day preceding such Payment Date as a claim for a payment in an amount
equal to the Class A-1 Deficiency Amount.
(c) If the Indenture Trustee determines pursuant to paragraph
(a) above that a Class A-2 Deficiency Amount would exist, the Indenture Trustee
shall complete a Notice in the form of Exhibit A to the Policy and submit such
notice to the Insurer no later than 12:00 noon New York City time on the third
Business Day preceding such Payment Date as a claim for a payment in an amount
equal to the Class A-2 Deficiency Amount.
(d) [Intentionally Omitted].
(e) Upon receipt of payments made pursuant to the Policy from
the Insurer on behalf of the related Noteholders, the Indenture Trustee shall
deposit such payments in the Collection Account and shall distribute such
payments, or the proceeds thereof, in accordance with Section 8.6(d) hereof to
the related Noteholders.
(f) The Indenture Trustee shall (i) receive payments made
pursuant to the Policy as attorney-in-fact of each related Noteholder receiving
any Insured Payment from the Insurer and (ii) disburse such Insured Payment to
the related Noteholders as set forth in Section 8.6(d) hereof. The Insurer shall
be entitled to receive the related Reimbursement Amount pursuant to Section
8.6(d)(vi) hereof with respect to each Insured Payment made by the Insurer. The
Indenture Trustee hereby agrees on behalf of each Noteholder and the Trust for
the benefit of the Insurer that it recognizes that to the extent the Insurer
makes payments made pursuant to the Policy, either directly or indirectly (as by
paying through the Indenture Trustee), to the related Noteholders, the Insurer
will be subrogated to the related Noteholders and will be entitled to receive
such related Reimbursement Amount.
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SECTION 8.5. Reserve Fund.
(a) On each Payment Date the Indenture Trustee shall deposit
to the Reserve Fund the amounts, if any, described in Section 8.6(d)(ix) hereof.
(b)(i) If, on any Payment Date, and after taking into account
the application of the Pool I Available Funds plus any Crossover Amount payable
from Pool II (but not the proceeds of any Insured Payment) to the items listed
in clauses (i) through (vii) of Section 8.6(d) hereof with respect to Pool I on
such Payment Date (x) the full amount of the Class A-1 Interest Payment Amount
(excluding any Relief Act Shortfalls) has not been paid (y) a Pool I
Overcollateralization Deficit would result (such deficiency the "Pool I
Deficiency Amount") and/or (z) a Class A-1 Reimbursement Amount exists, the
Indenture Trustee shall withdraw from the Reserve Fund and deposit in the
Collection Account an amount with respect to the Class A-1 Notes equal to the
lesser of (x) the product of (a) the amount then on deposit in the Reserve Fund
and (b) a fraction, the numerator of which is the Pool I Deficiency Amount and
the denominator of which is the sum of (i) the Pool I Deficiency Amount and (ii)
the Pool II Deficiency Amount and (y) the Pool I Deficiency Amount.
(ii) If, on any Payment Date, and after taking into
account, the application of the Pool II Available Funds plus any Crossover
Amount payable from Pool I (but not the proceeds of any Insured Payment) to the
items listed in clauses (i) through (vii) of Section 8.6(d) hereof with respect
to Pool II on such Payment Date (x) the full amount of the Class A-2 Interest
Payment Amount (excluding any Relief Act Shortfalls) has not been paid, (y) a
Pool II Overcollateralization Deficit would result (such deficiency, the "Pool
II Deficiency Amount"), and/or (z) a Class A-2 Reimbursement Amount exists, the
Indenture Trustee shall withdraw from the Reserve Fund and deposit in the
Collection Account an amount with respect to the Class A-2 Notes equal to the
lesser of (x) the product of (a) the amount then on deposit in the Reserve Fund
and (b) a fraction, the numerator of which is the Pool II Deficiency Amount and
the denominator of which is the sum of (i) the Pool II Deficiency Amount and
(ii) the Pool I Deficiency Amount and (y) the Pool II Deficiency Amount.
(c)(i) If, on any Payment Date, (A) the sum of (i) the Pool I
Overcollateralization Amount plus (ii) the Pool II Overcollateralization Amount
after taking into account all distributions on such Payment Date other than any
distribution of any Reserve Reduction Amounts exceeds (B) the sum of (i) the
Pool I Specified Overcollateralization Amount plus (ii) the Pool II Specified
Overcollateralization Amount for such Payment Date (such excess being "Reserve
Reduction Amount"), the Reserve Reduction Amount shall be released from the
Reserve Account and distributed to the Certificateholders.
SECTION 8.6. Priority of Distributions.
(a) The Indenture Trustee shall deposit to the Collection
Account, with respect to Pool I, without duplication, upon receipt, (i) any
payments related to the Class A-1 Notes made pursuant to the Note Policy and
(ii) the proceeds of any liquidation of the assets of the Trust, (iii) Interest
Collections and Principal Collections remitted by the Servicer, together with
any Substitution Amounts, and any Loan Purchase Price amounts received by the
Indenture Trustee relating to such Pool, (iv) on the Payment Date occurring in
January 2000, the
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Capitalized Interest Requirement to be transferred pursuant to Section 8.9(e)
hereof relating to Pool I, (v) the portion of the amount, if any, to be
transferred on such Payment Date from the Pre-Funding Account, pursuant to
Section 8.9(f) hereof and (vi) the amount, if any, to be transferred on such
Payment Date from the Reserve Fund pursuant to Section 8.5(b)(i) hereof.
(b) The Indenture Trustee shall deposit to the Collection
Account, with respect to Pool II, without duplication, upon receipt, (i) any
payments related to the Class A-2 Notes made pursuant to the Note Policy and
(ii) the proceeds of any liquidation of the assets of the Trust, (iii) Interest
Collections and Principal Collections remitted by the Servicer, together with
any Substitution Amounts, and any Loan Purchase Price Amounts received by the
Indenture Trustee relating to such Pool, (iv) on the Payment Date occurring in
January 2000, the Capitalized Interest Requirement to be transferred pursuant to
Section 8.9(e) hereof relating to Pool II, (v) the portion of the amount, if
any, to be transferred on such Payment Date from the Pre-Funding Account,
pursuant to Section 8.9(f) hereof and (vi) the amount, if any, to be transferred
on such Payment Date from the Reserve Fund pursuant to Section 8.5(b)(ii)
hereof.
(c) [Intentionally Omitted].
(d) With respect to the Collection Account, on each Payment
Date, the Indenture Trustee shall make the following allocations, disbursements
and transfers in the following order of priority, and each such allocation,
transfer and disbursement shall be treated as having occurred only after all
preceding allocations, transfers and disbursements have occurred:
(i) to the Indenture Trustee, the Indenture Trustee's Fee
then due on account of each Class of Notes;
(ii) from amounts then on deposit in the Collection
Account, (x) from amounts on deposit therein with respect to Pool
I, the Premium Amounts with respect to the Class A-1 Notes to the
Insurer for such Payment Date and (y) from amounts then on
deposit therein with respect to Pool II, the Premium Amounts with
respect to the Class A-2 Notes to the Insurer for such Payment
Date;
(iii) (x) from amounts then on deposit therein with
respect to Pool I, to the Class A-1 Noteholders, the Class A-1
Interest Payment Amount for such Payment Date and (y) from
amounts then on deposit therein with respect to Pool II, to the
Class A-2 Noteholders, the Class A-2 Interest Payment Amount for
such Payment Date;
(iv) (x) from amounts then on deposit therein with respect
to Pool I, to the Class A-1 Noteholders as a distribution of
principal, the Class A-1 Principal Payment Amount for such
Payment Date and (y) from amounts then on deposit therein with
respect to the Pool II, to the Class A-2 Noteholders, as a
distribution of principal, the Class A-2 Principal Payment Amount
for such Payment Date;
(v) (x) from amounts then on deposit therein with respect
to Pool I, to the Class A-1 Noteholders, as a distribution of
principal, the Pool I Overcollateralization Deficit for such
Payment Date and (y) from amounts then on deposit therein with
respect
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to Pool II, to the Class A-2 Noteholders, as a distribution of
principal, the Pool II Overcollateralization Deficit for such
Payment Date;
(vi) (x) from amounts then on deposit therein with respect
to Pool I, to the Insurer, the Class A-1 Reimbursement Amount, if
any, then due to it and (y) from amounts then on deposit therein
with respect to Pool II, to the Insurer, the Class A-2
Reimbursement Amount, if any, then due to it;
(vii) any portion of the Available Funds with respect to a
Pool remaining after the application described in items (i)
through (vi) above on a Payment Date shall be used to fund any
deficiency in items (iii), (v) and (vi) above with respect to the
other Pool on such Payment Date (such amount which is available
to be allocated with respect to the other Pool on such Payment
Date is a "Crossover Amount" for the related Pool);
(viii) (x) from amounts then on deposit therein with
respect to Pool I, the Excess Cashflow with respect to the Class
A-1 Notes shall be applied to the extent necessary to fund the
full amount of the Accelerated Principal Payment with respect to
the Class A-1 Notes and (y) from amounts then on deposit therein
with respect to Pool II, the Excess Cashflow with respect to the
Class A-2 Notes shall be applied to the extent necessary to fund
the full amount of the Accelerated Principal Payment with respect
to the Class A-2 Notes;
(ix) to the Reserve Fund for application pursuant to this
Indenture, to the extent that the sum of (a) the Pool I
Overcollateralization Amount plus (b) the Pool II
Overcollateralization Amount (after taking into account the
reductions in the Note Principal Balance with respect to each
Class of Notes on such Payment Date due to the application of the
amounts described in clauses (iv), (v), (vii) and (viii) above)
is less than the sum of (a) the Pool I Specified
Overcollateralization Amount and (b) the Pool II Specified
Overcollateralization Amount as of such Payment Date;
(x) from amounts then on deposit therein to the Servicer,
reimbursement for certain amounts reimbursable to the Servicer
pursuant to Section 3.03 and Section 5.03 of the Sale and
Servicing Agreement to the extent not previously reimbursed;
(xi) (x) from amounts then on deposit therein with respect
to Pool I, the current Class A-1 Deferred Interest with respect
to the Class A-1 Notes and any unpaid Class A-1 Deferred Interest
from prior Payment Dates with interest thereon at the applicable
Class A-1 Formula Note Rate and (y) from amounts then on deposit
therein with respect to Pool II, the current Class A-2 Deferred
Interest with respect to the Class A-2 Notes and any unpaid Class
A-2 Deferred Interest from prior Payment Dates with interest
thereon at the applicable Class A-2 Formula Note Rate;
(xii) to the Manager of the Trust, the Management Fee then
due;
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(xiii) to the Certificateholders, any amounts remaining on
deposit in the Collection Account or any amounts available to be
released from the Reserve Fund pursuant to Section 8.5(c) hereof.
SECTION 8.7. Statements to Noteholders. Concurrently with each
distribution to Noteholders, the Indenture Trustee shall forward to each
Noteholder, the Servicer, the Insurer and each Rating Agency a statement
prepared by the Servicer pursuant to Section 4.01 of the Sale and Servicing
Agreement with respect to such distribution setting forth:
(i) the aggregate amount of collections received on the
Mortgage Loans on or prior to the Determination Date in respect
of such Collection Period for Pool I and Pool II;
(ii) the aggregate amount of (a) Interest Collections and
(b) Principal Collections for such Collection Period and for each
Pool;
(iii) the Class A-1 Interest Rate and the Class A-2
Interest Rate for the related Interest Accrual Period;
(iv) the Principal Payment Amount, separately stating the
components thereof;
(v) the amount of any Loan Purchase Price paid by the
Sponsor pursuant to Section 2.03 or 2.05 of the Sale and
Servicing Agreement;
(vi) any accrued and unpaid Servicing Fees for previous
Collection Periods and the Servicing Fee for each Pool and for
such Collection Period;
(vii) the Pool Balance for each Pool as of the end of the
preceding Collection Period and as of the end of the second
preceding Collection Period;
(viii) the Class A-1 Note Principal Balance, the Class A-2
Note Principal Balance and related Pool Factor after giving
effect to the distribution on such Payment Date;
(ix) the aggregate amount of Additional Balances created
with respect to the HELOC Mortgage Loans during the previous
Collection Period;
(x) the number and aggregate Principal Balances of
Mortgage Loans (x) as to which the Minimum Monthly Payment is
delinquent for 30-59 days, 60-89 days and 90 or more days,
respectively and (y) for which the related Mortgaged Property has
become an REO Property, in each case as of the end of the
preceding Collection Period;
(xi) whether a Rapid Amortization Event has occurred since
the prior Determination Date, specifying each such Rapid
Amortization Event if one has occurred;
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(xii) whether an Event of Servicing Termination has
occurred since the prior Determination Date, specifying each such
Event of Servicing Termination if one has occurred;
(xiii) the Class A-1 Deficiency Amount or the Class A-2
Deficiency Amount, if any, for such Payment Date;
(xiv) the total amount of funds on deposit in the Reserve
Fund, the amount to be transferred from the Reserve Fund to the
Collection Account pursuant to Section 8.5(b) of this Indenture;
(xv) the number and Principal Balances of any Mortgage
Loans retransferred to the Sponsor pursuant to Section 2.07 of
the Sale and Servicing Agreement;
(xvi) the Servicing Fee for each Pool for such Payment
Date;
(xvii) the Overcollateralization Deficit with respect to
each Pool;
(xviii) the amount of the Accelerated Principal Payment,
if any, for each Class of Notes for the related Payment Date; and
(xix) the amount of any Pool I Overcollateralization
Reduction Amount and Pool II Overcollateralization Reduction
Amount.
In addition, the certificate delivered in January 2000 shall
also indicate (i) the amount on deposit in the Pre-Funding Account as of such
Payment Date and transfers of funds required by Section 8.9 and (ii) the
aggregate of the Principal Balances of Subsequent Mortgage Loans purchased on
the related Subsequent Transfer Date.
In the case of information furnished pursuant to clauses (iv)
and (v) above, the amounts shall be expressed as a dollar amount per Note with a
$1,000 denomination.
Within 60 days after the end of each calendar year, the
Servicer shall prepare or cause to be prepared and shall forward to the
Indenture Trustee the information set forth in clause (iii) above aggregated for
such calendar year. Such obligation of the Servicer shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Servicer or a Note Paying Agent pursuant to any requirements of
the Code.
SECTION 8.8. Rights of Securityholders. The Notes shall
represent obligations of the Trust, secured by the Trust Property, including the
Collection Account and the right to receive Interest Collections, Principal
Collections, if any, and other amounts at the times and in the amounts specified
in this Indenture; the Certificates shall represent the interest of the Trust
(other than the Reserve Fund, the Policy and the Pre-Funding Account).
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SECTION 8.9. Pre-Funding Account.
(a) The Indenture Trustee shall establish and maintain with
itself a separate trust account (the "Pre-Funding Account") entitled "Bank One,
National Association as Indenture Trustee, in trust for the registered holders
of GreenPoint Home Equity Loan Trust 1999-2, Pre-Funding Account." The
Pre-Funding Account shall be an Eligible Account.
(b) The Servicer may cause the institution maintaining the
Pre-Funding Account to invest any funds in the Pre-Funding Account in Eligible
Investments which shall mature or otherwise be available not later than the
Business Day next preceding the Payment Date or, with the approval of the
Insurer and the Rating Agencies, on the Payment Date next following the date of
such investment (except that any investment in an obligation of the institution
with which the Pre-Funding Account is maintained may mature on or before 12:00
noon, New York time, on such Payment Date) and shall not be sold or disposed of
prior to its maturity. At any time when the Indenture Trustee is maintaining the
Pre-Funding Account, any request by the Servicer to invest funds on deposit in
the Pre-Funding Account shall be in writing, shall be delivered to the Indenture
Trustee at or before 10:30 a.m., New York time, if such investment is to be made
on such day, and shall certify that the requested investment is an Eligible
Investment which matures at or prior to the time required hereby. Any such
investment shall be registered in the name of the Indenture Trustee as trustee
hereunder or in the name of its nominee, and to the extent such investments are
certificated they shall be maintained in the possession of the Indenture Trustee
in the state of its Corporate Trust Office. All income and gain realized from
any such investment shall be included as Interest Collections. The amount of any
losses incurred in respect of the principal amount of any such investment shall
be deposited in the Pre-Funding Account by the Servicer out of its own funds
immediately as realized. Any investment earnings on the Pre-Funding Account
shall be treated as owned by the Sponsor for federal and state income tax
purposes.
(c) On the Closing Date, the Indenture Trustee will deposit
into the Pre-Funding Account from the proceeds of the sale of the Notes, on
behalf of the Noteholders and the Insurer, the Original Pre-Funded Amount.
(d) On each Subsequent Transfer Date with respect to either
Pool, the Sponsor shall instruct the Indenture Trustee to withdraw from the
Pre-Funding Account an amount equal to 100% of the aggregate Principal Balances
of the Subsequent Mortgage Loans transferred to the Trust for assignment to
either Pool I or Pool II (as indicated by the Sponsor) on such Subsequent
Transfer Date and pay such amount to or upon the order of the Sponsor upon
satisfaction of the conditions set forth in Section 2.10 of the Sale and
Servicing Agreement with respect to such transfer; provided, however, that with
respect to Pool I neither (x) the aggregate amount withdrawn from the
Pre-Funding Account to purchase Subsequent Mortgage Loans for addition to Pool I
nor (y) the aggregate Principal Balances of the Subsequent Mortgage Loans
transferred to the Trust for assignment to Pool I may exceed the Original Class
A-1 Pre-Funded Amount; provided further, however, that with respect to Pool II
neither (x) the aggregate amount withdrawn from the Pre-Funding Account to
purchase Subsequent Mortgage Loans for addition to Pool II nor (y) the aggregate
Principal Balances of the Subsequent Mortgage Loans transferred to the Trust for
assignment to Pool II may exceed the Original Class A-2 Pre-Funded Amount.
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(e) On January 10, 2000, the Servicer shall remit to the
Collection Account the Capitalized Interest Requirement, as set forth in the
Side Letter Agreement, to be used for the Payment Date in January 2000.
(f) If (x) the Pre-Funded Amount has not been reduced to zero
by the Payment Date occurring in January 2000 or (y) the Pre-Funded Amount has
been reduced to $100,000 or less on any Payment Date occurring during the
Pre-Funding Period, in either case after giving effect to any reductions in the
Pre-Funded Amount on or before the related such Payment Date, the Sponsor shall
instruct the Indenture Trustee to withdraw from the Pre-Funding Account and
deposit to the Collection Account the difference, if any, between (A) the
Original Pre-Funded Amount and (B) all amounts theretofore withdrawn from the
Pre-Funding Account with respect to Subsequent Mortgage Loans.
SECTION 8.10. Opinion of Counsel. The Indenture Trustee and
the Insurer shall receive at least seven days' notice when requested by the
Issuer to take any action pursuant to Section 8.2(a), accompanied by copies of
any instruments involved, and the Indenture Trustee shall also require as a
condition to such action, an Opinion of Counsel, stating the legal effect of any
such action, outlining the steps required to complete the same, and concluding
that all conditions precedent to the taking of such action have been complied
with and such action will not materially and adversely impair the security for
the Notes or the rights of the Noteholders or the Insurer in contravention of
the provisions of this Indenture; provided, however, that such Opinion of
Counsel shall not be required to express an opinion as to the fair value of the
Trust Property. Counsel rendering any such opinion may rely, without independent
investigation, on the accuracy and validity of any certificate or other
instrument delivered to the Indenture Trustee in connection with any such
action.
ARTICLE IX
Supplemental Indentures
SECTION 9.1. Supplemental Indentures Without Consent of
Noteholders.
(a) Without the consent of the Holders of any Notes but with
the consent of the Insurer, as evidenced to the Indenture Trustee, the Issuer
and the Indenture Trustee, when authorized by an Issuer Order, at any time and
from time to time, may enter into one or more indentures supplemental hereto
(which shall conform to the provisions of the Trust Indenture Act as in force at
the date of the execution thereof), in form satisfactory to the Indenture
Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to
assure, convey and confirm unto the Indenture Trustee any
property subject or required to be subjected to the lien of this
Indenture, or to subject to the lien of this Indenture additional
property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to the Issuer,
and the assumption by any such successor of the covenants of the
Issuer herein and in the Notes contained;
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(iii) to add to the covenants of the Issuer, for the
benefit of the Holders of the Notes, or to surrender any right or
power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any
supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture or
in any supplemental indenture; provided that such action shall
not adversely affect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the
Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration
of the trusts hereunder by more than one trustee, pursuant to the
requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of
this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any
similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by
the TIA.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by
an Issuer Order, may, also without the consent of any of the Holders of the
Notes but with the prior written consent of the Insurer and with prior notice to
the Rating Agencies by the Issuer, as evidenced to the Indenture Trustee, enter
into an indenture or indentures supplemental hereto for the purpose of adding
any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided, however, that such action
shall not, as evidenced by an Opinion of Counsel, adversely affect in any
material respect the interests of any Noteholder.
SECTION 9.2. Supplemental Indentures with Consent of
Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, also may, with prior notice to the Rating Agencies, with the consent of
the Insurer and with the consent of the Holders of not less than a majority of
the Outstanding Amount of the Notes, by Act of such Holders delivered to the
Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided, however, that, subject to the express rights of the Insurer
under the Basic Documents, no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
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(i) change the date of payment of any installment of
principal of or interest on any Note, or reduce the principal
amount thereof, the interest rate thereon or the Redemption Price
with respect thereto, change the provision of this Indenture
relating to the application of collections on, or the proceeds of
the sale of, the Trust Property to payment of principal of or
interest on the Notes, or change any place of payment where, or
the coin or currency in which, any Note or the interest thereon
is payable;
(ii) impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article
V, to the payment of any such amount due on the Notes on or after
the respective due dates thereof (or, in the case of redemption,
on or after the Redemption Date);
(iii) reduce the percentage of the Outstanding Amount of
the Notes, the consent of the Holders of which is required for
any such supplemental indenture, or the consent of the Holders of
which is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and
their consequences provided for in this Indenture;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) reduce the percentage of the Outstanding Amount of the
Notes required to direct the Indenture Trustee to direct the
Issuer to sell or liquidate the Trust Property pursuant to
Section 5.4;
(vi) modify any provision of this Section except to
increase any percentage specified herein or to provide that
certain additional provisions of this Indenture or the Basic
Documents cannot be modified or waived without the consent of the
Holder of each Outstanding Note affected thereby;
(vii) modify any of the provisions of this Indenture in
such manner as to affect the calculation of the amount of any
payment of interest or principal due on any Note on any Payment
Date (including the calculation of any of the individual
components of such calculation); or
(viii) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any
part of the Trust Property or, except as otherwise permitted or
contemplated herein or in any of the Basic Documents, terminate
the lien of this Indenture on any property at any time subject
hereto or deprive the Holder of any Note of the security provided
by the lien of this Indenture.
The Indenture Trustee may determine whether or not any
Notes would be adversely affected by any supplemental indenture upon receipt of
an Opinion of Counsel to that effect and any such determination shall be
conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The Indenture Trustee shall not be liable
for any such determination made in good faith.
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It shall not be necessary for any Act of Noteholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such Act shall approve the substance
thereof.
Promptly after the execution by the Issuer and the Indenture
Trustee of any supplemental indenture pursuant to this Section, the Indenture
Trustee shall mail to the Holders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In
executing, or permitting the additional trusts created by, any supplemental
indenture permitted by this Article IX or the modifications thereby of the
trusts created by this Indenture, the Indenture Trustee shall be entitled to
receive, and subject to Sections 6.1 and 6.2, shall be fully protected in
relying upon, an Opinion of Counsel (and, if requested, an Officer's
Certificate) stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Indenture Trustee may, but shall
not be obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the
execution of any supplemental indenture pursuant to the provisions hereof, this
Indenture shall be and be deemed to be modified and amended in accordance
therewith with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Holders of the Notes
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. Conformity With Trust Indenture Act. Every
amendment of this Indenture and every supplemental indenture executed pursuant
to this Article IX shall conform to the requirements of the Trust Indenture Act
as then in effect so long as this Indenture shall then be qualified under the
Trust Indenture Act.
SECTION 9.6. Reference in Notes to Supplemental Indentures.
Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and if required by the Indenture
Trustee shall, bear a notation in form approved by the Indenture Trustee as to
any matter provided for in such supplemental indenture. If the Issuer or the
Indenture Trustee shall so determine, new Notes so modified as to conform, in
the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
Redemption of Notes
SECTION 10.1. Redemption. The Notes are subject to redemption
in whole, but not in part, at the direction of the Sponsor pursuant to Section
7.01(b) of the Sale and Servicing Agreement, on any Payment Date on which the
Sponsor exercises its option to purchase the Trust Property pursuant to said
Section 7.01(b), for a purchase price equal to the Redemption Price. The
Servicer or the Issuer shall furnish the Insurer notice of such redemption. If
the Notes are to be redeemed pursuant to this Section 10.1, the Servicer or the
Issuer shall furnish notice of such election to the Indenture Trustee not later
than 35 days prior to the Redemption Date and the Issuer shall deposit with the
Indenture Trustee in the Collection Account the Redemption Price of the Notes
not less than five Business Days prior to the Redemption Date whereupon all such
Notes shall be due and payable on the Redemption Date upon the furnishing of a
notice complying with Section 10.2.
SECTION 10.2. Surrender of Notes.
(a) Notice of any termination, specifying the Payment Date
(which shall be a date that would otherwise be a Payment Date) upon which the
Noteholders may surrender their Notes to the Indenture Trustee for payment of
the final distribution and cancellation, shall be given promptly by the
Indenture Trustee (upon receipt of written directions from the Sponsor, if the
Sponsor is exercising its right to transfer of the Mortgage Loans, given not
later than the first day of the month preceding the month of such final
distribution) to the Insurer and to the Servicer and by letter to Noteholders
mailed not earlier than the 15th day and not later than the 25th day of the
month next preceding the month of such final distribution specifying (i) the
Payment Date upon which final distribution of the Notes will be made upon
presentation and surrender of Notes at the office or agency of the Indenture
Trustee therein designated, (ii) the amount of any such final distribution and
(iii) that the Record Date otherwise applicable to such Payment Date is not
applicable, distributions being made only upon presentation and surrender of the
Notes at the office or agency of the Indenture Trustee therein specified. In the
event written directions are delivered by the Sponsor to the Indenture Trustee
as described in the preceding sentence, the Sponsor shall deposit in the
Collection Account on or before the Payment Date for such final distribution in
immediately available funds an amount which, when added to the funds on deposit
in the Collection Account that are payable to the Noteholders, will be equal to
the retransfer amount for the Mortgage Loans computed as above provided,
together with all amounts due and owing to the Insurer for unpaid premiums and
unreimbursed draws on the Policy and all other amounts due and owing to the
Insurer pursuant to the Insurance Agreement, together with interest thereon as
provided under the Insurance Agreement.
(b) Upon presentation and surrender of the Notes, the
Indenture Trustee shall cause to be distributed to the Holders of Notes on the
Payment Date for such final distribution, in proportion to the Percentage
Interests of their respective Notes and to the extent that funds are available
for such purpose, an amount equal to (i) if such final distribution is not being
made pursuant to the transfer to the Sponsor pursuant to Section 7.01(a)(B)(i)
of the Sale and Servicing Agreement, the amount required to be distributed to
Noteholders pursuant to Section 5.01 of the Sale and Servicing Agreement for
such Payment Date and (ii) if such final distribution is being
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made pursuant to such retransfer, the amount specified in Section 7.01(a)(B)(i)
of the Sale Servicing Agreement. The distribution on such final Payment Date
pursuant to a retransfer pursuant to Section 7.01(a)(B)(i) of the Sale and
Servicing Agreement shall be in lieu of the distribution otherwise required to
be made on such Payment Date in respect of the Notes. On the final Payment Date
prior to having made the distributions called for above, the Indenture Trustee
shall, based upon the information set forth in the Servicing Certificate for
such Payment Date, withdraw from the Collection Account and remit to the Insurer
the lesser of (x) the amount available for distribution on such final Payment
Date, net of any portion thereof necessary to pay the amounts described in
clauses (i) and (ii) above and (y) the unpaid amounts due and owing to the
Insurer for unpaid premiums and unreimbursed draws on the Policy and all other
amounts due and owing to the Insurer pursuant to the Insurance Agreement,
together with interest thereon as provided under the Insurance Agreement.
(c) In the event that all of the Noteholders shall not
surrender their Notes for final payment and cancellation on or before such final
Payment Date, the Indenture Trustee shall on such date cause all funds in the
Collection Account not distributed in final distribution to Noteholders to be
withdrawn therefrom and credited to the remaining Noteholders by depositing such
funds in a separate escrow account for the benefit of such Noteholders and the
Sponsor (if the Sponsor has exercised its right to transfer the Mortgage Loans)
or the Indenture Trustee (in any other case) and shall give a second written
notice to the remaining Noteholders to surrender their Notes for cancellation
and receive the final distribution with respect thereto. If within one year
after the second notice all the Notes shall not have been surrendered for
cancellation, the Indenture Trustee may take appropriate steps, or may appoint
an agent to take appropriate steps, to contact the remaining Noteholders
concerning surrender of their Notes, and the cost thereof shall be paid out of
the funds on deposit in such escrow account.
SECTION 10.3. Form of Redemption Notice. Notice of redemption
supplied to the Indenture Trustee by the Sponsor under Section 10.1 shall be
given by the Indenture Trustee by facsimile or by first-class mail, postage
prepaid, transmitted or mailed prior to the applicable Redemption Date to each
Holder of Notes of record, as of the close of business on the date which is not
less than 5 days prior to the applicable Redemption Date, at such Holder's
address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to such
Redemption Date is not applicable and that payments shall be made
only upon presentation and surrender of such Notes at the place
where such Notes are to be surrendered for payment of the
Redemption Price (which shall be the office or agency of the
Issuer to be maintained as provided in Section 3.2); and
(iv) that interest on the Notes shall cease to accrue on
the Redemption Date.
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Notice of redemption of the Notes shall be given by the
Indenture Trustee in the name and at the expense of the Issuer. Failure to give
notice of redemption, or any defect therein, to any Holder of any Note shall not
impair or affect the validity of the redemption of any other Note.
SECTION 10.4. Notes Payable on Redemption Date. The Notes to
be redeemed shall, following notice of redemption as required by Section 10.2,
on the Redemption Date become due and payable at the Redemption Price and
(unless the Issuer shall default in the payment of the Redemption Price) no
interest shall accrue on the Redemption Price for any period after the date to
which accrued interest is calculated for purposes of calculating the Redemption
Price.
ARTICLE XI
Miscellaneous
SECTION 11.1. Compliance Certificates and Opinions, etc. Upon
any application or request by the Issuer to the Indenture Trustee to take any
action under any provision of this Indenture, the Issuer shall furnish to the
Indenture Trustee and to the Insurer if the application or request is made to
the Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section, except that, in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or
condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable such signatory to express
an informed opinion as to whether or not such covenant or
condition has been complied with; and
(iv) a statement as to whether, in the opinion of each
such signatory such condition or covenant has been complied with.
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SECTION 11.2. Form of Documents Delivered to Indenture
Trustee. In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the
Issuer may be based, insofar as it relates to legal matters, upon a certificate
or opinion of, or representations by, counsel, unless such officer knows, or in
the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his or her certificate or
opinion is based are erroneous. Any such certificate of an Authorized Officer or
Opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an officer or officers of
the Servicer, the Sponsor or the Issuer, stating that the information with
respect to such factual matters is in the possession of the Servicer, the
Sponsor or the Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
Whenever in this Indenture, in connection with any application
or certificate or report to the Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
or to the sufficiency of such certificate or report. The foregoing shall not,
however, be construed to affect the Indenture Trustee's right to conclusively
rely upon the truth and accuracy of any statement or opinion contained in any
such document as provided in Article VI.
SECTION 11.3. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Noteholders in person or by agents
duly appointed in writing; and except as herein otherwise expressly provided
such action shall become effective when such instrument or instruments are
delivered to the Indenture Trustee, and, where it is hereby expressly required,
to the Issuer. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Noteholders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be
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sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of the Indenture Trustee and the Issuer, if made in the
manner provided in this Section.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any customary manner of the
Indenture Trustee.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
of every Note issued upon the registration thereof or in exchange therefor or in
lieu thereof, in respect of anything done, omitted or suffered to be done by the
Indenture Trustee or the Issuer in reliance thereon, whether or not notation of
such action is made upon such Note.
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer,
Insurer and Rating Agencies. Any request, demand, authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or
permitted by this Indenture to be made upon, given or furnished to or filed
with:
(a) The Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if personally delivered,
delivered by overnight courier or mailed first-class and shall be deemed to have
been duly given upon receipt to the Indenture Trustee at its Corporate Trust
Office and any notice delivered by facsimile shall be addressed to the Corporate
Trust Office, telecopy number (312) 407-1708, or
(b) The Issuer by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if personally delivered,
delivered by facsimile or overnight courier or mailed first class, and shall
deemed to have been duly given upon receipt to the Issuer addressed to:
GreenPoint Home Equity Loan Trust 1999-2, in care of Wilmington Trust Company,
Rodney Square North, 1100 North Market Street, Wilmington, DE 19890-0001
Attention: Corporate Trust Administration, or at any other address previously
furnished in writing to the Indenture Trustee by Issuer. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
Indenture Trustee.
(c) The Insurer by the Issuer or the Indenture Trustee shall
be sufficient for any purpose hereunder if in writing and mailed by first-class
mail personally delivered or telecopied to the recipient as follows:
To the Insurer: Ambac Assurance Corporation
One State Street Plaza
New York, NY 10004
Telecopy: (212) 363-1459
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, delivered by overnight courier or first class or via
facsimile to (i) in the case of Moody's, at the following address: Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10004, Fax No:
(212) 533-0355 and (ii) in the case of S&P, at the following address: Standard &
Poor's Ratings
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Services, a division of The McGraw-Hill Companies, Inc., 55 Water
Street, New York, New York 10041, Attention: Asset Backed Surveillance
Department, Fax No: (212) 438-2661; or as to each of the foregoing, at such
other address as shall be designated by written notice to the other parties.
SECTION 11.5. Notices to Noteholders; Waiver. Where this
Indenture provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event (and in all cases, the Insurer shall receive notice), at his address as it
appears on the Note Register, not later than the latest date, and not earlier
than the earliest date, prescribed for the giving of such notice. In any case
where notice to Noteholders is given by mail, neither the failure to mail such
notice nor any defect in any notice so mailed to any particular Noteholder shall
affect the sufficiency of such notice with respect to other Noteholders, and any
notice that is mailed in the manner herein provided shall conclusively be
presumed to have been duly given.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by any Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service
as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Indenture Trustee
shall be deemed to be a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating
Agencies, failure to give such notice shall not affect any other rights or
obligations created hereunder.
SECTION 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Holder of a Note
providing for a method of payment, or notice by the Indenture Trustee or any
Note Paying Agent to such Holder, that is different from the methods provided
for in this Indenture for such payments or notices, provided that such methods
are reasonable and consented to by the Indenture Trustee (which consent shall
not be unreasonably withheld). The Issuer will furnish to the Indenture Trustee
a copy of each such agreement and the Indenture Trustee will cause payments to
be made and notices to be given in accordance with such agreements.
SECTION 11.7. Conflict with Trust Indenture Act. If any
provision hereof limits, qualifies or conflicts with another provision hereof
that is required to be included in this indenture by any of the provisions of
the Trust Indenture Act, such required provision shall control.
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The provisions of TIA Sections 310 through 317 that impose
duties on any person (including the provisions automatically deemed included
herein unless expressly excluded by this Indenture) are a part of and govern
this Indenture, whether or not physically contained herein.
SECTION 11.8. Effect of Headings and Table of Contents. The
Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 11.9. Successors and Assigns. All covenants and
agreements in this Indenture and the Notes by the Issuer shall bind its
successors and assigns, whether so expressed or not. All agreements of the
Indenture Trustee in this Indenture shall bind its successors.
SECTION 11.10. Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the
validity, legality, and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 11.11. Benefits of Indenture. The Insurer and its
successors and assigns shall be a third-party beneficiary to the provisions of
this Indenture, and shall be entitled to rely upon and directly to enforce such
provisions of this Indenture. Nothing in this Indenture or in the Notes, express
or implied, shall give to any Person, other than the parties hereto and their
successors hereunder, the Insurer and the Noteholders, and any other party
secured hereunder, and any other person with an ownership interest in any part
of the Trust Property, any benefit or any legal or equitable right, remedy or
claim under this Indenture. The Insurer may disclaim any of its rights and
powers under this Indenture (in which case the Indenture Trustee may exercise
such right or power hereunder), but not its duties and obligations under the
Policy, upon delivery of a written notice to the Indenture Trustee.
SECTION 11.12. Legal Holidays. In any case where the date on
which any payment is due shall not be a Business Day, then (notwithstanding any
other provision of the Notes or this Indenture) payment need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. GOVERNING LAW. THIS INDENTURE SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS.
SECTION 11.14. Counterparts. This Indenture may be executed in
any number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is
subject to recording in any appropriate public recording offices, such recording
is to be effected by the Issuer and at its expense accompanied by an Opinion of
Counsel (which may be counsel to the Trust or any other counsel reasonably
acceptable to the Indenture Trustee and the Insurer) to the
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effect that such recording is necessary either for the protection of the
Noteholders or any other person secured hereunder or for the enforcement of any
right or remedy granted to the Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken,
directly or indirectly, with respect to the obligations of the Issuer, the
Sponsor, the Servicer, the Owner Trustee or the Indenture Trustee on the Notes
or under this Indenture or any certificate or other writing delivered in
connection herewith or therewith, against (i) the Sponsor, the Servicer, the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Sponsor, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
any holder of a beneficial interest in the Issuer, the Sponsor, the Servicer,
the Owner Trustee or the Indenture Trustee or of any successor or assign of the
Sponsor, the Servicer, the Indenture Trustee or the Owner Trustee in its
individual capacity, except as any such Person may have expressly agreed (it
being understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity. For all purposes of this
Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits
of, the terms and provisions of Articles VI, VII and VIII of the Trust
Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering
into this Indenture, and each Noteholder, by accepting a Note, hereby covenant
and agree that they will not at any time institute against the Sponsor, or the
Issuer, or join in any institution against the Sponsor, or the Issuer of, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings,
or other proceedings under any United States Federal or state bankruptcy or
similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents.
SECTION 11.18. Inspection. The Issuer agrees that, on
reasonable prior notice, it will permit any representative of the Indenture
Trustee or of the Insurer, during the Issuer's normal business hours, to examine
all the books of account, records, reports, and other papers of the Issuer, to
make copies and extracts therefrom, to cause such books to be audited by
independent certified public accountants, and to discuss the Issuer's affairs,
finances and accounts with the Issuer's officers, employees, and independent
certified public accountants, all at such reasonable times and as often as may
be reasonably requested. The Indenture Trustee shall and shall cause its
representatives to hold in confidence all such information except to the extent
disclosure may be required by law (and all reasonable applications for
confidential treatment are unavailing) and except to the extent that the
Indenture Trustee may reasonably determine that such disclosure is consistent
with its Obligations hereunder.
SECTION 11.19. Limitation of Liability. It is expressly
understood and agreed by the parties hereto that (a) this Indenture is executed
and delivered by Wilmington Trust Company, not individually or personally but
solely as Owner Trustee of the Issuer under the Trust Agreement, in the exercise
of the powers and authority conferred and vested in it, (b) each of the
representations, undertakings and agreements herein made on the part of the
Issuer is made
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and intended not as personal representations, undertakings and agreements by
Wilmington Trust Company but is made and intended for the purpose for binding
only the Issuer, (c) nothing herein contained shall be construed as creating any
liability on Wilmington Trust Company individually or personally, to perform any
covenant either expressed or implied contained herein, all such liability, if
any, being expressly waived by the parties to this Indenture and by any person
claiming by, through or under them and (d) under no circumstances shall
Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of the Issuer or be liable for the breach or failure of
any obligation, representation, warranty or covenant made or undertaking by the
Issuer under this Indenture or any related documents.
ARTICLE XII
Rapid Amortization Events
SECTION 12.1. Rapid Amortization Events. The following shall
constitute Rapid Amortization Events with respect to each Class of Notes:
(a) failure on the part of the Issuer, the Sponsor, the
Servicer or the Company, as the case may be, (i) to make any payment or deposit
required by the terms of this Indenture, the Sale and Servicing Agreement or the
Insurance Agreement, within two Business Days after notification that such
payment or deposit is required to be made, or (ii) to observe or perform in any
material respect the covenants or agreements of the Issuer, the Sponsor, the
Company or the Servicer, as the case may be, set forth in the Sale and Servicing
Agreement or the Insurance Agreement or this Indenture, as the case may be,
which failure, in each case, materially and adversely affects the interests of
the Noteholders or the Insurer and which, in the case of clause (ii), continues
unremedied and continues to affect materially and adversely the interests of the
Noteholders or the Insurer for a period of 60 days after the date on which
written notice of such failure, requiring the same to be remedied, shall have
been given to the Issuer, the Sponsor, the Servicer or the Company, as the case
may be, by the Indenture Trustee, or to the Issuer, the Sponsor, the Servicer or
the Company, as the case may be, and the Indenture Trustee by the Insurer or
Holders of Notes evidencing more than 50% of the Outstanding Amount;
(b) any representation or warranty made by the Issuer, the
Sponsor, the Servicer or the Company, as the case may be, in this Indenture, the
Sale and Servicing Agreement or the Insurance Agreement shall prove to have been
incorrect in any material respect when made, as a result of which the interests
of the Noteholders or the Insurer are materially and adversely affected and
which continues to be incorrect in any material respect and continues to affect
materially and adversely the interests of the Noteholders or the Insurer for a
period of 60 days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the Issuer, the
Sponsor, the Servicer or the Company, as the case may be, by the Indenture
Trustee, or to the Issuer, the Sponsor, the Servicer or the Company, as the case
may be, and the Indenture Trustee by either the Insurer or the Holders of Notes
evidencing more than 50% of the Outstanding Amount; provided, however, that with
respect to any such representation or warranty made with respect to the related
Mortgage Loans, a Rapid Amortization Event pursuant to this subparagraph (b)
shall not be deemed to have occurred hereunder if the Servicer or the Sponsor
has accepted retransfer of such related Mortgage Loan or related Mortgage Loans
during such period (or such longer period not to exceed an additional
53
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60 days as the Indenture Trustee may specify with the consent of the Insurer) in
accordance with the provisions hereof;
(c) the Company, the Sponsor or the Issuer or any of their
Subsidiaries or Affiliates shall voluntarily go into liquidation, consent to the
appointment of a conservator or receiver or liquidator or similar person in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings of or relating to the Company, the Sponsor, or the Trust or
of or relating to all or substantially all of such Person's property, or a
decree or order of a court or agency or supervisory authority having
jurisdiction in the premises for the appointment of a conservator, receiver,
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Company, the Sponsor of the Trust and such decree or order shall have remained
in force undischarged or unstayed for a period of 30 days; or the Company, the
Sponsor or the Trust shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors or voluntarily suspend payment of its obligations;
(d) the Issuer becomes subject to regulation by the Securities
and Exchange Commission as an investment company within the meaning of the
Investment Company Act of 1940, as amended;
(e) as of a given date, the aggregate of all draws under the
Policy related to either Class exceeds 1% of the related Pool Balance as of the
Initial Cut-Off Date; and
(f) default in the payment of any interest, principal or any
installment of principal on the related Class of Class A Notes when the same
becomes due and payable, and such default continues for a period of five
Business Days.
The occurrence of a Rapid Amortization Event with respect to a
Class of Notes will not cause the occurrence of a Rapid Amortization Event with
respect to the other Class of Notes unless the same event or circumstance is a
Rapid Amortization Event with respect to both Classes.
In the case of any event described above in clauses (a)
through (e) above, a Rapid Amortization Event with respect to a Class of Notes
will be deemed to have occurred only if, after the applicable grace period, if
any, described herein or in the Indenture or the Sale and Servicing Agreement
either (i) the Indenture Trustee or Holders holding Notes evidencing more than
50% of the Outstanding Amount of such Class of Notes, with the prior written
consent of the Insurer (so long as there is no continuing default by the Insurer
in the performance of its obligations under the Policy) or (ii) the Insurer (so
long as there is no continuing default by the Insurer in the performance of its
obligations under the Policy), by written notice to the Issuer, the Insurer, the
Sponsor, and the Servicer (and to the Indenture Trustee, if given by the Holders
or the Insurer) declare that a Rapid Amortization Event has occurred with
respect to such Class as of the date of such notice, or in the case of any event
described in clause (f), the Indenture Trustee or Holders holding Notes
evidencing more than 50% of the Outstanding Amount of such Class of Notes by
such written notice declare that a Rapid Amortization Event has occurred with
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respect to such Class as of the date of such notice. Following the occurrence of
a Rapid Amortization Event described in clauses (a) through (e) the Insurer (so
long as there is no continuing default by the Insurer in the performance of its
obligations under the Policy) shall have the right to direct the Indenture
Trustee to sell the related Pool of Mortgage Loans. Following the occurrence of
a Rapid Amortization Event described in clause (f), the Holders holding Notes
evidencing more than 50% of the Outstanding Amount of such Class of Notes shall
have the right to so direct the Indenture Trustee. If the Insurer has directed
such sale, the Policy will cover any amounts by which such remaining net
proceeds are insufficient to pay the related Note Principal Balance of such
Class of Notes, together with all accrued and unpaid interest thereon.
In addition to the consequences of a Rapid Amortization Event
discussed above, if the Sponsor voluntarily files a bankruptcy petition or goes
into liquidation or any person is appointed a receiver or bankruptcy trustee of
the Sponsor, on the day of any such filing or appointment no further Additional
Balances will be transferred to the Trust, and the Sponsor will promptly give
notice to the Indenture Trustee and the Insurer of any such filing or
appointment. Within 15 days, the Indenture Trustee will publish a notice of the
occurrence of such event. If so directed by the Insurer, so long as no Insurer
Default shall have occurred and be continuing, the Indenture Trustee will sell,
dispose of or otherwise liquidate the Trust Property with respect to the
Mortgage Loans in each Pool in a commercially reasonable manner and on
commercially reasonable terms. So long as no Event of Servicing Termination has
occurred and is continuing, any such sale, disposal or liquidation and such
sale, disposal or liquidation will be "servicing retained" by the Servicer. With
respect to each Pool and the related Class of Notes, the net proceeds of such
sale will first be paid to the Insurer to the extent of unreimbursed draws under
the Policy related to such Class of Notes and other amounts owing to the Insurer
(but only if an Insurer Default shall not have occurred and be continuing). The
remainder of such net proceeds will then be distributed to the Holders of the
such Class of Notes insofar as may be necessary to reduce the Note Principal
Balance of such Class, together with all accrued and unpaid interest due
thereon, to zero. If the Insurer has directed the Indenture Trustee to undertake
such sale or liquidation, the Policy will cover any amount by which such
remaining net proceeds are insufficient to pay the related Note Principal
Balance, together with all accrued and unpaid interest due thereon, in full.
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IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers, hereunto
duly authorized, all as of the day and year first above written.
GREENPOINT HOME EQUITY LOAN TRUST 1999-2
By: WILMINGTON TRUST COMPANY, not in its
individual capacity but solely as Owner Trustee
By: /s/ W. Chris Sponenberg
----------------------------------------------
Name: W. Chris Sponenberg
Title: Assistant Vice President
BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as Indenture Trustee
By: /s/ R. Tarnas
-----------------------------------------------
Name: R. Tarnas
Title: Vice President
Acknowledged and Agreed:
GREENPOINT MORTGAGE SECURITIES INC.
By: /s/ Kristen Decker
------------------------------------
Name: Kristen Decker
Title: Vice President
<PAGE>
ANNEX A - DEFINED TERMS
Accelerated Principal Payment: With respect to any Payment
Date and each Pool, a payment received as a payment of principal by the
Noteholders of the related Class of Notes, for the purpose of increasing the
related Overcollateralization Amount to the related Specified
Overcollateralization Amount applicable to such Payment Date, and to be paid
from the Excess Cashflow with respect to the related Pool, and equal to the
lesser of (x) the amount of such Excess Cashflow and (y) the
Overcollateralization Deficiency Amount for the related Pool.
Account: The Collection Account, the Pre-Funding Account and
the Reserve Fund.
Act: As defined in Section 11.3(a) of the Indenture.
Additional Balance: As to the HELOC Mortgage Loans contained
in each Pool and any date of determination, the aggregate amount of all Draws
conveyed to the Issuer with respect to such Pool pursuant to Section 2.01 of the
Sale and Servicing Agreement.
Affiliate: With respect to any specified Person, any other
Person controlling, controlled by or under common control with such Person. For
the purposes of this definition, "control" means the power to direct the
management and policies of a Person, directly or indirectly, whether through
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
Appraised Value: As to any Mortgaged Property, the value
established by either a full appraisal or a drive by inspection of such
Mortgaged Property made to establish compliance with the underwriting criteria
then in effect in connection with the application for the Mortgage Loans secured
by such Mortgaged Property.
Assignment of Mortgage: With respect to any Mortgage, an
assignment, notice of transfer or equivalent instrument, in recordable form,
sufficient under the laws of the jurisdiction in which the related Mortgaged
Property is located to reflect the sale of the Mortgage to the Indenture
Trustee, which assignment, notice of transfer or equivalent instrument may be in
the form of one or more blanket assignments covering the Mortgage Loans secured
by Mortgaged Properties located in the same jurisdiction.
Authorized Newspaper: A newspaper of general circulation in
the Borough of Manhattan, The City of New York, printed in the English language
and customarily published on each Business Day, whether or not published on
Saturdays, Sundays and holidays.
Authorized Officer: With respect to the Issuer and the
Servicer, any officer or agent acting pursuant to a power of attorney of the
Owner Trustee or the Servicer, respectively, who is authorized to act for the
Owner Trustee or the Servicer, respectively, in matters relating to the Issuer
and the Servicer, respectively, and who is identified on the list of Authorized
Officers delivered by each of the Owner Trustee and the Servicer, respectively,
to the Indenture Trustee on the Closing Date (as such lists may be modified or
supplemented from time to time thereafter).
Annex A-1
<PAGE>
Available Funds: The Pool I Available Funds or the Pool II
Available Funds.
Basic Documents: The Indenture, the Notes, the Certificates,
the Certificate of Trust, the Trust Agreement, the Sale and Servicing Agreement,
the Purchase Agreement, the Indemnification Agreement, the
Management Agreement and the Insurance Agreement.
BIF: The Bank Insurance Fund, as from time to time
constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989, or if at any time after the execution of this
instrument the Bank Insurance Fund is not existing and performing duties now
assigned to it, the body performing such duties on such date.
Billing Cycle: With respect to any Mortgage Loan and
Collection Period, the billing period specified in the related Loan Agreement
and with respect to which amounts billed are received during such Collection
Period.
Book Entry Notes: A beneficial interest in the Notes,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 2.9 of the Indenture.
Business Day: Any day other than a Saturday, Sunday, legal
holiday or other day on which banking institutions in the state of New York or
the state in which the Corporate Trust Office is located are required or
authorized by law to be closed.
Capitalized Interest Requirement: As set forth in the Side
Letter Agreement.
Certificate of Trust: The certificate of trust of the Issuer
substantially in the form of Exhibit B to the Trust Agreement.
Certificateholders: The holders of the Certificates.
Certificates: As defined in the Trust Agreement.
Class: Each respective class of Notes.
Class A-1 Deferred Interest: With respect to any Payment Date,
the excess, if any, of interest due at the Class A-1 Formula Note Rate over
interest due at the Class A-1 Note Rate.
Class A-1 Deficiency Amount: The related "Deficiency Amount"
as defined in the Policy.
Class A-1 Formula Note Rate: For any Interest Accrual Period,
the lesser of (i)(x) with respect to any Payment Date which occurs on or prior
to the Class A-1 Optional Redemption Date for the Class A-1 Notes, LIBOR plus
0.30% per annum and (y) for any Payment Date thereafter, LIBOR plus 0.60% per
annum and (ii) 15.50%.
Class A-1 Interest Payment Amount: With respect to any Payment
Date, the product of (x) one-twelfth of the Class A-1 Note Rate applicable to
such Payment Date and (y)
Annex A-2
<PAGE>
the Class A-1 Note Principal Balance immediately prior to such Payment Date
(based on a 360-day year and the actual number of days in the Interest Accrual
Period).
Class A-1 Maximum Rate: As to any Interest Period, the
Weighted Average Net Loan Rate on the Pool I Mortgage Loans for the Collection
Period during which such Interest Period begins (adjusted to an effective rate
reflecting accrued interest calculated on the basis of the actual number of days
in the Collection Period commencing in the month in which such Interest Period
commences and a year assumed to consist of 360 days).
Class A-1 Maximum Principal Payment: With respect to any
Payment Date during the Managed Amortization Period, the Pool I Net Principal
Collections and (ii) with respect to any Payment Date during the Rapid
Amortization Period, 100% of the Pool I Principal Collections relating to such
Payment Date.
Class A-1 Note: Any Note designated as the "Class A-1 Asset
Backed Note" on the face thereof in substantially the form of Exhibit A hereto.
Class A-1 Note Principal Balance: As of any time of
determination, the Original Class A-1 Note Principal Balance of the Class A-1
Notes, less any amounts actually distributed therefore as principal thereon to
the Class A-1 Notes on all prior Payment Dates.
Class A-1 Note Rate: For any Interest Accrual Period, the
lesser of the Class A-1 Formula Note Rate and the Class A-1 Maximum Rate.
Class A-1 Noteholder: Any Holder of a Class A-1 Note.
Class A-1 Optional Redemption Date: The date on which the
Sponsor or the Insurer, as applicable, is first able to exercise its right of
optional redemption of the Class A-1 Notes pursuant to Section 10.1 of the
Indenture.
Class A-1 Principal Payment Amount: On any Payment Date, the
excess of (x) the Class A-1 Maximum Principal Payment over (y) the Pool I
Overcollateralization Reduction Amount; provided, however, that for the Payment
Date which occurs in January 2000, the Class A-1 Principal Payment Amount shall
equal the excess of (x) the sum of (i) the Class A-1 Maximum Principal Payment
and (ii) the difference between the Original Class A-1 Pre-Funded Amount and the
aggregate Cut-Off Date Principal Balance of all Subsequent Mortgage Loans
transferred to Pool I as of such Payment Date over (y) the Pool I
Overcollateralization Reduction Amount.
Class A-1 Reimbursement Amount: As of any Payment Date, the
sum of (x)(i) all related payments made pursuant to the Policy by the Insurer
and in each case not previously repaid to the Insurer pursuant to Section
8.6(d)(vi) of the Indenture, plus (ii) interest accrued on each such payment
made pursuant to the Policy not previously repaid calculated at the Late Payment
Rate (as defined in the Policy) from the date the Insurer made the related
payment and (y)(i) any other amounts then due and owing to the Insurer under the
Insurance Agreement, plus (ii) interest on such amounts.
Annex A-3
<PAGE>
Class A-2 Deferred Interest: With respect to any Payment Date,
the excess, if any, of interest due at the Class A-2 Formula Note Rate over
interest due at the Class A-2 Note Rate.
Class A-2 Deficiency Amount: The related "Deficiency Amount"
as defined in the Policy.
Class A-2 Formula Note Rate: For any Interest Accrual Period,
the lesser of (i)(x) with respect to any Payment Date which occurs on or prior
to the Class A-2 Optional Redemption Date for the Class A-2 Notes, LIBOR plus
0.38% per annum and (y) for any Payment Date thereafter, LIBOR plus 0.76% per
annum and (ii) 15.50%.
Class A-2 Interest Payment Amount: With respect to any Payment
Date, the product of (x) one-twelfth of the Class A-2 Note Rate applicable to
such Payment Date and (y) the Class A-2 Note Principal Balance immediately prior
to such Payment Date (based on a 360-day year and the actual number of days in
the Interest Accrual Period).
Class A-2 Maximum Rate: As to any Interest Period, the
Weighted Average Net Loan Rate on the Pool II Mortgage Loans for the Collection
Period during which such Interest Period begins (adjusted to an effective rate
reflecting accrued interest calculated on the basis of the actual number of days
in the Collection Period commencing in the month in which such Interest Period
commences and a year assumed to consist of 360 days).
Class A-2 Maximum Principal Payment: With respect to any
Payment Date during the Managed Amortization Period, the Pool II Net Principal
Collections and (ii) with respect to any Payment Date during the Rapid
Amortization Period, 100% of the Pool II Principal Collections relating to such
Payment Date.
Class A-2 Note: Any Note designated as the "Class A-2 Asset
Backed Note" on the face thereof in substantially the form of Exhibit A hereto.
Class A-2 Note Principal Balance: As of any time of
determination, the Original Class A-2 Note Principal Balance of the Class A-2
Notes, less any amounts actually distributed therefore as principal thereon to
the Class A-2 Notes on all prior Payment Dates.
Class A-2 Note Rate: For any Interest Accrual Period, the
lesser of the Class A-2 Formula Note Rate and the Class A-2 Maximum Rate.
Class A-2 Noteholder: Any Holder of a Class A-2 Note.
Class A-2 Optional Redemption Date: The date on which the
Sponsor or the Insurer, as applicable, is first able to exercise its right of
optional redemption of the Class A-2 Notes pursuant to Section 10.1 of the
Indenture.
Class A-2 Principal Payment Amount: On any Payment Date, the
excess of (x) the Class A-2 Maximum Principal Payment over (y) the Pool II
Overcollateralization Reduction Amount; provided, however, that for the Payment
Date which occurs in January 2000, the Class A-2 Principal Payment Amount shall
equal the excess of (x) the sum of (i) the Class A-2
Annex A-4
<PAGE>
Maximum Principal Payment and (ii) the difference between the Original Class A-2
Pre-Funded Amount and the aggregate Cut-Off Date Principal Balance of all
Subsequent Mortgage Loans transferred to Pool II as of such Payment Date over
(y) the Pool II Overcollateralization Reduction Amount.
Class A-2 Reimbursement Amount: As of any Payment Date, the
sum of (x)(i) all related payments made pursuant to the Policy by the Insurer
and in each case not previously repaid to the Insurer pursuant to Section
8.6(d)(vi) of the Indenture, plus (ii) interest accrued on each such payment
made pursuant to the Policy not previously repaid calculated at the Late Payment
Rate (as defined in the Policy) from the date the Insurer made the related
payment and (y)(i) any other amounts then due and owing to the Insurer under the
Insurance Agreement, plus (ii) interest on such amounts.
Clearing Agency: An organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
Clearing Agency Participant: A broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
Closed End Mortgage Loans: With respect to Pool I, Mortgage
Loans consisting solely of fixed-rate closed-end second lien mortgage loans
under the Mortgage Notes. The term "Closed End Mortgage Loan" includes the term
"Initial Closed End Mortgage Loans."
Closed End Principal Balance: As to any Closed End Mortgage
Loan, other than a Liquidated Mortgage Loan, and as of any date, the related
Cut-Off Date Principal Balance minus all collections credited as principal
against the Closed End Principal Balance of such Closed End Mortgage Loan in
accordance with the related Mortgage Note prior to such day.
Closing Date: December 22, 1999.
Code: The Internal Revenue Code of 1986, as amended from time
to time.
Collateral: As defined in the Granting Clause of the
Indenture.
Collection Account: As defined in the Sale and Servicing
Agreement.
Collection Period: With respect to any Payment Date and any
Mortgage Loans, the calendar month preceding such Payment Date.
Combined Loan-to-Value Ratio: (i) With respect to any HELOC
Mortgage Loan as of any date, the percentage equivalent of a fraction, the
numerator of which is the sum of (A) the Credit Limit and (B) the outstanding
principal balance as of the date of execution of the related Credit Line
Agreement (or as of any subsequent date, if any, as of which such outstanding
principal balance may be determined in connection with an increase in the Credit
Limit for such HELOC Mortgage Loan) of any mortgage loan or mortgage loans that
are senior in priority to the HELOC Mortgage Loan and which is secured by the
same Mortgaged Property and the denominator of which is the lesser of (C) the
Appraised Value of the related Mortgaged
Annex A-5
<PAGE>
Property as set forth in the Mortgage File on such date of execution or on such
subsequent date, if any, or (D) in the case of a Mortgaged Property purchased
within one year of such date of execution, the purchase price thereof and (ii)
with respect to any Closed End Mortgage Loan as of any date, the percentage
equivalent of a fraction, the numerator of which is the sum of (A) the original
principal balance of the Closed End Mortgage Loan and (B) any outstanding
principal balances of mortgage loans senior to such Closed End Mortgage Loan
(calculated at the date of origination of the Closed End Mortgage Loan) and the
denominator of which is the lesser of (C) the Appraised Value of the related
Mortgaged Property as set forth in the loan files at such date or origination
and (D) in the case of a Mortgaged Property purchased within one year of the
origination of the related Closed End Mortgage Loan, the purchase price of such
Mortgaged Property.
Company: GreenPoint Mortgage Funding, Inc.
Controlling Party: The Insurer, so long as no Insurer Default
shall have occurred and be continuing, and the Indenture Trustee, for so long as
a Insurer Default shall have occurred and be continuing.
Corporate Trust Office: With respect to (i) the Indenture
Trustee, the principal corporate trust office of the Indenture Trustee at which
at any particular time its corporate trust business shall be administered, which
office at date of the execution of the Indenture is located at 1 Bank One Plaza,
Suite ILI-0126, Chicago, Illinois 60670-0126, Attention: Corporate Trust
Services Division (for the purposes of Section 3.2 of the Indenture, such office
is located at 14 Wall Street, 8th Floor, New York, New York 10005) and (ii) with
respect to the Owner Trustee, the principal corporate trust office of the Owner
Trustee located at Rodney Square North, 1100 North Market Street, Wilmington,
Delaware 19890-0001, Attention: Corporate Trust Administration, or at such other
address as the Owner Trustee may designate by notice to the Certificateholders
and the Sponsor, or the principal corporate trust office of any successor Owner
Trustee (the address of which the successor owner trustee will notify the
Certificateholders and the Sponsor).
Credit Limit: As to any HELOC Mortgage Loan, the maximum
principal balance permitted under the terms of the related Credit Line
Agreement.
Credit Limit Utilization Rate: As to any HELOC Mortgage Loan,
the percentage equivalent of a fraction the numerator of which is the principal
balance for such HELOC Mortgage Loan and the denominator of which is the related
Credit Limit.
Credit Line Agreement: With respect to any HELOC Mortgage
Loan, the related home equity line of credit agreement and promissory note
executed by the related Mortgagor and any amendment or modification thereof.
Credit Scores: With respect to the Mortgage Loans, statistical
credit scores obtained by mortgage lenders in connection with the loan
application to help assess a borrower's credit worthiness.
Crossover Amount: As defined in Section 8.6(d)(vii) of the
Indenture.
Annex A-6
<PAGE>
Cut-Off Date: With respect to the Initial Mortgage Loans, the
Initial Cut-Off Date. With respect to the Subsequent Mortgage Loans, the
applicable Subsequent Cut-Off Date. With respect to the Eligible Substitute
Mortgage Loans, the Substitute Cut-Off Date.
Cut-Off Date Principal Balance: With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the applicable Cut-Off Date.
Default: Any occurrence that is, or with notice or the lapse
of time or both would become, a Rapid Amortization Event.
Defective Mortgage Loan: A Mortgage Loan subject to retransfer
pursuant to Section 2.03 or 2.05 of the Sale and Servicing Agreement.
Deferred Interest : The Class A-1 Deferred Interest or the
Class A-2 Deferred Interest.
Deficiency Amount: The Class A-1 Deficiency Amount or the
Class A-2 Deficiency Amount.
Definitive Notes: As defined in Section 2.11 of the Indenture.
Delinquent: A Mortgage Loan is "delinquent" if any payment due
thereon is not made by the close of business on the day such payment is
scheduled to be due. A Mortgage Loan is "30 days delinquent" if such payment has
not been received by the close of business on the corresponding day of the month
immediately succeeding the month in which such payment was due, or, if there is
no such corresponding day (e.g., as when a 30-day month follows a 31-day month
in which a payment was due on the 31st day of such month) then on the last day
of such immediately succeeding month. Similarly for "60 days delinquent," "90
days delinquent" and so on.
Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is Cede & Co., as the registered Holder of
Class A-1 Notes evidencing $193,275,000 in initial aggregate principal amount of
the Class A-1 Notes and as the registered Holder of Class A-2 Notes evidencing
$52,370,000 in initial aggregate principal amount of the Class A-2 Notes. The
Depository shall at all times be a "clearing corporation" as defined in Section
8-102(5) of the UCC of the State of New York.
Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time the Depository
effects book-entry transfers and pledges of securities deposited with the
Depository.
Determination Date: With respect to any Payment Date, the
third Business Day prior to such Payment Date.
Draw: With respect to any HELOC Mortgage Loan, an additional
borrowing by the Mortgagor subsequent to the related Cut-Off Date in accordance
with the related Credit Line Agreement.
Annex A-7
<PAGE>
Draw Period: With respect to any HELOC Mortgage Loan, the
period of time specified in the related Credit Line Agreement whereby a
Mortgagor may make a Draw under the related Credit Line Agreement, not to exceed
five or fifteen years (as applicable) unless extended pursuant to such Credit
Line Agreement and the Sale and Servicing Agreement, such extension to be
limited by the provisions set forth in Section 2.4 of the Sale and Servicing
Agreement.
Eligible Account: An account that is either (i) maintained
with a depository institution whose short-term debt obligations throughout the
time of any deposit therein are rated in the highest short-term debt rating
category by Standard & Poor's and Moody's, (ii) an account or accounts
maintained with a depository institution with a minimum long-term unsecured debt
rating by Standard & Poor's and Moody's which is at least investment grade
provided that the deposits in such account or accounts are fully insured by
either the BIF or the SAIF, or (iii) a segregated trust account maintained with
the corporate trust department of the Indenture Trustee in its fiduciary
capacity, or (iv) an account otherwise acceptable to each Rating Agency and the
Insurer, as evidenced at closing by delivery of a rating letter by each Rating
Agency and thereafter by delivery of a letter from each Rating Agency and the
Insurer to the Indenture Trustee, within 30 days of receipt of notice of such
deposit.
Eligible Investments: One or more of the following (excluding
any callable investments purchased at a premium):
(i) direct obligations of, or obligations fully guaranteed
as to timely payment of principal and interest by, the United States
or any agency or instrumentality thereof, provided that such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in
clause (i) maturing not more than three months from the date of
acquisition thereof, provided that the short-term unsecured debt
obligations of the party agreeing to repurchase such obligations are
at the time rated by each Rating Agency in its highest short-term
rating category (which is A-1+ for Standard & Poor's and P-1 for
Moody's);
(iii) certificates of deposit, time deposits and bankers'
acceptances (which, if Moody's is a Rating Agency, shall each have
an original maturity of not more than 90 days and, in the case of
bankers' acceptances, shall in no event have an original maturity of
more than 365 days) of any U.S. depository institution or trust
company incorporated under the laws of the United States or any
state thereof and subject to supervision and examination by federal
and/or state banking authorities, provided that the unsecured
short-term debt obligations of such depository institution or trust
company at the date of acquisition thereof have been rated by each
of Moody's and Standard & Poor's in its highest unsecured short-term
debt rating category;
(iv) commercial paper (having original maturities of not
more than 270 days) of any corporation incorporated under the laws
of the United States or any state thereof which on the date of
acquisition has been rated by Standard & Poor's and Moody's in their
highest short-term debt rating categories;
Annex A-8
<PAGE>
(v) short-term investment funds ("STIFS") sponsored by any
trust company or national banking association incorporated under the
laws of the United States or any state thereof which on the date of
acquisition has been rated by Standard & Poor's and Moody's in their
respective highest applicable rating category; and
(vi) interests in any money market fund which at the date
of acquisition of the interests in such fund and throughout the time
such interests are held in such fund has a rating of Aaa by Moody's
and either AAAm or AAAm-G by Standard & Poor's or such lower rating
as will not result in the qualification, downgrading or withdrawal
of the then-current rating assigned to the Notes by each Rating
Agency without regard to the Policy;
(vii) other obligations or securities that are acceptable
to each Rating Agency and the Insurer as an Eligible Investment
hereunder and will not result in a reduction in the then current
rating of the Notes without regard to the Policy, as evidenced by a
letter to such effect from such Rating Agency and the Insurer and
with respect to which the Servicer has received confirmation that,
for tax purposes, the investment complies with the last clause of
this definition;
provided that no instrument described hereunder shall evidence 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 its stated maturity.
Eligible Substitute Mortgage Loan: A mortgage loan substituted
by the Sponsor, with the consent of the Insurer, for a Defective Mortgage Loan
which must, on the date of such substitution, (i) have an outstanding Principal
Balance (or, in the case of a substitution of more than one Mortgage Loan for a
Defective Mortgage Loan, an aggregate Principal Balance), equal to or less than
the Principal Balance of the Defective Mortgage Loan as of the applicable
Cut-Off Date; (ii) except for HELOC Mortgage Loans still in their teaser period,
have a Loan Rate not less than the Loan Rate of the Defective Mortgage Loan and
not more than 4.00% in excess of the Loan Rate of such Defective HELOC Mortgage
Loan; (iii) have a Loan Rate based on the same Index with adjustments to such
Loan Rate made on the same date on which the Defective HELOC Mortgage Loan's
interest rate adjusts; (iv) have a Margin that is not less than the Margin of
the Defective HELOC Mortgage Loan and not more than 100 basis points higher than
the Margin for the Defective HELOC Mortgage Loan; (v) have a mortgage of the
same or higher level of priority as the Mortgage Loan relating to the Defective
Mortgage Loan at the time such Mortgage Loan was transferred to the Trust; (vi)
have a remaining term to maturity not more than 120 months earlier and not more
than 180 months later than the remaining term to maturity of the Defective
Mortgage Loan; (vii) comply with each representation and warranty as to the
Mortgage Loans set forth in the Sale and Servicing Agreement (deemed to be made
as of the date of substitution); (viii) have an original Combined Loan-to-Value
Ratio not greater than that of the Defective Mortgage Loan; and (ix) have a
Credit Score greater than or equal to the Credit
Annex A-9
<PAGE>
Score of the Defective Mortgage Loan at the time such Mortgage Loan was
transferred to the Trust.
ERISA: Employee Retirement Income Security Act of 1974, as
amended.
Event of Servicing Termination: As defined in Section 6.01 of
the Sale and Servicing Agreement.
Event of Termination: As defined in Article IX of the Purchase
Agreement.
Excess Cashflow: With respect to each Pool and any Payment
Date, the related Available Funds with respect to such Pool for such Payment
Date which remain on deposit in the Collection Account after taking into account
the distributions listed in clauses (i) through (vii) of Section 8.6(d) of the
Indenture with respect to such Pool and such Payment Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
FDIC: The Federal Deposit Insurance Corporation or any
successor thereto.
Final Scheduled Payment Date: The Payment Date in December
2025 whereby the Noteholders shall be entitled to receive a payment of principal
in an amount equal to the respective outstanding Note Principal Balance. The
Final Scheduled Payment Date is the date which is thirteen months after the date
which is the latest possible maturity date of an Initial Mortgage Loan which
amortizes according to its terms.
Foreclosure Profit: With respect to a Liquidated Mortgage
Loan, the amount, if any, by which (i) the aggregate of its Net Liquidation
Proceeds exceeds (ii) the related Principal Balance (plus accrued and unpaid
interest thereon at the applicable Loan Rate from the date interest was last
paid through the last day in the related Collection Period) of such Liquidated
Mortgage Loan immediately prior to the final recovery of its Liquidation
Proceeds.
GAAP: Generally accepted accounting principles, consistently
applied.
Grant: Mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other monies payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto.
Gross Margin: As to any HELOC Mortgage Loans, the percentage
set forth as the "Gross Margin" for such HELOC Mortgage Loans on Exhibit A to
the Sale and Servicing Agreement.
Annex A-10
<PAGE>
HELOC Mortgage Loans: With respect to Pool I and Pool II,
Mortgage Loans consisting solely of adjustable-rate home equity revolving credit
line loans under the Credit Line Agreements. The term "HELOC Mortgage Loan"
includes the terms "Initial HELOC Mortgage Loans" and "Subsequent Mortgage
Loans."
HELOC Principal Balance: As to any HELOC Mortgage Loan, other
than a Liquidated Mortgage Loan, and as of any date, the related Cut-Off Date
Principal Balance, plus (i) any Additional Balance in respect of such HELOC
Mortgage Loan, minus (ii) all collections credited as principal against the
HELOC Principal Balance of any such HELOC Mortgage Loan in accordance with the
related Credit Line Agreement prior to such day.
Holder or Noteholder: The Person in whose name a Note is
registered on the Note Register.
Indebtedness: With respect to any Person at any time, (a)
indebtedness or liability of such Person for borrowed money whether or not
evidenced by bonds, debentures, notes or other instruments, or for the deferred
purchase price of property or services (including trade obligations); (b)
obligations of such Person as lessee under leases which should have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases; (c) current liabilities of such Person in respect of funding
vested benefits under plans covered by Title IV of ERISA; (d) obligations issued
for or liabilities incurred on the account of such Person; (e) obligations or
liabilities of such Person arising under acceptance facilities; (f) obligations
of such Person under any guarantees, endorsements (other than for collection or
deposit in the ordinary course of business) and other contingent obligations to
purchase, to provide funds for payment, to supply funds to invest in any Person
or otherwise to assure a creditor against loss; (g) obligations of such Person
secured by any lien on property or assets of such Person, whether or not the
obligations have been assumed by such Person; or (h) obligations of such Person
under any interest rate or currency exchange agreement.
Indemnification Agreement: The Indemnification Agreement,
dated as of December 15, 1999, by and among the Insurer and the Underwriter.
Indenture: The Indenture, dated as of December 1, 1999, by and
between the Issuer and the Indenture Trustee, as the same may be amended and
supplemented from time to time.
Indenture Trustee: Bank One, National Association, a national
banking association, not in its individual capacity but as trustee under the
Indenture, or any successor trustee under the Indenture.
Indenture Trustee Issuer Secured Obligations: All amounts and
obligations which the Issuer may at any time owe to the Indenture Trustee for
the benefit of the Noteholders under the Indenture or the Notes.
Independent: When used with respect to any specified Person,
that the person (a) is in fact independent of the Issuer, any other obligor upon
the Notes, the Sponsor and any Affiliate of any of the foregoing persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Sponsor or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Sponsor or any
Annex A-11
<PAGE>
Affiliate of any of the foregoing Persons as an officer, employee, promoter,
underwriter, trustee, partner, director or Person performing similar functions.
Independent Certificate: A certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, prepared by an Independent appraiser or other expert appointed
pursuant to an Issuer Order and approved by the Indenture Trustee in the
exercise of reasonable care, and such opinion or certificate shall state that
the signer has read the definition of "Independent" in the Indenture and that
the signer is Independent within the meaning thereof.
Index: With respect to each Interest Rate Adjustment Date for
a HELOC Mortgage Loan, the highest "prime rate" as published in the "Money
Rates" table of The Wall Street Journal as of the last business day of the
previous Billing Cycle.
Initial Closed End Mortgage Loans: With respect to Pool I,
Mortgage Loans consisting solely of fixed-rate closed-end second lien mortgage
loans under the Mortgage Notes which are transferred to the Trust on the Closing
Date.
Initial Cut-Off Date: For any Initial Mortgage Loan, the close
of business on November 30, 1999.
Initial HELOC Mortgage Loans: With respect to Pool I and Pool
II, Mortgage Loans consisting solely of adjustable-rate home equity revolving
credit line loans under the Credit Line Agreements which are transferred to the
Trust on the Closing Date.
Initial Mortgage Loans: The Initial Closed End Mortgage Loans
and the Initial HELOC Mortgage Loans.
Initial Pool I Balance: $154,536,428.19.
Initial Pool I Mortgage Loans: The Initial Closed End Mortgage
Loans included in Pool I and the Initial HELOC Mortgage Loans included in Pool
I.
Initial Pool II Balance: $41,109,718.39.
Initial Pool II Mortgage Loans: The Initial HELOC Mortgage
Loans included in Pool II.
Insurance Agreement: The Insurance and Indemnity Agreement,
dated as of December 22, 1999, by and among the Insurer, the Servicer, the
Sponsor and the Indenture Trustee.
Insurance Policy: Any hazard, title or primary mortgage
insurance policy relating to a Mortgage Loan, but shall not include the Policy.
Annex A-12
<PAGE>
Insurance Proceeds: Proceeds paid by any insurer (other than
the Insurer) pursuant to any insurance policy covering a Mortgage Loan, or
amounts required to be paid by the Servicer pursuant to the last sentence of
Section 3.04 of the Sale and Servicing Agreement, net of any component thereof
(i) covering any expenses incurred by or on behalf of the Servicer in connection
with obtaining such proceeds, (ii) that is applied to the restoration or repair
of the related Mortgaged Property, (iii) released to the Mortgagor in accordance
with the Servicer's normal servicing procedures or (iv) required to be paid to
any holder of a mortgage senior to such Mortgage Loan.
Insured Payment: As defined in the Policy with respect to a
Class of Notes and as of any Payment Date.
Insurer: Ambac Assurance Corporation, a Wisconsin stock
insurance company.
Insurer Default: The failure by the Insurer to make a payment
required under the Policy in accordance with the terms thereof.
Insurer Issuer Secured Obligations: All amounts and
obligations which the Issuer may at any time owe to or on behalf of the Insurer
under the Indenture, the Insurance Agreement or any other Basic Document.
Interest Accrual Period: With respect to any Payment Date, the
period from and including the prior Payment Date (or, in the case of the January
2000 Payment Date, from and including the Closing Date) to, but excluding, the
current Payment Date, with interest being computed on the basis of the actual
number of days in such Interest Accrual Period and a 360-day year.
Interest Collections: With respect to each Pool and for any
Payment Date, the sum of all payments by or on behalf of Mortgagors and any
other amounts constituting interest, including the portion of Net Liquidation
Proceeds and Insurance Proceeds allocated to interest pursuant to the terms of
the related Loan Agreement (net of the applicable servicing fees and excluding
the fees or late charges or similar administrative fees paid by Mortgagors),
during the related Collection Period plus investment earnings on funds on
deposits made to the Collection Account, less the related Servicing Fee for the
related Collection Period. The terms of the related Loan Agreement shall
determine the portion of each payment in respect of such Mortgage Loan that
constitutes principal or interest.
Interest Determination Date: (i) With respect to any Interest
Accrual Period (other than the initial Interest Accrual Period), the second
London Business Day preceding such first day of such Interest Accrual Period and
(ii) with respect to the Initial Accrual Period, the second London Business Day
preceding the Closing Date.
Interest Payment Amount: The Class A-1 Interest Payment Amount
or the Class A-2 Interest Payment Amount.
Interest Rate Adjustment Date: With respect to each HELOC
Mortgage Loan, any date on which the Loan Rate is adjusted in accordance with
the related Credit Line Agreement.
Annex A-13
<PAGE>
Issuer or Trust: GreenPoint Home Equity Loan Trust 1999-2, a
Delaware business trust, until a successor replaces it and, thereafter, means
the successor and, for purposes of any provision contained in the Indenture and
required by the TIA, each other obligor on the Notes.
Issuer Order and Issuer Request: A written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
Issuer Secured Obligations: The Insurer Issuer Secured
Obligations and the Indenture Trustee Issuer Secured Obligations.
Issuer Secured Parties: Each of the Indenture Trustee in
respect of the Indenture Trustee Issuer Secured Obligations and the Insurer in
respect of the Insurer Issuer Secured Obligations.
LIBOR: With respect to any Interest Accrual Period, the rate
determined by the Indenture Trustee on the related Interest Determination Date
appearing on the Telerate Screen Page 3750, as of 11:00 AM, London time, on the
second LIBOR Business Day prior to the first day of such Interest Accrual
Period. If such rate does not appear on such page (or such other page as may
replace that page on that service, or if such service is no longer offered, such
other service for displaying LIBOR or comparable rates as may be selected by the
Sponsor after consultation with the Indenture Trustee), the rate will be the
Reference Bank Rate.
LIBOR Business Day: Any day other than (i) a Saturday or a
Sunday or (ii) a day on which banking institutions in the State of New York or
in the City of London, England are required or authorized by law to be closed.
Lien: Any mortgage, deed of trust, pledge, conveyance,
hypothecation, assignment, participation, deposit arrangement, encumbrance, lien
(statutory or other), preference, priority right or interest or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing and the filing of any financing statement under the UCC
(other than any such financing statement filed for informational purposes only)
or comparable law of any jurisdiction to evidence any of the foregoing;
provided, however, that any assignment pursuant to Section 5.02 of the Sale and
Servicing Agreement shall not be deemed to constitute a Lien.
Lifetime Rate Cap: With respect to each HELOC Mortgage Loan
with respect to which the related Mortgage Note provides for a lifetime rate
cap, the maximum Loan Rate permitted over the life of such HELOC Mortgage Loan
under the terms of the related Credit Line Agreement previously delivered to the
Indenture Trustee.
Liquidated Mortgage Loan: As to any Payment Date, any Mortgage
Loan in respect of which the Servicer has determined, in accordance with the
servicing procedures specified herein, as of the end of the related Collection
Period, that all Liquidation Proceeds which it expects to recover with respect
to the disposition of such Mortgage Loan or the related REO have been recovered.
Annex A-14
<PAGE>
Liquidation Expenses: Out-of-pocket expenses (exclusive of
overhead) which are incurred by the Servicer in connection with the liquidation
of any Mortgage Loan and not recovered under any insurance policy, including,
without limitation, legal fees and expenses, any unreimbursed amount expended
pursuant to Section 3.06 of the Sale and Servicing Agreement (including, without
limitation, amounts advanced to correct defaults on any mortgage loan which is
senior to such Mortgage Loan and amounts advanced to keep current or pay off a
mortgage loan that is senior to such Mortgage Loan) respecting the related
Mortgage Loan and any related and unreimbursed expenditures with respect to real
estate property taxes, water or sewer taxes, condominium association dues,
property restoration or preservation or insurance against casualty, loss or
damage.
Liquidation Loss Amounts: With respect to any Payment Date and
Mortgage Loan that became a Liquidated Mortgage Loan during the related
Collection Period, the unrecovered portion of the related Principal Balance
thereof at the end of such Collection Period, after giving effect to the Net
Liquidation Proceeds applied in reduction of such Principal Balance.
Liquidation Proceeds: Proceeds (including Insurance Proceeds)
received in connection with the liquidation of any Mortgage Loan or related REO,
whether through trustee's sale, foreclosure sale or otherwise.
Loan Purchase Price: With respect to any Mortgage Loan
purchased from the Trust on a Determination Date pursuant to Section 3.06 of the
Sale and Servicing Agreement, an amount equal to the Principal Balance of such
Mortgage Loan as of the date of purchase, plus one month's interest on the
outstanding Principal Balance thereof as of the beginning of the preceding
Collection Period computed at the Loan Rate less the Servicing Fee, together
with, without duplication, the aggregate amount of (i) all delinquent interest,
all advances made by the Servicer and not subsequently recovered from the
related Mortgage Loan and (ii) any Reimbursement Amount related to such Mortgage
Loan.
Loan Rate: With respect to any HELOC Mortgage Loan and as of
any day, the per annum rate of interest applicable under the related Credit Line
Agreement to the calculation of interest for such day on the Principal Balance
of such HELOC Mortgage Loan. With respect to any Closed End Mortgage Loan and as
of any day, the per annum rate of interest applicable under the related Mortgage
Note to the calculation of interest for such day on the Principal Balance of
such Closed End Mortgage Loan.
Loan Rate Cap: With respect to each Mortgage Loan, the lesser
of (i) the Lifetime Rate Cap, if any, or (ii) the applicable state usury
ceiling, if any.
London Business Day: A day on which banks are open for dealing
in foreign currency, and exchange in London and New York City.
Losses: Any and all out-of-pocket losses, claims, damages,
liabilities or expenses (including reasonable attorneys' fees and disbursements)
directly incurred by any person specified in the Purchase
Annex A-15
<PAGE>
Agreement, resulting from transactions entered into under the
Purchase Agreement (other than liability for taxes). Losses must be accounted
for and presented for reimbursement documented in reasonable detail and within a
reasonable time.
Managed Amortization Period: With respect to each Class of
Notes, the period commencing on January 18, 2000 and ending on the earlier to
occur of (x) the December 2004 Payment Date and (y) the Payment Date which
immediately precedes the occurrence of a Rapid Amortization Event with respect
to such Class of Notes.
Management Agreement: The Management Agreement, dated as of
December 1, 1999, by and between the Company and the Issuer.
Management Fee: $500 per month.
Manager: The Person acting in such capacity pursuant to the
Management Agreement or its successors or assigns, which shall initially be the
Company.
Margin: With respect to each HELOC Mortgage Loan, the fixed
percentage amount set forth in the related Loan Agreement which amount is added
to the Prime Rate in accordance with the terms of the related Loan Agreement to
determine the Loan Rate for such HELOC Mortgage Loan, subject to any maximum.
Minimum Monthly Payment: With respect to any Mortgage Loan and
any month, the minimum amount required to be paid by the related Mortgagor in
that month.
Moody's: Moody's Investors Service, Inc.
Mortgage: The mortgage, deed of trust or other instrument
creating a first or junior lien on an estate in fee simple interest in real
property securing a Mortgage Note or Credit Line Agreement.
Mortgage File: The mortgage documents listed in Section 2.01
to the Sale and Servicing Agreement pertaining to a particular Mortgage Loan and
any additional documents required to be added to the Mortgage File pursuant to
the Sale and Servicing Agreement.
Mortgage Loan Schedule: With respect to any date, the schedule
of Mortgage Loans included in the Trust on such date. The schedule of Initial
Mortgage Loans as of the Initial Cut-Off Date is the schedule set forth in
Exhibit A to the Sale and Servicing Agreement, which schedule sets forth as to
each such Mortgage Loan, to the extent applicable, (i) the Cut-Off Date
Principal Balance, (ii) the Credit Limit, (iii) the Gross Margin, (iv) the
Lifetime Rate Cap, (v) the account number, (vi) the current Loan Rate, (vii) the
Combined Loan-to-Value Ratio, (viii) a code specifying the property type, (ix) a
code specifying documentation type and (x) a code specifying lien position. The
Mortgage Loan Schedule will be deemed to be amended from time to time to reflect
Additional Balances, Subsequent Mortgage Loans and Eligible Substitute Mortgage
Loans.
Mortgage Loans: The mortgage loans originated pursuant to a
Credit Line Agreement and, including any Additional Balances with respect
thereto, as well as any Closed End Loans, that are transferred and assigned to
the Indenture Trustee pursuant to Sections 2.01
Annex A-16
<PAGE>
and 2.10 of the Sale and Servicing Agreement, together with the Related
Documents, exclusive of mortgage loans that are retransferred to the Sponsor or
the Servicer from time to time pursuant to Sections 2.03, 2.05, 2.07 or 3.06 of
the Sale and Servicing Agreement as from time to time are held as a part of the
Trust. The Mortgage Loans originally so held are identified in the Mortgage Loan
Schedule delivered on the Closing Date. The Mortgage Loans shall also include
any Eligible Substitute Mortgage Loans substituted by the Sponsor for a
Defective Mortgage Loan pursuant to Sections 2.03 and 2.05 of the Sale and
Servicing Agreement as well as any Subsequent Mortgage Loans conveyed to the
Trust pursuant to Section 2.10 of the Sale and Servicing Agreement. The term
"Mortgage Loan" includes the terms "HELOC Mortgage Loans" and "Closed End
Mortgage Loans."
Mortgage Note: The note or other evidence of indebtedness
evidencing the indebtedness of a Mortgagor under a Closed End Mortgage Loan.
Mortgaged Property: The underlying property, including any
real property and improvements thereon, securing a Mortgage Loans.
Mortgagor: The obligor on a Mortgage Note or Credit Line
Agreement.
Net Liquidation Proceeds: With respect to any Liquidated
Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses.
Net Loan Rate: With respect to any Mortgage Loan and as to any
day, the Loan Rate (assuming each HELOC Mortgage Loan is fully indexed) less the
Servicing Fee Rate, the Premium Percentage (multiplied by a fraction, the
numerator of which is the Note Principal Balance of the related Class of Notes
and the denominator of which is the related Pool Balance), the Trustee Fee Rate
and, after the December 2000 Payment Date, 0.50% per annum.
Note: A Class A-1 Note or a Class A-2 Note.
Note Owner: With respect to a Book-Entry Note, the person who
is the owner of such Book-Entry Note or following the issuance of Definitive
Notes, the registered owner of the Notes.
Note Paying Agent: The Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make payments
to and distributions from the Collection Account, including payment of principal
of or interest on the Notes on behalf of the Issuer.
Note Principal Balance: The Class A-1 Note Principal Balance
and/or the Class A-2 Note Principal Balance, as applicable.
Note Rate: The Class A-1 Note Rate or the Class A-2 Note Rate,
as applicable.
Note Register: As defined in Section 2.3 of the Indenture.
Note Registrar: As defined in Section 2.3 of the Indenture.
Annex A-17
<PAGE>
Officer's Certificate: A certificate signed by any Authorized
Officer of the Issuer, under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 11.1 of the Indenture
Section 314 of the Trust Indenture Act, and delivered to the Indenture Trustee.
Opinion of Counsel: One or more opinions of counsel who may,
except as otherwise expressly provided in the Indenture, be employees of or
counsel to the Issuer and, if addressed to the Insurer, satisfactory to the
Insurer, and which shall comply with any applicable requirements of Section 11.1
of the Indenture, and if addressed to the Insurer, shall be satisfactory to the
Insurer.
Optional Redemption Date: With respect to each Class of Notes,
the date on which the Sponsor is first able to exercise its right of optional
redemption of such Class of Notes pursuant to Section 10.1(b) of the Indenture.
Original Class A Note Principal Balance: The Original Class
A-1 Note Principal Balance or the Original Class A-2 Note Principal Balance.
Original Class A-1 Note Principal Balance: $193,275,000.
Original Class A-1 Pre-Funded Amount: $38,739,074.00
Original Class A-2 Note Principal Balance: $52,370,000.
Original Class A-2 Pre-Funded Amount: $11,260,926.00
Original Pool Balance: $195,646,146.58.
Original Pre-Funded Amount: $50,000,000.00.
Outstanding: As of the date of determination, all Notes
theretofore authenticated and delivered under the Indenture except:
(i) Notes theretofore canceled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money
in the necessary amount has been theretofore deposited with the
Indenture Trustee or any Note Paying Agent in trust for the
Holders of such Notes (provided, however, that if such Notes are
to be redeemed, notice of such redemption has been duly given
pursuant to the Indenture or provision therefor, satisfactory to
the Indenture Trustee); and
(iii) Notes in exchange for or in lieu of other Notes
which have been authenticated and delivered pursuant to the
Indenture unless proof satisfactory to the Indenture Trustee is
presented that any such Notes are held by a bona fide purchaser;
provided, however, that Notes which have been paid with proceeds of the Policy
shall continue to remain Outstanding for purposes of the Indenture until the
Insurer has been paid as subrogee
Annex A-18
<PAGE>
hereunder or reimbursed pursuant to the Insurance Agreement as evidenced by a
written notice from the Insurer delivered to the Indenture Trustee, and the
Insurer shall be deemed to be the Holder thereof to the extent of any payments
thereon made by the Insurer; provided, further, that in determining whether the
Holders of the requisite Outstanding Amount of the Notes have given any request,
demand, authorization, direction, notice, consent or waiver hereunder or under
any Basic Document, Notes owned by the Issuer, any other obligor upon the Notes,
the Sponsor or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
that a Responsible Officer of the Indenture Trustee either actually knows to be
so owned or has received written notice thereof shall be so disregarded. Notes
so owned that have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Indenture Trustee the
pledgees right so to act with respect to such Notes and that the pledgee is not
the Issuer, any other obligor upon the Notes, the Sponsor or any Affiliate of
any of the foregoing Persons.
Outstanding Amount: With respect to any date of determination,
the aggregate Note Principal Balance of all the Notes, or Class of Notes, as
applicable, Outstanding as of such date of determination.
Overcollateralization Amount: As applicable, the Pool I
Overcollateralization Amount or the Pool II Overcollateralization Amount.
Overcollateralization Deficiency Amount: As applicable, the
Pool I Overcollateralization Deficiency Amount or the Pool II
Overcollateralization Deficiency Amount.
Overcollateralization Deficit: As applicable, the Pool I
Overcollateralization Deficit or the Pool II Overcollateralization Deficit.
Overcollateralization Reduction Amount: As applicable, the
Pool I Overcollateralization Reduction Amount or the Pool II
Overcollateralization Reduction Amount.
Owner Trustee: Wilmington Trust Company, a Delaware banking
corporation, not in its individual capacity, but solely as owner trustee under
the Trust Agreement, and any successor Owner Trustee thereunder.
Owner Trustee Fee: A fee which is separately agreed to between
the Servicer and the Owner Trustee.
Owner Trustee Fee Rate: The per annum rate at which the Owner
Trustee Fee is calculated.
Payment Date: The fifteenth day of each month, or if such day
is not a Business Day, then the next Business Day, beginning in the month
immediately following the month of the initial issuance of the Notes.
Annex A-19
<PAGE>
Percentage Interest: As to any Note, the percentage obtained
by dividing the principal denomination (or notional amount) of such Note by the
aggregate of the principal denominations (or notional amounts) of all Notes of
the same class.
Person: Any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
Policy: The note guaranty insurance policy No. AB0330BE with
respect to the Class A Notes, dated December 22, 1999, issued by the Insurer to
the Indenture Trustee for the benefit of the Noteholders.
Pool: Pool I or Pool II .
Pool Balance: With respect to any date, the Pool I Balance or
the Pool II Balance, as applicable, as of such date.
Pool Delinquency Rate: As set forth in the Insurance
Agreement.
Pool Factor: A seven-digit decimal which the Servicer shall
compute monthly expressing the related Class A Note Principal Balance as of each
Payment Date (after giving effect to any distribution of principal on such
Payment Date) as a proportion of the Original Class A Note Principal Balance for
the related Class. On the Closing Date, the Pool Factor for each Pool will be
1.0000000. Thereafter, the Pool Factor shall decline to reflect reductions in
the related Class A Note Principal Balance resulting from distributions of
principal to the related Notes.
Pool I: The pool of Mortgage Loans identified in the related
Schedules of Mortgage Loans as having been assigned to Pool I, including any
Eligible Substitute Mortgage Loan delivered in the replacement thereof.
Pool I Available Funds: With respect to any Payment Date, the
amount then on deposit in the Collection Account with respect to Pool I, after
taking into account the deposits thereto made pursuant to Section 8.6(a) of the
Indenture and the Side Letter Agreement, if any (exclusive of the amount of any
related Insured Payment then on deposit in the Collection Account), less the sum
of the amounts described in clauses (i) and (ii) of Section 8.6(d) of the
Indenture with respect to Pool I on such Payment Date.
Pool I Balance: With respect to any date, the sum of (i) the
aggregate of the Principal Balances of all Pool I Mortgage Loans as of such date
and (ii) the related Pre-Funded Amount, if any.
Pool I Closed End Mortgage Loans: The Mortgage Loans in Pool I
which are Closed End Mortgage Loans.
Pool I Deficiency Amount: Has the meaning specified in Section
8.5(b)(i) of the Indenture.
Annex A-20
<PAGE>
Pool I HELOC Mortgage Loans: The Mortgage Loans in Pool I
which are HELOC Mortgage Loans.
Pool I Mortgage Loans: With respect to any date, those
Mortgage Loans contained in Pool I.
Pool I Net Principal Collections: The excess of (x) Pool I
Principal Collections over (y) the aggregate amount of all related Additional
Balances arising during the related Collection Period; provided, however, that,
in no event will Pool I Net Principal Collections be less than zero with respect
to any Payment Date.
Pool I Overcollateralization Amount: As of any Payment Date,
the excess, if any, of (x) the Pool I Balance as of such Payment Date over (y)
the Class A-1 Note Principal Balance as of such Payment Date (after taking into
account any reductions to such Class A-1 Note Principal Balance resulting from
payments made pursuant to clauses (iv) and (v) of Section 8.6(d) of the
Indenture on such Payment Date).
Pool I Overcollateralization Deficiency Amount: With respect
to any Payment Date, the difference, if any, between (i) the Pool I Specified
Overcollateralization Amount applicable to such Payment Date and (ii) the Pool I
Overcollateralization Amount applicable to such Payment Date.
Pool I Overcollateralization Deficit: With respect to any
Payment Date, the amount, if any, by which (i) the aggregate Class A-1 Note
Principal Balance, after taking into account the payment to the Class A-1
Noteholders of all principal from sources other than the Policy on such Payment
Date, exceeds (ii) the Pool I Balance as of such Payment Date.
Pool I Overcollateralization Reduction Amount: With respect to
any Payment Date, the excess of (x) the Pool I Overcollateralization Amount over
(y) the Pool I Specified Overcollateralization Amount assuming that the Class
A-1 Maximum Principal Payment had been distributed to the Class A-1 Noteholders
on such Payment Date.
Pool I Principal Collections: The Principal Collections
relating to Pool I.
Pool I Specified Overcollateralization Amount: With respect to
any Payment Date, the amount equal to the greater of (I) the sum of (a) the
related Spread Squeeze Amount, (b) 90% of the Principal Balance of Mortgage
Loans in Pool I which are 180 or more days Delinquent as of the close of
business of the last day of the related Collection Period and (c)(i) prior to
the Payment Date in January 2003, 3.50% of the Pool I Balance as of the Closing
Date and (ii) on or after the Payment Date in January 2003 the lesser of (x)
3.50% of the Pool I Balance as of the Closing Date and (y) 7.00% of the Pool I
Balance as of the current Payment Date and (II) the sum of (a) the related
Spread Squeeze Amount and (b) 0.50% of the Pool I Balance as of the Closing
Date; provided, however, that no such reduction described in clause (c)(ii)
shall occur unless (x) as of any such Payment Date, the aggregate cumulative
Liquidation Loss Amounts, with respect to the Pool I Mortgage Loans, are less
than 3.75% of the Pool I Balance as of the Closing Date and (y) as of any such
Payment Date, the related Six Month Rolling Pool Delinquency Rate for Pool I is
less than 2.50%.
Annex A-21
<PAGE>
Pool I Total Available Funds: With respect to any Payment
Date, the sum of (i) the Pool I Available Funds, (ii) any Crossover Amount
available from Pool II, (iii) amounts realized from the Pool I
Overcollateralization Amount and (iv) amounts on deposit in the Reserve Fund
(but only to the extent that Pool I Available Funds, plus any Crossover Amount
available from Pool II, are insufficient to pay the amounts specified in clauses
(iii), (v) and (vi) of Section 8.6 of the Indenture with respect to the Class
A-1 Notes), in each case as of such Payment Date.
Pool II: The pool of Mortgage Loans identified in the related
Schedules of Mortgage Loans as having been assigned to Pool II, including any
Eligible Substitute Mortgage Loans delivered in replacement thereof.
Pool II Available Funds: With respect to any Payment Date, the
amount then on deposit in the Collection Account with respect to Pool II, after
taking into account the deposits thereto made pursuant to Section 8.6(a) of the
Indenture and the Side Letter Agreement, if any (exclusive of the amount of any
related Insured Payment then on deposit in the Collection Account), less the sum
of the amounts described in clauses (i) and (ii) of Section 8.6(d) of the
Indenture with respect to Pool II on such Payment Date.
Pool II Balance: With respect to any date, the sum of (i) the
aggregate of the Principal Balances of all Pool II Mortgage Loans as of such
date plus (ii) the related Pre-Funded Amount, if any.
Pool II Deficiency Amount: As defined in Section 8.5(b)(ii) of
the Indenture.
Pool II HELOC Mortgage Loans: The Mortgage Loans in Pool II
which are HELOC Mortgage Loans.
Pool II Mortgage Loans: With respect to any date, those
Mortgage Loans contained in Pool II.
Pool II Net Principal Collections: The excess of (x) Pool II
Principal Collections over (y) the aggregate amount of all related Additional
Balances arising during the related Collection Period; provided, however, that,
in no event will Pool II Net Principal Collections be less than zero with
respect to any Payment Date.
Pool II Overcollateralization Amount: As of any Payment Date,
the excess, if any, of (x) the Pool II Balance as of such Payment Date over (y)
the Class A-2 Note Principal Balance as of such Payment Date (after taking into
account any reductions to such Class A-2 Note Principal Balance resulting from
payments made pursuant to clauses (iv) and (v) of Section 8.6(d) of the
Indenture on such Payment Date).
Pool II Overcollateralization Deficiency Amount: With respect
to any Payment Date, the difference, if any, between (i) the Pool II Specified
Overcollateralization Amount applicable to such Payment Date and (ii) the Pool
II Overcollateralization Amount applicable to such Payment Date.
Pool II Overcollateralization Deficit: With respect to any
Payment Date, the amount, if any, by which (i) the aggregate Class A-2 Note
Principal Balance, after taking into account the payment to the Class A-2
Noteholders of all principal from sources other than the Policy on such Payment
Date, exceeds (ii) the Pool II Balance as of such Payment Date.
Annex A-22
<PAGE>
Pool II Overcollateralization Reduction Amount: With respect
to any Payment Date, the excess of (x) the Pool II Overcollateralization Amount
over (y) the Pool II Specified Overcollateralization Amount assuming that the
Class A-2 Maximum Principal Payment had been distributed to the Class A-2
Noteholders on such Payment Date.
Pool II Principal Collections: The Principal Collections
relating to Pool II.
Pool II Specified Overcollateralization Amount: With respect
to any Payment Date, the amount equal to the greater of (I) the sum of (a) the
related Spread Squeeze Amount, (b) 90% of the Principal Balance of Mortgage
Loans in Pool II which are 180 or more days Delinquent as of the close of
business of the last day of the related Collection Period and (c)(i) prior to
the Payment Date in January 2003, 3.50% of the Pool II Balance as of the Closing
Date and (ii) on or after the Payment Date in January 2003 the lesser of (x)
3.50% of the Pool II Balance as of the Closing Date and (y) 7.00% of the Pool II
Balance as of the current Payment Date and (II) the sum of (a) the related
Spread Squeeze Amount and (b) 0.50% of the Pool II Balance as of the Closing
Date; provided, however, that no such reduction described in clause (c)(ii)
shall occur unless (x) as of any such Payment Date, the aggregate cumulative
Liquidation Loss Amounts, with respect to the Pool II Mortgage Loans, are less
than 3.75% of the Pool II Balance as of the Closing Date and (y) as of any such
Payment Date, the related Six Month Rolling Pool Delinquency Rate for Pool II is
less than 2.50%.
Pool II Total Available Funds: With respect to any Payment
Date, the sum of (i) the Pool II Available Funds, (ii) any Crossover Amount
available from Pool I, (iii) amounts realized from the Pool II
Overcollateralization Amount and (iv) amounts on deposit in the Reserve Fund
(but only to the extent that Pool II Available Funds, plus any Crossover Amount
available from Pool I, are insufficient to pay the amounts specified in clauses
(iii), (v) and (vi) of Section 8.6 of the Indenture with respect to the Class
A-2 Notes), in each case as of such Payment Date.
Predecessor Note: With respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.4 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
Preference Amount: As defined in the Policy.
Preference Claim: As defined in Section 5.13(b) of the
Indenture.
Pre-Funded Amount: As of any date of determination, the amount
on deposit in the Pre-Funding Account.
Annex A-23
<PAGE>
Pre-Funding Account: The custodial account or accounts
established and maintained with the Indenture Trustee for the benefit of the
Noteholders pursuant to Section 8.3 of the Indenture. The Pre-Funding Account
shall be an Eligible Account.
Pre-Funding Period: The period commencing on the Closing Date
and ending on the earlier of (i) the close of business on the Payment Date in
January 2000 and (ii) the date on which the amount on deposit in the Pre-Funding
Account is less than $100,000.
Premium Amount: With respect to the Class A-1 Notes and as to
any Payment Date, the product of (x) one-twelfth of the applicable Premium
Percentage and (y) the Class A-1 Note Principal Balance on such Payment Date
(before taking into account any distributions of the Class A-1 Principal Payment
Amount to be made on such Payment Date). With respect to the Class A-2 Notes and
as to any Payment Date, the product of (x) one-twelfth of the applicable Premium
Percentage and (y) the Class A-2 Note Principal Balance on such Payment Date
(before taking into account any distributions of the Class A-2 Principal Payment
Amount to be made on such Payment Date).
Premium Percentage: As defined in the Insurance Agreement.
Prime Rate: The interest rate entitled "Prime Rate" in the
published Money Rates table of The Wall Street Journal.
Principal Balance: As of any date and with respect to any
Mortgage Loan, the HELOC Principal Balance or the Closed End Principal Balance,
as applicable. For purposes of this definition, a Liquidated Mortgage Loan shall
be deemed to have a Principal Balance equal to the Principal Balance of the
related Mortgage Loan immediately prior to the final recovery of related
Liquidation Proceeds and a Principal Balance of zero thereafter.
Principal Collections: With respect to a Pool and as to any
Payment Date, the sum of all payments by or on behalf of Mortgagors and any
other amounts constituting principal (including, but not limited to,
Substitution Amounts and any portion of Insurance Proceeds or Net Liquidation
Proceeds allocable to principal of the applicable Mortgage Loan, but excluding
Foreclosure Profits) collected by the Servicer with respect to such Pool under
the related Mortgage Loans during the related Collection Period. The terms of
the related Loan Agreements shall determine the portion of each payment in
respect of a Mortgage Loan that constitutes principal or interest.
Proceeding: Any suit in equity, action at law or other
judicial or administrative proceeding.
Purchase Agreement: The Mortgage Loan Purchase Agreement,
dated as of December 1, 1999, by and between the Company and the Sponsor with
respect to the Mortgage Loans.
Purchase Date: With respect to a Subsequent Mortgage Loan, the
related Subsequent Transfer Date.
Annex A-24
<PAGE>
Purchase Price: With respect to the Principal Balance of the
Initial Mortgage Loans as of the Initial Cut-Off Date (and any Eligible
Substitute Mortgage Loan as of the date delivered), 100%; with respect to the
Principal Balances of all Additional Balances and all Subsequent Mortgage Loans,
100%.
Purchase Request: A request for the purchase of Subsequent
Mortgage Loans in the form of Exhibit B to the Purchase Agreement.
Purchaser Note: As defined in Section 10.02 of the Purchase
Agreement.
Rapid Amortization Period: With respect to each Class of
Notes, the period which immediately follows the end of the Managed Amortization
Period with respect to such Class of Notes.
Rating Agency: Each of Moody's and Standard & Poor's. If such
agency or a successor is no longer in existence, "Rating Agency" shall be such
statistical credit rating agency, or other comparable Person, designated by the
Sponsor and the Insurer, notice of which designation shall be given to the
Indenture Trustee. References in any Basic Document to the highest short term
unsecured rating category of a Rating Agency shall means A1+ or better in the
case of Standard & Poor's and P1 or better in the case of Moody's, and in the
case of any other Rating Agency shall mean the ratings such other Rating Agency
deems equivalent to the foregoing ratings. References in any Basic Document to
the highest long-term rating category of a Rating Agency shall mean "AAA" in the
case of Standard & Poor's and "Aaa" in the case of Moody's, and in the case of
any other Rating Agency, the rating such other Rating Agency deems equivalent to
the foregoing ratings.
Record Date: The last Business Day preceding the related
Payment Date; provided, however, that following the date on which Definitive
Notes are available, the Record Date shall be the last Business Day of the
calendar month preceding the month in which the related Payment Date occurs.
Redemption Date: In the case of a redemption of the Notes
pursuant to Section 10.1 of the Indenture, the Payment Date specified by the
Sponsor pursuant to Section 7.01(b) of the Sale and Servicing Agreement.
Redemption Price: In the case of a redemption of the Notes
pursuant to Section 10.1 of the Indenture, an amount equal to the unpaid
principal amount of the then outstanding principal amount of each class of Notes
being redeemed plus accrued and unpaid interest thereon to but excluding the
Redemption Date.
Reference Bank Rate: shall be determined on the basis of the
rates at which deposits in U.S. Dollars are offered by the reference banks
(which shall be three major banks that are engaged in transactions in the London
interbank market, selected by the Sponsor after consultation with the Indenture
Trustee) as of 11:00 A.M., London time, on the day that is two LIBOR Business
Days prior to the immediately preceding Payment Date to prime banks in the
London interbank market for a period of one month in amounts approximately equal
to the principal amount of the Notes then outstanding. The Indenture Trustee
will request the principal London office of each of the Reference Banks to
provide a quotation of its rate. If at least two
Annex A-25
<PAGE>
such quotations are provided, the rate will be the arithmetic mean of the
quotations. If on such date fewer than two quotations are provided as requested,
the rate will be the arithmetic mean of the rates quoted by one or more major
banks in New York City, selected by the Sponsor after consultation with the
Indenture Trustee, as of 11:00 A.M., New York City time, on such date for loans
in U.S. Dollars to leading European banks for a period of one month in amounts
approximately equal to the principal amount of the Notes then outstanding. If no
such quotations can be obtained, the rate will be LIBOR for the prior Payment
Date.
Reference Banks: Three major banks that are engaged in the
London interbank market, selected by the Sponsor after consultation with the
Indenture Trustee.
Related Documents: As defined in Section 2.01 of the Sale and
Servicing Agreement.
REO: A Mortgaged Property acquired by the Servicer or any
Sub-Servicer on behalf of the Trust through foreclosure or deed-in-lieu of
foreclosure in connection with a defaulted Mortgage Loan.
Repurchase Price: The sum of (a) the product of (i) the
outstanding principal balance of the related Mortgage Loan as of such date of
repurchase and (ii) the related Purchase Price, plus (b) any accrued interest as
of such date.
Reserve Fund: The account created and maintained for the
benefit of the Noteholders and the Insurer pursuant to Section 8.5 of the
Indenture.
Responsible Officer: With respect to the Indenture Trustee or
any officer of the Indenture Trustee with direct responsibility for the
administration of the Indenture and, also, with respect to a particular matter,
any other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
Retransfer Date: As defined in Section 2.07 of the Sale and
Servicing Agreement.
Retransfer Notice Date: As defined in Section 2.07 of the Sale
and Servicing Agreement.
SAIF: The Savings Association Insurance Fund, as from time to
time constituted, created under the Financial Institutions Reform, Recovery and
Enhancement Act of 1989, or if at any time after the execution of the Indenture,
the Savings Association Insurance Fund is not existing and performing duties now
assigned to it, the body performing such duties on such date.
Sale and Servicing Agreement: The Sale and Servicing
Agreement, dated as of December 1, 1999, by and among the Issuer, the Sponsor,
the Servicer and the Indenture Trustee, as the same may be amended or
supplemented from time to time.
SEC: The Securities and Exchange Commission and any successor
thereto.
Securityholders: The Noteholders and the Certificateholders.
Annex A-26
<PAGE>
Servicer: GreenPoint Mortgage Funding, Inc., a New York
corporation, any successor thereto and, after its termination as Servicer, any
successor.
Servicing Certificate: A certificate completed and executed by
a Servicing Officer in accordance with Section 4.01 of the Sale and Servicing
Agreement.
Servicing Fee: With respect to any Payment Date and each Pool,
the product of (i) one-twelfth of 0.50% and (ii) the aggregate Principal Balance
of the Mortgage Loans in such Pool on the first day of the Collection Period
preceding such Payment Date (or at the Initial Cut-Off Date with respect to the
first Payment Date).
Servicing Fee Rate: 0.50% per annum.
Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loan whose
name and specimen signature appear on a list of servicing officers furnished to
the Indenture Trustee (with a copy to the Insurer) by the Servicer on the
Closing Date, as such list may be amended from time to time.
Side Letter Agreement: The Side Letter Agreement dated as of
December 22, 1999 between the Insurer and the Company.
Six Month Rolling Pool Delinquency Rate: With respect to each
Pool, as of any Payment Date beginning with the sixth Payment Date, a number
equal to the average of the related Pool Delinquency Rates for each of the six
immediately preceding Collection Periods.
Specified Overcollateralization Amount: As applicable, the
Pool I Specified Overcollateralization Amount or the Pool II Specified
Overcollateralization Amount.
Sponsor: GreenPoint Mortgage Securities Inc. or its
successors-in-interest.
Spread Squeeze Amount: With respect to Pool I and Pool II, (A)
as of any Payment Date on or prior to the twelfth Payment Date, $0 and (B) as of
any Payment Date after the twelfth Payment Date, a number equal to the product
of (I) two times the positive difference, if any of (x) 1.75% and (y) the
related Spread Squeeze Percentage and (II) the related Pool Balance as of such
Payment Date.
Spread Squeeze Percentage: With respect to Pool I and Pool II
and as of any Payment Date after the twelfth Payment Date, a fraction (expressed
as a percentage), the numerator of which is the product of 12 and the related
Available Funds with respect to such Pool for such Payment Date which remain on
deposit in the Collection Account after taking into account the distributions
listed in clauses (i) through (vi) of Section 8.6(d) of the Indenture with
respect to such Pool and such Payment Date and the denominator of which is the
related Pool Balance as of such Payment Date.
Standard & Poor's: Standard & Poor's Ratings Service, a
division of The McGraw-Hill Companies, Inc., or its successor in interest.
Annex A-27
<PAGE>
Subsequent Cut-Off Date: With respect to any Subsequent
Mortgage Loan, the latter to occur of (x) the opening of business on the first
day of the calendar month in which the related Subsequent Transfer Date occurs
and (y) the date of origination of such Subsequent Mortgage Loan.
Subsequent Mortgage Loans: Each HELOC Mortgage Loan acquired
pursuant to Section 2.10 of the Sale and Servicing Agreement with funds on
deposit in the Pre-Funding Account during the Pre-Funding Period on the relate
Subsequent Transfer Date.
Subsequent Transfer Agreement: Each acknowledgment by the
Indenture Trustee pursuant to Section 2.10(a) of the Sale and Servicing
Agreement that Subsequent Mortgage Loans have been conveyed by the Sponsor.
Subsequent Transfer Date: The date specified in each
Subsequent Transfer Agreement, which shall be at least five days prior to the
related Payment Date.
Substitute Cut-Off Date: With respect to any Eligible
Substitute Mortgage Loan, the opening of business on the first day of the
calendar month in which such Eligible Substitute Mortgage Loan is conveyed to
the Trust.
Substitution Amounts: In connection with the delivery of any
Eligible Substitute Mortgage Loan, if the outstanding principal amount of such
Eligible Substitute Mortgage Loan as of the applicable Substitute Cut-Off Date
is less than the related Principal Balance of the Mortgage Loan being replaced
as of such Substitute Cut-Off Date, an amount equal to such difference together
with accrued and unpaid interest on such amount calculated at the Loan Rate net
of the Servicing Fee, if any, of the Mortgage Loan being replaced.
Telerate Screen Page 3750: The display designated as page 3750
on the Telerate Service (or such other page as may replace page 3750 on that
service for the purpose of displaying London interbank offered rates of major
banks).
Termination Date: The latest of (i) the termination of the
Policy and the return of the Policy to the Insurer for cancellation, (ii) the
date on which the Insurer shall have received payment and performance of all
Insurer Issuer Secured obligations and (iii) the date on which the Indenture
Trustee shall have received payment and performance of all Indenture Trustee
Issuer Secured Obligations.
Total Available Funds: The Pool I Total Available Funds or the
Pool II Total Available Funds.
Transfer Date: With respect to each Eligible Substitute
Mortgage Loan, the date on which such Eligible Substitute Mortgage Loan shall
have been transferred to the Trust.
Annex A-28
<PAGE>
Trust Agreement: The Trust Agreement, dated as of December 1,
1999, by and between the Sponsor and the Owner Trustee, as the same may be
amended and supplemented from time to time.
Trust Indenture Act or TIA: The Trust Indenture Act of 1939,
as amended and as in force on the date hereof, unless otherwise specifically
provided.
Trust Property: All property and proceeds conveyed pursuant to
Section 2.01 of the Sale and Servicing Agreement, and certain other rights under
that Agreement.
Trustee Fee: A fee which is separately agreed to between the
Servicer and the Indenture Trustee.
Trustee Fee Rate: The per annum rate at which the Trustee Fee
is calculated.
UCC: Unless the context otherwise requires, the Uniform
Commercial Code, as in effect in the relevant jurisdiction, as amended from time
to time.
Weighted Average Net Loan Rate: As to any Collection Period
and with respect to each Pool, the average of the daily Net Loan Rate for each
Mortgage Loan in such Pool for each day during the related Billing Cycle,
weighted on the basis of the daily average of the related Principal Balances for
each day in such Billing Cycle for each Mortgage Loan as determined by the
Servicer in accordance with the Servicer's normal servicing procedures.
Annex A-29
<PAGE>
EXHIBIT A
[Form of Note]
REGISTERED $193,275,000
No. A-1 CUSIP NO. 395385 AA 5
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any Note
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREENPOINT HOME EQUITY LOAN TRUST 1999-2
CLASS A-1 VARIABLE RATE ASSET BACKED NOTES
GreenPoint Home Equity Loan Trust 1999-2, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of One Hundred Ninety-three Million,
Two Hundred Seventy-five Thousand Dollars and No Cents ($193,275,000.00), such
amount payable on each Payment Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $193,275,000.00 and the
denominator of which is $193,275,000.00 by (ii) the aggregate amount, if any,
payable from the Collection Account in respect of principal on the Notes
pursuant to Section 8.6 of the Indenture; provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the Payment
Date in December 2025 (the "Final Scheduled Payment Date"). The Issuer will pay
interest on this Note at the rate per annum provided in the Indenture on each
Payment Date on the principal amount of this Note outstanding on the preceding
Payment Date (after giving effect to all payments of principal made on the
preceding Payment Date). Interest on this Note will accrue for each Payment Date
from the most recent Payment Date on which interest has been paid to but
excluding such Payment Date or, if no interest has yet been paid, from December
22, 1999. Interest will be computed on the basis of the actual number of days
elapsed in a 360-day year. Such principal of and interest on this Note shall be
paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to
A-1
<PAGE>
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Policy") issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-1 Notes on each
Payment Date, all as more fully set forth in the Indenture.
For purposes of federal income, state and local income and
franchise and any other income taxes, the Issuer will treat the Notes as
indebtedness of the Sponsor and hereby instructs the Indenture Trustee to treat
the Notes as indebtedness of the Sponsor for federal and state tax reporting
purposes. Each Noteholder by acceptance of a Note (and each owner of a
beneficial interest in a Note by acceptance of such beneficial interest) agrees
to treat the Notes for federal income, state and local income and franchise and
any other income taxes as indebtedness of the Sponsor.
Each Noteholder or Note Owner, by acceptance of this Note or,
in the case of a Note Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Sponsor, the Servicer, the Indenture
Trustee, or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any owner, beneficiary, agent,
officer, director or employee of the Sponsor, the Servicer, the Indenture
Trustee, or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Sponsor, the Servicer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Sponsor, the
Servicer, the Indenture Trustee, or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-1 Variable Rate Asset Backed Notes (herein
called the "Class A-1 Notes"), all issued under an Indenture dated as of
December 1, 1999 (such indenture, as supplemented or amended, is herein called
the "Indenture"), between the Issuer and Bank One, National Association, as
trustee (the "Indenture Trustee", which term includes any successor Indenture
Trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture
A-2
<PAGE>
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture. All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture, as so supplemented or amended.
The Class A-1 Notes and the Class A-2 Notes (together, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each
Payment Date in an amount described in the Indenture. "Payment Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing January 18, 2000. The term "Payment
Date," shall be deemed to include the Final Scheduled Payment Date.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Final Scheduled Payment Date
and the Redemption Date, if any, pursuant to Section 10.1 of the Indenture.
Notwithstanding the foregoing, on the date on which a Rapid Amortization Period
as described in Section 5.1(a) shall have occurred and be continuing and the
Indenture Trustee or the Holders representing more than 50% of the Outstanding
Amount of the Notes, with the prior written consent of the Insurer (so long as
there is no continuing default by the Insurer in the performance of its
obligations under the Policy) shall have the right among others to direct the
Indenture Trustee to sell or liquidate the Pool I Mortgage Loans as provided in
Section 12.1 of the Indenture and pay such amounts to the Class A-1 Notes. All
principal payments on the Class A-1 Notes shall be made pro rata to the Class
A-1 Noteholders entitled thereto. The Policy will cover any amounts by which
such remaining net proceeds are insufficient to pay the Class A-1 Principal
Balance, together with all accrued and unpaid interest thereon.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Holder hereof as of the Record Date preceding such Payment Date by notice mailed
prior to such Payment Date and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
A-3
<PAGE>
The Issuer shall pay interest on overdue installments of
interest at the Class A-1 Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-1 Notes may be
redeemed pursuant to Section 10.1 of the Indenture, in whole, but not in part,
at the option of the Sponsor (with the consent of the Insurer under certain
circumstances), on any Payment Date on or after the date on which the Class A-1
Note Principal Balance is less than or equal to 10% of the Original Class A-1
Note Principal Balance.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, (i)
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note Registrar
which requirements include membership or participation in Securities Transfer
Agents Medallion Program ("Stamp") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, Stamp, all in accordance with the Exchange Act, and (ii) accompanied by
such other documents as the Indenture Trustee may require, and thereupon one or
more new Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Sponsor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any owner, beneficiary, agent,
officer, director or employee of the Sponsor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Sponsor, the Servicer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Sponsor, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
the Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder will not at
any time institute against the Sponsor, or the Issuer or join in any institution
against the Sponsor, or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any United
A-4
<PAGE>
States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and the Insurer and any agent of
the Issuer, the Indenture Trustee or the Insurer may treat the Person in whose
name this Note (as of the day of determination or as of such other date as may
be specified in the Indenture) is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Indenture Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Insurer and of the
Holders of Notes representing a majority of the Outstanding Amount of all Notes
at the time Outstanding. Any such consent or waiver by the Holder of this Note
(or any one of more Predecessor Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder but with the consent of the Insurer.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Wilmington
Trust Company in its individual capacity, any owner of a beneficial interest in
the Issuer, nor any of their respective beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Issuer for the sole purposes of binding the interests of
the Issuer in the assets of the Issuer. The Holder of this Note by the
acceptance
A-5
<PAGE>
hereof agrees that except as expressly provided in the Indenture or
the Basic Documents in the case of a Rapid Amortization Event with respect to
the Class A-1 Notes under the Indenture, the Holder shall have no claim against
any of the foregoing for any deficiency, loss or claim therefrom; provided,
however, that nothing contained herein shall be taken to prevent recourse to,
and enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
A-6
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer.
Date: December 22, 1999 GREENPOINT HOME EQUITY LOAN TRUST 1999-2
By: Wilmington Trust Company, not in its
individual capacity but
solely as Owner Trustee
By: ____________________________________________
Name:
Title:
A-7
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
Date: December 22, 1999 BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Indenture Trustee,
By:____________________________________
Authorized Signatory
A-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
--------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:_______________________ __________________________________/1
Signature Guaranteed:
___________________________
1\NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
A-9
<PAGE>
EXHIBIT B
[Form of Note]
REGISTERED $52,370,000
No. A-2 CUSIP NO. 395385 AB 3
Unless this Note is presented by an authorized representative
of The Depository Trust Company, a New York corporation ("DTC"), to the Issuer
or its agent for registration of transfer, exchange or payment, and any Note
issued is registered in the name of Cede & Co. or in such other name as is
requested by an authorized representative of DTC (and any payment is made to
Cede & Co. or to such other entity as is requested by an authorized
representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner
hereof, Cede & Co., has an interest herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
GREENPOINT HOME EQUITY LOAN TRUST 1999-2
CLASS A-2 VARIABLE RATE ASSET BACKED NOTES
GreenPoint Home Equity Loan Trust 1999-2, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of Fifty-two Million, Three Hundred
Seventy Thousand Dollars and No Cents ($52,370,000.00), such amount payable on
each Payment Date in an amount equal to the result obtained by multiplying (i) a
fraction the numerator of which is $52,370,000.00 and the denominator of which
is $52,370,000.00 by (ii) the aggregate amount, if any, payable from the
Collection Account in respect of principal on the Notes pursuant to Section 8.6
of the Indenture; provided, however, that the entire unpaid principal amount of
this Note shall be due and payable on the Payment Date in December 2025 (the
"Final Scheduled Payment Date"). The Issuer will pay interest on this Note at
the rate per annum provided in the Indenture on each Payment Date on the
principal amount of this Note outstanding on the preceding Payment Date (after
giving effect to all payments of principal made on the preceding Payment Date).
Interest on this Note will accrue for each Payment Date from the most recent
Payment Date on which interest has been paid to but excluding such Payment Date
or, if no interest has yet been paid, from December 22, 1999. Interest will be
computed on the basis of the actual number of days elapsed in a 360-day year.
Such principal of and interest on this Note shall be paid in the manner
specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to
B-1
<PAGE>
interest due and payable on this Note as provided above and then to the unpaid
principal of this Note.
The Notes are entitled to the benefits of a financial guaranty
insurance policy (the "Policy") issued by Ambac Assurance Corporation (the
"Insurer"), pursuant to which the Insurer has unconditionally guaranteed
payments of the Insured Payments with respect to the Class A-2 Notes on each
Payment Date, all as more fully set forth in the Indenture.
For purposes of federal income, state and local income and
franchise and any other income taxes, the Issuer will treat the Notes as
indebtedness of the Sponsor and hereby instructs the Indenture Trustee to treat
the Notes as indebtedness of the Sponsor for federal and state tax reporting
purposes. Each Noteholder by acceptance of a Note (and each owner of a
beneficial interest in a Note by acceptance of such beneficial interest) agrees
to treat the Notes for federal income, state and local income and franchise and
any other income taxes as indebtedness of the Sponsor.
Each Noteholder or Note Owner, by acceptance of this Note or,
in the case of a Note Owner, a beneficial interest in a Note, covenants and
agrees that no recourse may be taken, directly or indirectly, with respect to
the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Sponsor, the Servicer, the Indenture
Trustee, or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any owner, beneficiary, agent,
officer, director or employee of the Sponsor, the Servicer, the Indenture
Trustee, or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Sponsor, the Servicer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Sponsor, the
Servicer, the Indenture Trustee, or the Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that the Indenture Trustee and the Owner Trustee have no such
obligations in their individual capacity) and except that any such owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution or failure to
pay any installment or call owing to such entity.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-2 Variable Rate Asset Backed Notes (herein
called the "Class A-2 Notes"), all issued under an Indenture dated as of
December 1, 1999 (such indenture, as supplemented or amended, is herein called
the "Indenture"), between the Issuer and Bank One, National Association, as
trustee (the "Indenture Trustee", which term includes any successor Indenture
Trustee under the Indenture), to which Indenture and all indentures supplemental
thereto reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture
B-2
<PAGE>
Trustee and the Holders of the Notes. The Notes are subject to all terms of the
Indenture. All terms used in this Note that are defined in the Indenture, as
supplemented or amended, shall have the meanings assigned to them in or pursuant
to the Indenture, as so supplemented or amended.
The Class A-1 Notes and the Class A-2 Notes (together, the
"Notes") are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each
Payment Date in an amount described in the Indenture. "Payment Date" means the
fifteenth day of each month, or, if any such date is not a Business Day, the
next succeeding Business Day, commencing January 18, 2000. The term "Payment
Date," shall be deemed to include the Final Scheduled Payment Date.
As described above, the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the Final Scheduled Payment Date
and the Redemption Date, if any, pursuant to Section 10.1 of the Indenture.
Notwithstanding the foregoing, on the date on which a Rapid Amortization Period
as described in Section 5.1(a) shall have occurred and be continuing and the
Indenture Trustee or the Holders representing more than 50% of the Outstanding
Amount of the Notes, with the prior written consent of the Insurer (so long as
there is no continuing default by the Insurer in the performance of its
obligations under the Policy) shall have the right among others to direct the
Indenture Trustee to sell or liquidate the Pool II Mortgage Loans as provided in
Section 12.1 of the Indenture and pay such amounts to the Class A-2 Notes. All
principal payments on the Class A-2 Notes shall be made pro rata to the Class
A-2 Noteholders entitled thereto. The Policy will cover any amounts by which
such remaining net proceeds are insufficient to pay the Class A-2 Principal
Balance, together with all accrued and unpaid interest thereon.
Payments of interest on this Note due and payable on each
Payment Date, together with the installment of principal, if any, to the extent
not in full payment of this Note, shall be made by check mailed to the Person
whose name appears as the Holder of this Note (or one or more Predecessor Notes)
on the Note Register as of the close of business on each Record Date, except
that with respect to Notes registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee to be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Such checks shall be mailed to the Person
entitled thereto at the address of such Person as it appears on the Note
Register as of the applicable Record Date without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Payment Date shall be binding upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in
lieu hereof, whether or not noted hereon. If funds are expected to be available,
as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in
the name of and on behalf of the Issuer, will notify the Person who was the
Holder hereof as of the Record Date preceding such Payment Date by notice mailed
prior to such Payment Date and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
B-3
<PAGE>
The Issuer shall pay interest on overdue installments of
interest at the Class A-2 Interest Rate to the extent lawful.
As provided in the Indenture, the Class A-2 Notes may be
redeemed pursuant to Section 10.1 of the Indenture, in whole, but not in part,
at the option of the Sponsor (with the consent of the Insurer under certain
circumstances), on any Payment Date on or after the date on which the Class A-2
Note Principal Balance is less than or equal to 10% of the Original Class A-2
Note Principal Balance.
As provided in the Indenture and subject to certain
limitations set forth therein, the transfer of this Note may be registered on
the Note Register upon surrender of this Note for registration of transfer at
the office or agency designated by the Issuer pursuant to the Indenture, (i)
duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note Registrar
which requirements include membership or participation in Securities Transfer
Agents Medallion Program ("Stamp") or such other "signature guarantee program"
as may be determined by the Note Registrar in addition to, or in substitution
for, Stamp, all in accordance with the Exchange Act, and (ii) accompanied by
such other documents as the Indenture Trustee may require, and thereupon one or
more new Notes of authorized denominations and in the same aggregate principal
amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this
Note, but the transferor may be required to pay a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Sponsor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, (ii) any owner of a
beneficial interest in the Issuer or (iii) any owner, beneficiary, agent,
officer, director or employee of the Sponsor, the Servicer, the Indenture
Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, the Sponsor, the Servicer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Sponsor, the
Servicer, the Indenture Trustee or the Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
the Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such owner or beneficiary shall be
fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note covenants and agrees
that by accepting the benefits of the Indenture that such Noteholder will not at
any time institute against the Sponsor, or the Issuer or join in any institution
against the Sponsor, or the Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings, under
any United
B-4
<PAGE>
States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, the Indenture or the Basic Documents.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and the Insurer and any agent of
the Issuer, the Indenture Trustee or the Insurer may treat the Person in whose
name this Note (as of the day of determination or as of such other date as may
be specified in the Indenture) is registered as the owner hereof for all
purposes, whether or not this Note be overdue, and neither the Issuer, the
Indenture Trustee nor any such agent shall be affected by notice to the
contrary.
The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and
obligations of the Issuer and the rights of the Holders of the Notes under the
Indenture at any time by the Issuer with the consent of the Insurer and of the
Holders of Notes representing a majority of the Outstanding Amount of all Notes
at the time Outstanding. Any such consent or waiver by the Holder of this Note
(or any one of more Predecessor Notes) shall be conclusive and binding upon such
Holder and upon all future Holders of this Note and of any Note issued upon the
registration of transfer hereof or in exchange hereof or in lieu hereof whether
or not notation of such consent or waiver is made upon this Note. The Indenture
also permits the Indenture Trustee to amend or waive certain terms and
conditions set forth in the Indenture without the consent of Holders of the
Notes issued thereunder but with the consent of the Insurer.
The term "Issuer" as used in this Note includes any successor
to the Issuer under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be construed in accordance
with the laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place, and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Indenture or the Basic Documents, neither Wilmington
Trust Company in its individual capacity, any owner of a beneficial interest in
the Issuer, nor any of their respective beneficiaries, agents, officers,
directors, employees or successors or assigns shall be personally liable for,
nor shall recourse be had to any of them for, the payment of principal of or
interest on, or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in this Note or the Indenture, it
being expressly understood that said covenants, obligations and indemnifications
have been made by the Issuer for the sole purposes of binding the interests of
the Issuer in the assets of the Issuer. The Holder of this Note by the
acceptance
B-5
<PAGE>
hereof agrees that except as expressly provided in the Indenture or the Basic
Documents in the case of a Rapid Amortization Event with respect to the Class
A-2 Notes under the Indenture, the Holder shall have no claim against any of the
foregoing for any deficiency, loss or claim therefrom; provided, however, that
nothing contained herein shall be taken to prevent recourse to, and enforcement
against, the assets of the Issuer for any and all liabilities, obligations and
undertakings contained in the Indenture or in this Note.
B-6
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to
be signed, manually or in facsimile, by its Authorized Officer.
Date: December 22, 1999 GREENPOINT HOME EQUITY LOAN TRUST 1999-2
By: Wilmington Trust Company, not in its
individual capacity but solely as
Owner Trustee
By:__________________________________________
Name:
Title:
B-7
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in
the within-mentioned Indenture.
Date: December 22, 1999 BANK ONE, NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Indenture Trustee,
By:__________________________________________
Authorized Signatory
B-8
<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
--------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints, attorney, to transfer said Note on the books kept for registration
thereof, with full power of substitution in the premises.
Dated:_________________________ _____________________________/1
Signature Guaranteed:
___________________________________
1\NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever.
<PAGE>
EXHIBIT 4.4
EXECUTION COPY
================================================================================
MORTGAGE LOAN PURCHASE AGREEMENT
Between
GREENPOINT MORTGAGE FUNDING, INC.,
as Seller
and
GREENPOINT MORTGAGE SECURITIES INC.,
as Purchaser
Dated as of December 1, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C>
Page
ARTICLE I Definitions.............................................................................................1
ARTICLE II Procedures for Purchases of Mortgage Loans; Conditions Precedent; Settlements..........................1
Section 2.01. Purchase and Sale...........................................................................1
Section 2.02. Delivery of Documents; Purchase of Initial Mortgage Loans...................................2
Section 2.03. Delivery of Documents; Purchases of Subsequent Mortgage Loans...............................2
Section 2.04. Purchase Requests...........................................................................3
Section 2.05. Survival of Representations.................................................................3
Section 2.06. Proceeds of Mortgage Loans..................................................................3
Section 2.07. Defective Mortgage Loans....................................................................3
ARTICLE III Intent of Parties; Security Interest..................................................................4
Section 3.01. Intent of Parties; Security Interest........................................................4
ARTICLE IV Representations and Warranties.........................................................................4
Section 4.01. Representations and Warranties of Seller....................................................4
Section 4.02. Representations and Warranties Regarding Mortgage Loans.....................................6
Section 4.03. Representations and Warranties of Purchaser................................................12
Section 4.04. Remedies for Breach of Representations and Warranties; Repurchase
Obligation.................................................................................13
ARTICLE V Covenants and Warranties of Seller.....................................................................14
Section 5.01. Affirmative Covenants......................................................................14
Section 5.02. Negative Covenants.........................................................................15
ARTICLE VI Sale of Mortgage Loans from the Purchaser to the Trust................................................16
Section 6.01. Sale and Servicing Agreement...............................................................16
ARTICLE VII Seller's Servicing Obligations.......................................................................17
Section 7.01. Seller's Servicing Obligations.............................................................17
ARTICLE VIII Fees and Expenses...................................................................................18
ARTICLE IX Termination; Additional Remedies......................................................................18
ARTICLE X Payment of Purchase Price..............................................................................18
Section 10.01. Purchase Price Payments....................................................................18
Section 10.02. The Purchaser Note.........................................................................19
ARTICLE XI Confidentiality.......................................................................................20
ARTICLE XII Term.................................................................................................20
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE XIII Exclusive Benefit of Parties; Assignment............................................................20
ARTICLE XIV Amendment; Waivers...................................................................................20
ARTICLE XV Execution in Counterparts.............................................................................21
ARTICLE XVI Effect of Invalidity of Provisions...................................................................21
ARTICLE XVII Governing Law.......................................................................................21
ARTICLE XVIII Notices............................................................................................21
ARTICLE XIX Entire Agreement.....................................................................................22
ARTICLE XX Indemnities...........................................................................................22
ARTICLE XXI RESPA Obligations....................................................................................23
ARTICLE XXII Survival............................................................................................23
ARTICLE XXIII Right of Set-off...................................................................................23
ARTICLE XXIV Consent to Service..................................................................................24
ARTICLE XXV Submission to Jurisdiction; Waiver of Trial by Jury..................................................24
ARTICLE XXVI Construction........................................................................................24
ARTICLE XXVII Further Agreements.................................................................................25
EXHIBIT A Form of Non-Negotiable GreenPoint Mortgage Securities Inc.
Promissory Note
SCHEDULE I: Mortgage Loan Schedule
</TABLE>
ii
<PAGE>
MORTGAGE LOAN PURCHASE AGREEMENT ("Agreement") dated as of
December 1, 1999 between GreenPoint Mortgage Funding, Inc., a New York
corporation ("Seller"), and GreenPoint Mortgage Securities Inc., a Delaware
corporation ("Purchaser").
WHEREAS, Seller desires to sell from time to time to Purchaser
the Initial Mortgage Loans and Subsequent Mortgage Loans (each as hereinafter
defined), and Purchaser desires to purchase such Initial Mortgage Loans and
Subsequent Mortgage Loans in accordance with the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, the parties, in consideration of good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and intending to be legally bound, hereby agree as follows:
ARTICLE I
Definitions
All capitalized terms used in this Agreement and not otherwise
defined herein, shall have the meanings assigned thereto in Annex A to the
Indenture dated as of December 1, 1999, between the Issuer and the Indenture
Trustee, as the same may be amended and supplemented from time to time.
ARTICLE II
Procedures for Purchases of Mortgage Loans; Conditions
Precedent; Settlements
Section 2.01. Purchase and Sale. (a) On the Closing Date in
consideration for the Purchase Price the Seller hereby sells, transfers,
assigns, sets over and otherwise conveys to the Purchaser, without recourse, all
of its right, title and interest in, to and under, whether now existing or
hereafter created, (i) each Initial Mortgage Loan, including its Principal
Balance (and any Additional Balances) and all collections in respect thereof
received on or after the Initial Cut-Off Date; (ii) property that secured a
Mortgage Loan that is acquired by foreclosure or deed in lieu of foreclosure;
(iii) the Seller's rights under the hazard insurance policies; (iv) any and all
Subsequent Mortgage Loans (including any Additional Balances related thereto)
and (v) all proceeds with respect to the foregoing.
(b) Each such purchase with respect to the Subsequent Mortgage
Loans shall be initiated by the Seller pursuant to the delivery to the Purchaser
of a Purchase Request in the manner set forth in Section 2.04.
(c) To the extent that the fair market value of any Additional
Balance or Subsequent Mortgage Loan sold by the Seller to the Purchaser is
greater than the cash consideration paid by the Purchaser for such Additional
Balance or Subsequent Mortgage Loan, the difference between such fair market
value and the amount of such cash consideration shall be deemed to be a capital
contribution made to the Seller by the Purchaser.
<PAGE>
Section 2.02. Delivery of Documents; Purchase of Initial
Mortgage Loans. Prior to the purchase of the Initial Mortgage Loans:
(a) Seller shall have delivered to the Purchaser or any agent
appointed by the Purchaser the Mortgage File for each of the Mortgage Loans.
(b) Purchaser shall have received a Mortgage Loan Schedule
pertaining to the related Mortgage Loans.
(c) Purchaser shall have received copies of the resolutions of
the Board of Directors of Seller, certified by its respective Secretary,
approving this Agreement.
(d) Purchaser shall have received the Certificate of
Incorporation of Seller certified by the Secretary of State of the State of New
York.
(e) Purchaser shall have received a certificate of the
Secretary or Assistant Secretary of Seller certifying (i) the names and
signatures of the officers authorized on its behalf to execute this Agreement,
and any other documents to be delivered by it hereunder and (ii) a copy of
Seller's By-laws.
(f) Purchaser shall have received an opinion of counsel to
Seller as to the due authorization, execution and delivery by the Seller of this
Agreement and as to the validity and enforceability of the transfers
contemplated hereunder and addressing such other matters as the Purchaser may
reasonably request.
(g) Seller shall have instructed the applicable debtor,
trustee, paying agent, authenticating agent, transfer agent, registrar,
predecessor in interest, owner (if the Mortgage Loans are in the form of a
security agreement), or servicer, if any, in respect of the related Mortgage
Loans to reflect on their books and records the transfer of such Mortgage Loans
to Purchaser, as owner or secured party (if the Mortgage Loans are in the form
of a security agreement).
(h) Purchaser shall have received the most recent available
standard servicing or lien reports in summary form, if any, with respect to all
of the mortgages in Seller's portfolio similar to the Mortgage Loans.
(i) The Purchaser shall be permitted to perform its standard
loan review of each Mortgage Loan to be purchased.
(j) UCC-1 financing statements duly executed by Seller as
debtor shall have been filed in California naming the Purchaser as secured party
and the Indenture Trustee on behalf of the Trust as assignee.
Section 2.03. Delivery of Documents; Purchases of Subsequent
Mortgage Loans. Prior to any purchase of Subsequent Mortgage Loans after the
purchase of Initial Mortgage Loans, the actions, conditions and deliveries
specified in Section 2.02 shall have been taken or made, as the case may be with
respect to the Subsequent Mortgage Loans.
2
<PAGE>
Section 2.04. Purchase Requests. Seller shall deliver to
Purchaser a Purchase Request at least three Business Days prior to the proposed
Purchase Date for any Purchase of Subsequent Mortgage Loans (unless otherwise
agreed by the parties). Purchaser shall indicate its acceptance or declination
of each Purchase Request by completing the appropriate section of the Purchase
Request and returning the copy thereof to Seller; provided, however, that
Purchaser hereby agrees to accept each Purchase Request if all of the conditions
to such Purchase provided for in this Agreement (including, without limitation,
Section 2.02 hereof and the conditions with respect to the purchase of
Subsequent Mortgage Loans) have been satisfied.
With respect to all Purchase Requests, if Purchaser does not
send a copy of a completed Purchase Request to Seller within at least three
Business Days prior to the proposed Purchase Date (five Business Days, if the
related Purchase Request was received by Purchaser at least two calendar weeks
prior to the proposed Purchase Date), Purchaser shall be deemed to have accepted
such Purchase Request. Each Purchase Request accepted by Purchaser shall be
irrevocable and binding on Purchaser and Seller. Seller shall indemnify
Purchaser and hold it harmless against any Losses incurred by Purchaser as a
result of any failure by Seller to timely deliver the Subsequent Mortgage Loans
subject to such Purchase. On the applicable Purchase Date, the Purchaser shall
pay Seller the Purchase Price for the related Subsequent Mortgage Loans against
receipt of the documents required to be delivered by Seller pursuant to Section
2.03.
Section 2.05. Survival of Representations. The terms and
conditions of the purchase of each Mortgage Loan shall be as set forth in this
Agreement. Seller will be deemed on the Closing Date and on each Purchase Date
to have made to Purchaser the representations and warranties set forth in
Article IV hereof and such representations and warranties of Seller shall be
true and correct on and as of the Closing Date and on and as of such Purchase
Date. Each Purchase Request made by Seller shall be deemed to be a restatement
of each of the covenants of Seller made pursuant to Article V of this Agreement.
In addition, Seller shall reaffirm the representations and warranties contained
in Article IV on the date of disposition of the Mortgage Loans by the Purchaser
pursuant to the Sale and Servicing Agreement.
Section 2.06. Proceeds of Mortgage Loans. The transfer and
sale hereby of all of the Seller's right, title and interest in and to each
Mortgage Loan shall include all proceeds, products and profits derived
therefrom, including, without limitation, all scheduled payments of principal of
and interest on such Mortgage Loans and other amounts due or payable or to
become due or payable in respect thereof and proceeds thereof, including,
without limitation, all moneys, goods and other tangible or intangible property
received upon the liquidation or sale thereof.
Section 2.07. Defective Mortgage Loans. If any Mortgage Loan
is re-transferred to the Purchaser pursuant to Section 2.03 of the Sale and
Servicing Agreement, the Seller shall, at the Purchaser's option, either (a)
repurchase such Mortgage Loan at the Repurchase Price, or (b) provide an
Eligible Substitute Mortgage Loan if the Seller has any such loans available for
sale at the time, subject to the terms and conditions of the Sale and Servicing
Agreement.
3
<PAGE>
ARTICLE III
Intent of Parties; Security Interest
Section 3.01. Intent of Parties; Security Interest. Purchaser
and Seller confirm that the transactions contemplated herein are intended as
purchases and sales rather than as loan transactions. In the event, for any
reason, and solely in such event, any transaction hereunder is construed by any
court or regulatory authority as a loan or other purchase and sale of the
related Mortgage Loans, Seller shall be deemed to have hereby pledged to
Purchaser as security for the performance by Seller of all of its obligations
from time to time arising hereunder and under any and all Purchases effected
pursuant thereto, and shall be deemed to have granted to Purchaser a security
interest in, the related Mortgage Loans and all distributions in respect
thereof, and the proceeds of any and all of the foregoing (collectively, the
"Collateral"). In furtherance of the foregoing, (i) this Agreement shall
constitute a security agreement, (ii) Purchaser shall have all of the rights of
a secured party with respect to the Collateral pursuant to applicable law and
(iii) Seller shall execute all documents, including, but not limited to,
financing statements under the Uniform Commercial Code as in effect in any
applicable jurisdictions, as the Purchaser may reasonably require to effectively
perfect and evidence Purchaser's first priority security interest in the
Collateral. Seller also covenants not to pledge, assign or grant any security
interest to any other party in any Mortgage Loan sold to Purchaser.
ARTICLE IV
Representations and Warranties
Section 4.01. Representations and Warranties of Seller. The
Seller represents, warrants and covenants to the Purchaser as of the Closing
Date and, with respect to the Subsequent Mortgage Loans, as of each related
Subsequent Transfer Date, that:
(i) the Seller is duly organized, validly existing and in good
standing under the laws of the State of New York and is duly authorized and
qualified to transact any and all business contemplated by this Agreement
to be conducted by the Seller in any state in which a Mortgaged Property is
located to the extent necessary to ensure the enforceability of each
Mortgage Loan and the servicing of the Mortgage Loan in accordance with the
terms of this Agreement;
(ii) the Seller has the full corporate power and authority to
service each Mortgage Loan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Agreement
and the execution, delivery and performance of this Agreement by the Seller
has been duly authorized by all necessary corporate action on the part of
the Seller; and this Agreement, assuming the due authorization, execution
and delivery thereof by the Purchaser, constitutes a legal, valid and
binding obligation of the Seller, enforceable against the Seller in
accordance with its respective terms, except to the extent that (a) the
enforceability thereof may be limited by federal or state bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of
4
<PAGE>
equitable relief may be subject to the equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought;
(iii) the execution and delivery of this Agreement by the
Seller, the servicing of the Mortgage Loans by the Seller hereunder, the
consummation by the Seller of the transactions herein contemplated, and the
fulfillment by the Seller of or compliance by the Seller with the terms
hereof will not (A) result in a breach of any term or provision of the
charter or by-laws of the Seller or (B) conflict with, result in a breach,
violation or acceleration of, or result in a default under, the terms of
any other material agreement or instrument to which the Seller is a party
or by which it may be bound, or any statute, order or regulation applicable
to the Seller of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Seller, which breach,
violation, default or non-compliance would have a material adverse effect
on (a) the business, operations, financial condition, properties or assets
of the Seller taken as a whole or (b) the ability of the Seller to perform
its obligations under this Agreement; and the Seller is not a party to,
bound by, or in breach or violation of any material indenture or other
material agreement or instrument, or subject to or in violation of any
statute, order or regulation of any court, regulatory body, administrative
agency or governmental body having jurisdiction over it, which materially
and adversely affects or, to the Seller's knowledge, would in the future
reasonably be expected to materially and adversely affect, (x) the ability
of the Seller to perform its obligations under this Agreement or (y) the
business, operations, financial condition, properties or assets of the
Seller taken as a whole;
(iv) the Seller is, and currently intends to remain, in good
standing and qualified to do business in each jurisdiction where failure to
be so qualified or licensed would have a material adverse effect on (a) the
business, operations, financial condition, properties or assets of the
Seller taken as a whole or (b) the enforceability of any Mortgage Loan or
the servicing of the Mortgage Loans in accordance with the terms of this
Agreement;
(v) there is no litigation pending or, to the Seller's actual
knowledge, overtly threatened against the Seller that would materially and
adversely affect the execution, delivery or enforceability of this
Agreement or the ability of the Seller to service the Mortgage Loans or for
the Seller to perform any of its other obligations hereunder in accordance
with the terms hereof;
(vi) no consent, approval, authorization or order of any court
or governmental agency or body is required for the execution, delivery and
performance by the Seller of, or compliance by the Seller with, this
Agreement or the consummation of the transactions contemplated hereby
(except for such consents, approvals, authorizations, or orders to be
obtained in connection with each Purchase Date with respect to future
transactions to be consummated hereunder), or if any such consent,
approval, authorization or order not relating to a future transaction is
required, the Seller has obtained the same; and
(vii) the Seller has caused to be performed any and all acts
required to preserve the rights and remedies of the Purchaser in any
insurance policies of the Seller or a mortgagee applicable to the Mortgage
Loans sold by the Seller.
5
<PAGE>
Section 4.02. Representations and Warranties Regarding
Mortgage Loans. (a) Seller represents and warrants to Purchaser as of the
Closing Date with respect to each Initial Mortgage Loan, and, as of the related
Subsequent Transfer Date, with respect to each Subsequent Mortgage Loan, as
follows:
(i) As of the Closing Date with respect to the Initial
Mortgage Loans and as of the related Transfer Date with respect to the
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans and,
with respect to any HELOC Mortgage Loan, as of the date any Additional
Balance is created, the information set forth in the Mortgage Loan Schedule
for such Mortgage Loans is true and correct in all material respects;
(ii) Each Mortgage Loan is being serviced by the Servicer or a
Person controlling, controlled by or under common control with the Servicer
and qualified to service mortgage loans;
(iii) The applicable Cut-Off Date Principal Balance has not
been assigned or pledged, and the Sponsor is the sole owner and holder of
such Cut-Off Date Principal Balance free and clear of any and all liens,
claims, encumbrances, participation interests, equities, pledges, charges
or security interests of any nature, and has full right and authority,
under all governmental and regulatory bodies having jurisdiction over the
ownership of the applicable Mortgage Loans, to sell, assign or transfer the
same pursuant to this Agreement;
(iv) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans, the
Mortgage Loans have not been assigned or pledged, and the Sponsor is the
sole owner and holder of such Mortgage Loans free and clear of any and all
liens, claims, encumbrances, participation interests, equities, pledges,
charges or security interests of any nature, and has full right and
authority, under all governmental and regulatory bodies having jurisdiction
over the ownership of the applicable Mortgage Loans, to sell and assign the
same pursuant to this Agreement;
(v) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans, the
related Mortgage is a valid and subsisting first or second lien, as set
forth on the Mortgage Loan Schedule with respect to each related Mortgaged
Property, and as of the applicable Cut-Off Date the related Mortgaged
Property is free and clear of all encumbrances and liens having priority
over the first or second lien, as applicable, of such Mortgage except for
liens for (i) real estate taxes and special assessments not yet delinquent;
(ii) any first mortgage loan secured by such Mortgaged Property and
specified on the Mortgage Loan Schedule; (iii) covenants, conditions and
restrictions, rights of way, easements and other matters of public record
as of the date of recording that are acceptable to mortgage lending
institutions generally; and (iv) other matters to which like properties are
commonly subject which do not materially interfere with the benefits of the
security intended to be provided by such Mortgage;
(vi) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible
6
<PAGE>
Substitute Mortgage Loans, there is no valid offset, defense or
counterclaim of any obligor under any Loan Agreement or Mortgage;
(vii) To the best knowledge of the Sponsor, as of the Closing
Date with respect to the Initial Mortgage Loans and the applicable Transfer
Date with respect to any Subsequent Mortgage Loans and any Eligible
Substitute Mortgage Loans, there is no delinquent recording or other tax or
fee or assessment lien against any related Mortgaged Property;
(viii) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans, there
is no proceeding pending or, to the best knowledge of the Sponsor,
threatened for the total or partial condemnation of the related Mortgaged
Property, and such property is free of material damage;
(ix) To the best knowledge of the Sponsor, as of the Closing
Date with respect to the Initial Mortgage Loans and the applicable Transfer
Date with respect to any Subsequent Mortgage Loans and any Eligible
Substitute Mortgage Loans, there are no mechanics' or similar liens or
claims which have been filed for work, labor or material affecting the
related Mortgaged Property which are, or may be, liens prior or equal to
the lien of the related Mortgage, except liens which are fully insured
against by the title insurance policy referred to in clause (xiv);
(x) No Minimum Monthly Payment is more than 89 days delinquent
(measured on a contractual basis).
(xi) As of the Closing Date with respect to the Initial
Mortgage Loans and as of the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans, for
each Mortgage Loan, the related Mortgage File contains each of the
documents and instruments specified to be included therein;
(xii) The related Loan Agreement and the related Mortgage at
origination complied in all material respects with applicable state and
federal laws, including, without limitation, usury, truth-in-lending, real
estate settlement procedures, consumer credit protection, equal credit
opportunity or disclosure laws applicable to the Mortgage Loans;
(xiii) On the Closing Date with respect to the Initial
Mortgage Loans and, to the extent not already included in such filing, on
the applicable Transfer Date with respect to any Subsequent Mortgage Loans
and any Eligible Substitute Mortgage Loans, the Sponsor has filed UCC-1
financing statements with respect to such Mortgage Loans;
(xiv) Either a lender's title insurance policy or binder was
issued on the date of origination of the Mortgage Loans and each such
policy is valid and remains in full force and effect, or a title search or
guaranty of title customary in the relevant jurisdiction was obtained with
respect to a Mortgage Loans as to which no title insurance policy or binder
was issued;
(xv) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible
7
<PAGE>
Substitute Mortgage Loans, none of the Mortgaged Properties is a mobile
home or a manufactured housing unit;
(xvi) As of the Initial Cut-Off Date for the Initial Mortgage
Loans no more than (a) 0.67% of the Initial Pool I Mortgage Loans (by
Initial Cut-Off Date Pool I Balance), or (b) 3.14% of the Initial Pool II
Mortgage Loans (by Initial Cut-Off Date Pool II Balance) are secured by
Mortgaged Properties located in one United States postal zip code;
(xvii) The Combined Loan-to-Value Ratio for each Initial Pool
I Mortgage Loan was not in excess of 100% and the Combined Loan-to-Value
Ratio for each Initial Pool II Mortgage Loan was not in excess of 100%;
(xviii) Each Pool I Mortgage Loan substantially conforms to
certain loan origination standards with respect to loan balances as of the
date of origination set forth by the Federal National Mortgage Association.
(xix) No selection procedure reasonably believed by the
Sponsor to be adverse to the interests of the Noteholders or the Insurer
was utilized in selecting the Mortgage Loans;
(xx) The Sponsor has not transferred the Mortgage Loans to the
Trust with any intent to hinder, delay or defraud any of its creditors;
(xxi) The Minimum Monthly Payment with respect to any Mortgage
Loan is not less than the interest accrued at the applicable Loan Rate on
the average daily Principal Balance during the interest period relating to
the date on which such Minimum Monthly Payment is due;
(xxii) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans, each
Loan Agreement and each Mortgage Loan is an enforceable obligation of the
related Mortgagor, except as the enforceability thereof may be limited by
the bankruptcy, insolvency or similar laws affecting creditors' rights
generally;
(xxiii) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans, there
has been no default of any senior mortgage loan related to a Mortgaged
Property that has not been cured by a party other than the Servicer;
(xxiv) The terms of each Mortgage Note and each Mortgage have
not been impaired, altered or modified in any respect, except by a written
instrument which (if such instrument is secured by real property) has been
recorded, if necessary, to protect the interest of the Noteholders and
which has been delivered to the Indenture Trustee. The substance of any
such alteration or modification is reflected on the related Mortgage Loan
Schedule and has been approved by the primary mortgage guaranty insurer, if
any;
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(xxv) The definition of "prime rate" in each Credit Line
Agreement relating to a HELOC Mortgage Loan does not differ materially from
the definition in the form of Credit Line Agreement in Exhibit D of the
Sale and Servicing Agreement;
(xxvi) The weighted average remaining term to maturity of the
Initial Pool I Mortgage Loans on a contractual basis as of the related
Initial Cut-Off Date is approximately 207 months and for the Initial Pool
II Mortgage Loans is approximately 209 months. On each date that the Loan
Rates relating to Initial HELOC Mortgage Loans have been adjusted, interest
rate adjustments on the Initial HELOC Mortgage Loans were made in
compliance with the related Mortgages and Credit Line Agreement and
applicable law. Over the term of each Initial HELOC Mortgage Loan, the Loan
Rate may not exceed the related Loan Rate Cap, if any. With respect to the
Initial Pool I HELOC Mortgage Loans, the weighted average Loan Rate Cap is
approximately 18.001%. With respect to the Initial Pool II HELOC Mortgage
Loans, the weighted average Loan Rate Cap is approximately 18.000%. With
respect to the Initial Pool I HELOC Mortgage Loans, the margins range
between 0.00% and 6.25% and the weighted average margin is approximately
3.23% as of the related Initial Cut-Off Date. With respect to the Initial
Pool II HELOC Mortgage Loans, the margins range between 0.00% and 6.00% and
the weighted average margin is approximately 3.00% as of the related
Initial Cut-Off Date. The Loan Rates on the Initial Pool I Mortgage Loans
range between 5.625% and 15.500%, the Loan Rates on the Initial Pool II
Mortgage Loans range between 5.875% and 14.500% and the weighted average
Loan Rate is approximately 7.084% for Pool I and 6.451% for Pool II;
(xxvii) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible Substitute Mortgage Loans, each
Mortgaged Property consists of a single parcel of real property with a
one-to-four unit single family residence erected thereon, or an individual
condominium unit, planned unit development unit or townhouse;
(xxviii) No more than 30.73% (by Initial Pool I Balance) of
the Initial Pool I Mortgage Loans are secured by real property improved by
individual condominium units, planned development units or two-to-four
family residences erected thereon, and approximately 69.27% (by Initial
Pool I Balance) of the Initial Pool I Mortgage Loans are secured by real
property with a one-family residence erected thereon;
No more than 21.17% (by Initial Pool II Balance) of the
Initial Pool II Mortgage Loans are secured by real property improved by
individual condominium units, planned development units or two-to-four
family residences erected thereon, and approximately 78.83% (by Initial
Pool II Balance) of the Initial Pool II Mortgage Loans are secured by real
property with a one-family residence erected thereon;
(xxix) Each Mortgage Note evidencing a Closed End Mortgage
Loan is comprised of one original promissory note, and each such promissory
note constitutes an "instrument" for purposes of Section 9-105(1)(i) of the
UCC;
(xxx) The Credit Limits on the Initial Pool I HELOC Mortgage
Loans range between $10,000 and $500,000 with an average of approximately
$52,380. The Credit
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Limits on the Initial Pool II HELOC Mortgage Loans range between $15,000
and $500,000 with an average of approximately $127,774. The Principal
Balances on the Initial Pool I HELOC Mortgage Loans range between $0 and
$351,688 with an average of approximately $37,582. The Principal Balances
on the Initial Pool II HELOC Mortgage Loans range between $0 and $500,000
with an average of approximately $110,214. The Principal Balances on the
Initial Pool I Closed End Mortgage Loans range between $10,000 and $112,500
with an average of approximately $37,791. The average Credit Limit
Utilization Rate (weighted by credit line) of the Initial Pool I HELOC
Mortgage Loans is approximately 88.93% and of the Initial Pool II HELOC
Mortgage Loans is approximately 93.64%;
(xxxi) 100% of the Mortgage Loans are second liens, and either
(A) no consent for each Mortgage Loan was required by the holder of the
related senior lien prior to the making of such Mortgage Loan or (B) such
consent has been obtained and is contained in the related Mortgage File;
(xxxii) This Agreement constitutes a valid transfer and
assignment to the Trust of all right, title and interest of the Sponsor in
and to the Cut-Off Date Principal Balances with respect to the applicable
Mortgage Loans, all monies due or to become due with respect thereto and
all proceeds of such Cut-Off Date Principal Balances with respect to the
Mortgage Loans and such funds as are from time to time deposited in the
Collection Account (excluding any investment earnings thereon) and all
other property specified in the definition of "Trust" as being part of the
corpus of the Trust conveyed to the Trust, and upon payment for the
Additional Balances, will constitute a valid transfer and assignment to the
Indenture Trustee of all right, title and interest of the Sponsor in and to
the Additional Balances, all monies due or to become due with respect
thereto, and all proceeds of such Additional Balances and all other
property specified in the definition of "Trust" relating to the Additional
Balances;
(xxxiii) No Mortgagor is insolvent or bankrupt as of the
Closing Date with respect to the Initial Mortgage Loans and as of the
applicable Transfer Date with respect to any Subsequent Mortgage Loans and
any Eligible Substitute Mortgage Loans;
(xxxiv) The proceeds of each Closed End Mortgage Loan have
been fully disbursed, and there is no obligation on the part of the
mortgagee to make future advances thereunder. Any and all requirements as
to completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with. All
costs, fees and expenses incurred in making or closing or recording such
Closed End Mortgage Loans were paid;
(xxxv) Each Mortgage contains customary and enforceable
provisions which render the rights and remedies of the holder thereof
adequate for the realization against the related Mortgaged Property of the
benefits of the security, including (A) in the case of a Mortgage
designated as a deed of trust, by Indenture Trustee's sale and (B)
otherwise by judicial foreclosure;
(xxxvi) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loans and any Eligible
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Substitute Mortgage Loan, there is no default, breach, violation or event
of acceleration existing under any Mortgage or the related Mortgage Note
and no event which, with the passage of time or with notice and the
expiration of any grace or cure period, would constitute a default, breach,
violation or event of acceleration; and the Sponsor has not waived any
default, breach, violation or event of acceleration;
(xxxvii) To the best knowledge of the Sponsor, all parties to
the Mortgage Note and the Mortgage had legal capacity to execute the
Mortgage Note and the Mortgage and each Mortgage Note and Mortgage have
been duly and properly executed by such parties;
(xxxviii) As of the Initial Cut-Off Date, no more than 0.32%
of the Principal Balance of the Initial Pool I Mortgage Loans nor more than
0.00% of the Principal Balance of the Initial Pool II Mortgage Loans
represents Mortgage Loans with respect to which the related Mortgagor had a
Credit Score of 600 or less at the time of origination or whose Credit
Score was unavailable;
(xxxix) As of the Closing Date with respect to the Initial
Mortgage Loans and the applicable Transfer Date with respect to any
Subsequent Mortgage Loan and any Eligible Substitute Mortgage Loan, no
Mortgagor has been released, in whole or in part, except in connection with
an assumption agreement which has been approved by the applicable title
insurer (to the extent required by such title insurer) and which is part of
the Mortgage File delivered to the Indenture Trustee;
(xl) At the time of origination of each Mortgage Loan, the
related prior lien was not more than 30 days delinquent;
(xli) All required inspections, licenses and certificates with
respect to the use and occupancy of all occupied portions of all property
securing the Mortgages have been made, obtained or issued, as applicable;
(xlii) With respect to each Mortgage Loan, the related prior
lien does not provide for negative amortization;
(xliii) With respect to each Mortgage Loan, the maturity date
of the Mortgage Loan is prior to the maturity date of the related prior
lien if such prior lien provides for a balloon payment;
(xliv) Each Initial Pool I Mortgage Loan is secured by a
property having an appraised value as of origination of $3,600,000 or less
and each Initial Pool II Mortgage Loan is secured by a property having an
appraised value as of origination of $6,000,000 or less.
(xlv) With respect to each Mortgage Loan, the improvements
upon each Mortgaged Property are covered by a valid and existing hazard
insurance policy with a carrier generally acceptable to the Servicer that
provides for fire and extended coverage representing coverage not less than
(a) the Credit Limit of such HELOC Mortgage Loan or (b) the Cut-Off Date
Principal Balance of such Closed End Mortgage Loan or (c) the maximum
insurable value of the Mortgaged Property.
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(xlvi) Each Subsequent Mortgage Loan was or will be originated
in accordance with the same underwriting standards that were used to
originate the Initial Mortgage Loans.
(b) Seller represents and warrants to Purchaser that each
Mortgage Loan shall have been originated in conformity with and meets, as of the
Purchase Date, the underwriting standards for the Seller's home equity loans
described in the Prospectus Supplement dated December 15, 1999 with respect to
the Class A-1 Notes and Class A-2 Notes.
(c) Each Mortgage Loan conforms to the representations and
warranties set forth in Section 2.05 of the Sale and Servicing Agreement.
Section 4.03. Representations and Warranties of Purchaser.
Purchaser hereby makes the following representations and warranties, each of
which representations and warranties (i) is material and being relied upon by
Seller and (ii) is true in all respects as of the date of this Agreement:
(i) Purchaser has been duly organized and is validly existing
as a corporation under the laws of the State of Delaware.
(ii) Purchaser has the requisite power and authority and legal
right to execute and deliver, engage in the transactions contemplated by,
and perform and observe the terms and conditions of, this Agreement to be
performed by it.
(iii) This Agreement has been duly authorized and executed by
Purchaser, is valid, binding and enforceable against Purchaser in
accordance with its terms, and the execution, delivery and performance by
Purchaser of this Agreement does not conflict with any material term or
provision of any other agreement to which Purchaser is a party or any term
or provision of the Certificate of Incorporation or the By-laws of the
Purchaser, or any law, rule, equation, order, judgment, writ, injunction or
decree applicable to Purchaser of any court, regulatory body,
administrative agency or governmental body having jurisdiction over
Purchaser.
(iv) No consent, approval, authorization or order of,
registration or filing with, or notice to any governmental authority or
court is required under applicable law in connection with the execution and
delivery by Purchaser of this agreement.
(v) To the best knowledge of Purchaser, there is no action,
proceeding or investigation pending or threatened against Purchaser before
any court, administrative agency or other tribunal (i) asserting the
invalidity of this Agreement, (ii) seeking to prevent the consummation of
any of the transactions contemplated by this Agreement, or (iii) which is
likely to materially and adversely affect the performance by Purchaser of
its obligations under, or the validity or enforceability of, this
Agreement.
(vi) Each purchase of Initial Mortgage Loans and Subsequent
Mortgage Loans hereunder shall constitute a representation by Purchaser to
Seller that Purchaser understands, and that Purchaser has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks of, its investment in the relevant Mortgage
Loans.
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Section 4.04. Remedies for Breach of Representations and
Warranties; Repurchase Obligation. It is understood and agreed that the
representations and warranties set forth in Section 4.01 and 4.02 shall survive
each sale of Mortgage Loans to the Purchaser and shall inure to the benefit of
the Purchaser and subsequent transferees notwithstanding any restrictive or
qualified endorsement on any Mortgage Note or Assignment of Mortgage or the
examination or failure to examine any Mortgage File. With respect to the
representations and warranties contained in Sections 4.01 and 4.02 which are
made to the best of the Seller's knowledge or to the actual knowledge of the
Seller, if it is discovered by either the Seller or the Purchaser that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan or the
Purchaser's interest therein, then notwithstanding the Seller's lack of
knowledge with respect to the inaccuracy at the time the representation or
warranty was made, the Seller shall repurchase the related Mortgage Loan in
accordance with this Section 4.04 as if the applicable representation or
warranty was breached, subject to the terms and conditions of the Sale and
Servicing Agreement. Upon discovery by either the Seller or the Purchaser of a
breach of any of the foregoing representations and warranties which materially
and adversely affects the value of the Mortgage Loans or the interest of the
Purchaser (or which materially and adversely affects the interests of the
Purchaser in the related Mortgage Loan in the case of a representation and
warranty relating to a particular Mortgage Loan), the party discovering such
breach shall give prompt written notice to the others.
Within 60 days of the earlier of either discovery by or notice
to the Seller of any breach of a representation or warranty which materially and
adversely affects the value of any Mortgage Loan or the Purchaser's interest
therein, the Seller shall use its best efforts promptly to cure such breach in
all material respects and, if such breach cannot be cured or is not cured or is
not being diligently pursued as evidenced by a notice acceptable to the
Purchaser, as evidenced by the Purchaser's agreement thereto, at the end of such
60-day period, the Seller shall, at the Purchaser's option, either (a)
repurchase such Mortgage Loan at the Repurchase Price, or (b) provide an
Eligible Substitute Mortgage Loan, if the Seller has any such loans available
for sale at the time subject to the terms and conditions of the Sale and
Servicing Agreement.
At the time of repurchase or substitution, the Purchaser and
the Seller shall arrange for the assignment of such Mortgage Loan to the Seller
and the delivery by the Purchaser to the Seller of the related Mortgage Files.
In addition to such cure and repurchase obligation, the Seller
shall indemnify the Purchaser and hold it harmless against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and other costs and expenses resulting from any claim, demand,
defense or assertion based on or grounded upon, or resulting from, a breach of
the representations and warranties contained in this Article IV (notwithstanding
any limitation in such representation and warranty as to the Seller's
knowledge). It is understood and agreed that the obligations of the Seller set
forth in this Section 4.04 to cure or repurchase a defective Mortgage Loan and
to indemnify the Purchaser as provided in this Section 4.04 constitute the sole
remedies of the Purchaser respecting a breach of the foregoing representations
and warranties.
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Any cause of action against the Seller relating to or arising
out of the breach of any representations and warranties made in Sections 4.01 or
4.02 shall accrue as to any Mortgage Loan upon (i) discovery of such breach by
the Purchaser or notice thereof by the Seller to the Purchaser, (ii) failure by
the Seller to cure such breach or repurchase such Mortgage Loan as specified
above, and (iii) demand upon the Seller by the Purchaser for compliance with the
relevant provisions of this Agreement.
ARTICLE V
Covenants and Warranties of Seller
So long as this Agreement remains in effect or Seller shall
have any obligations hereunder, Seller hereby covenants and agrees with
Purchaser as follows:
Section 5.01. Affirmative Covenants.
(a) Until the later to occur of (i) the discharge and payment
of all of Seller's obligations under this Agreement and (ii) the Termination
Date of this Agreement, Seller shall, promptly upon preparation, but in no event
later than 60 days following the end of each such party's first three fiscal
quarters, deliver to Purchaser its unaudited company-prepared financial
statements as of the end of each such fiscal quarter, prepared in accordance
with GAAP. Seller shall, promptly upon preparation, but in no event later than
90 days following the end of such party's fourth fiscal quarter, deliver to
Purchaser its audited and certified financial statements, prepared in accordance
with GAAP, as of the end of the most recently ended fiscal year, which audits
and certifications shall each be prepared by a nationally recognized independent
accounting firm or by a regionally recognized independent accounting firm with
the prior written consent of Purchaser, which consent shall not be unreasonably
withheld. In all cases, financial statements shall include, without limitation,
a balance sheet, a profit and loss statement and a statement of cash flows.
Notwithstanding anything in this Agreement to the contrary, if (x) the audited
and certified financial statements described in the immediately preceding
sentence are not delivered within the above-specified 90 days, (y) Seller is
diligently using its best efforts to deliver such financial statements, and (z)
Seller provides Purchaser with a notice specifying the reason for the delay and
a date, within a reasonable time period (as determined by Purchaser), on which
such financial statements will be delivered, and they are so delivered; then
failure to deliver such financial statements within the above-specified 90 days,
as the case may be, shall not be deemed to be an Event of Termination of this
Agreement.
(b) Upon request of Purchaser, Seller shall, to the extent
lawful, promptly upon filing, deliver to Purchaser copies of all material public
filings made by Seller with any governmental or quasi-governmental body.
(c) Seller shall (i) with respect to any Mortgage Loans
serviced by Seller or any of its affiliates or otherwise use its best efforts to
cause to be delivered to Purchaser monthly, the report, if any, prepared by the
relevant trustee or servicer setting forth payment activity, defaults and
delinquencies with respect to each Mortgage Loan acquired by Purchaser and (ii)
prepare and deliver reports each month, detailing, with respect to all
Purchases, such information as the Purchaser may from time to time reasonably
request.
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(d) Seller shall do all things necessary to remain duly
incorporated, validly existing and in good standing as a domestic corporation in
its jurisdiction of incorporation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted
except where failure to maintain such authority would not have a material
adverse effect on the ability of Seller to conduct its business or to perform
its obligations under this Agreement.
(e) At all times during this Agreement, Seller shall possess
sufficient net capital and liquid assets (or ability to access the same) to
satisfy its obligations as they become due in the normal course of business.
(f) Seller will notify Purchaser in writing of any of the
following promptly upon learning of the occurrence thereof, describing the same
and, if applicable, any remedial steps being taken with respect thereto;
(i) The occurrence or likelihood of occurrence of an Event of
Termination hereunder;
(ii) The institution of any litigation, arbitration proceeding
or governmental proceeding which, in the opinion of counsel to Seller, will
have a material adverse effect on Seller or the Mortgage Loans;
(iii) The entry of any judgment or decree against Seller if
the aggregate amount of all judgments and decrees then outstanding against
Seller exceeds $10,000,000 after deducting (A) the amount with respect to
which Seller is insured and with respect to which the insurer has assumed
responsibility in writing, and (B) the amount for which Seller is otherwise
indemnified if the terms of such indemnification are reasonably
satisfactory to Purchaser; or
(iv) The occurrence or likelihood of any event which would
allow the obligee under any material loan agreement to which Seller is
bound to declare an event of default or accelerate the obligations of
Seller thereunder.
(g) Seller shall permit the Purchaser or its accountants,
attorneys or other agents access to all of the books and records relating to
Mortgage Loans purchased and retained by Purchaser for inspection and copying
during normal business hours at all places where Seller conducts business.
Section 5.02. Negative Covenants.
(a) Seller shall not assign or attempt to assign this
Agreement or any rights hereunder, without first obtaining the specific written
consent of Purchaser.
(b) Seller shall not amend its Articles of Incorporation or
By-laws, which amendment shall have or is likely to have an adverse effect upon
Purchaser or its interests under this Agreement, without the prior written
consent of Purchaser.
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(c) During the term of this Agreement, Seller shall not engage
in any business other than as a consumer and mortgage finance lender and
servicer, except with the prior written consent of Purchaser.
(d) Seller shall not (i) dissolve or terminate its existence
or (ii) transfer any assets to any affiliate except as otherwise expressly
permitted or contemplated hereby.
(e) Except with the written consent of the Purchaser, the
Seller shall not guarantee, endorse or otherwise in any way become or be
responsible for any obligations of any other person, entity or affiliate,
including, without limitation, whether directly or indirectly by agreement to
purchase the indebtedness of any other person or through the purchase of goods,
supplies or services, or maintenance of working capital or other balance sheet
covenants or conditions, or by way of stock purchase, capital contribution,
advance or loan for the purposes of paying or discharging any indebtedness or
obligation of such other person or otherwise; provided, however, that nothing
contained herein shall prevent Seller from indemnifying its officers, directors
and agents pursuant to its By-laws and its Articles of Incorporation.
(f) Seller will not commit any act in violation of applicable
laws, or regulations promulgated pursuant thereto that relate to the Mortgage
Loans or that materially and adversely affect the operations or financial
conditions of Seller.
ARTICLE VI
Sale of Mortgage Loans from the Purchaser to the Trust
Section 6.01. Sale and Servicing Agreement. It is the intent
of the Seller and the Purchaser that with respect to the Mortgage Loans, the
Purchaser shall concurrently sell all of its right, title and interest to the
Mortgage Loans and all other property conveyed to it hereunder to the Trust
pursuant to the Sale and Servicing Agreement.
With respect to such sale, the Seller agrees:
(i) to cooperate fully with the Purchaser and the Trust with
respect to all reasonable requests and due diligence procedures including
participating in meetings with Rating Agencies, the Insurer and such other
parties as the Purchaser shall designate and participating in meetings with
the Trust and providing information reasonably requested by the Trust;
(ii) to execute the Sale and Servicing Agreement and all other
necessary documents to effect the transactions contemplated therein;
(iii) the Seller shall make the representations and warranties
set forth herein regarding the Seller and the Mortgage Loans as of the date
of the transfer to the Trust;
(iv) to deliver to the Purchaser for inclusion in any
prospectus or other offering material such publicly available information
regarding the Seller, its financial condition and the mortgage loan
delinquency, foreclosure and loss experience of its portfolio as is
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customarily set forth in a prospectus supplement with respect to a
comparable mortgage pool, the underwriting of mortgage loans, the servicer,
the servicing and collection of mortgage loans, lending activities and loan
sales of the servicer, regulatory matters and delinquency and loss
experience and any additional information reasonably requested by the
Purchaser, and to deliver to the Purchaser unaudited consolidated financial
statements of the Seller, in which case the Purchaser shall bear the cost
of having such statements audited by certified public accountants if the
Purchaser desires such an audit, or as is otherwise reasonably requested by
the Purchaser and which the Seller is capable of providing without
unreasonable effort or expense, and to indemnify the Purchaser and its
affiliates for material misstatements or omissions contained in such
information;
(v) to deliver to the Purchaser and to any person designated
by the Purchaser, at the Purchaser's expense, such statements and audit
letters issued by reputable, certified public accountants pertaining to
information provided by the Seller pursuant to clause (iv) above as shall
be reasonably requested by the Purchaser (it being acknowledged by
Purchaser that the delivery of such statements and letters is subject to
the consent of such accountants);
(vi) to deliver to the Purchaser, and to any Person designated
by the Purchaser, such legal documents and in-house opinions of counsel as
are customarily delivered by originators or servicers, as the case may be,
and reasonably determined by the Purchaser to be necessary in connection
with the transactions contemplated by the Sale and Servicing Agreement, it
being understood that the cost of any opinions of outside special counsel
that may be required shall be the responsibility of the Seller;
(vii) to cooperate fully with the Purchaser and any
prospective Purchaser with respect to the preparation of Mortgage Loan
documents and other documents and with respect to servicing requirements
reasonably requested by the Rating Agencies and the Insurer; and
(viii) to negotiate and execute one or more custodial and
servicing agreements among the Purchaser, the Seller and a third party
custodian/trustee which is generally considered to be a prudent
custodian/trustee in the secondary mortgage market designated by the
Purchaser in its sole discretion after consultation with the Seller, in
either case for the purpose of securitizing the Mortgage Loans.
ARTICLE VII
Seller's Servicing Obligations
Section 7.01. Seller's Servicing Obligations. The Seller, as
an independent contract servicer, shall service and administer the Mortgage
Loans in accordance with the terms and provisions set forth in Articles III, IV,
V, VII and VIII of the Sale and Servicing Agreement which sections are hereby
incorporated in this Agreement in their entirety (with, however, the changes and
adjustments as provided in this Agreement) as if the same were contained in this
Article VII.
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To the extent any provision of any definition set forth in the
Sale and Servicing Agreement shall conflict with any provision set forth in this
Agreement, the provision or definition in this Agreement shall govern.
ARTICLE VIII
Fees and Expenses
The Purchaser shall pay any salaries and other compensation
due its employees and the legal fees and expenses of its attorneys and
accountants. All other costs and expenses incurred in connection with the
transfer and delivery of the Mortgage Loans pursuant to this Agreement or the
Sale and Servicing Agreement, including, without limitation, recording fees,
fees for title policy endorsements and continuations, and fees for recording
intervening assignments of Mortgage, shall be paid by the Seller. To the extent
not paid out of the Trust pursuant to Section 8.6(d)(i) of the Indenture, the
Seller shall pay the on-going fees of any custodian or trustee under the Sale
and Servicing Agreement, the Trust Agreement or the Indenture. The Seller shall
pay (i) the acceptance and file review fees of any custodian or trustee under
this Agreement, the Indenture, the Trust Agreement or the Sale and Servicing
Agreement and (ii) the costs of legal counsel and legal opinions, accounting
comfort letters and fees, printing of disclosure documents, rating agency fees,
Insurer up-front fees, SEC filing fees and the costs of any and all related
document preparations associated with the Sale and Servicing Agreement, the
Trust Agreement, the Indenture or this Agreement unless stated otherwise in the
Purchase Request with respect to any Subsequent Mortgage Loans. The Seller also
agrees to pay the fees and other amounts for which the Seller or Servicer is
obligated under the Insurance Agreement.
ARTICLE IX
Termination; Additional Remedies
Upon the occurrence of a Rapid Amortization Event due to an
act or omission of the Seller (an "Event of Termination"), the Purchaser and its
assignees shall have, in addition to all other rights and remedies under this
Agreement or otherwise, all other rights and remedies provided under the UCC of
each applicable jurisdiction and other applicable laws, which rights shall be
cumulative. Without limiting the foregoing, the occurrence of an Event of
Termination shall not deny to the Purchaser or its assignees any remedy in
addition to termination of its obligations to make purchases hereunder to which
the Purchaser or its assignee may be otherwise appropriately entitled, whether
by statute or applicable law, at law or in equity.
ARTICLE X
Payment of Purchase Price
Section 10.01. Purchase Price Payments. On the Closing Date,
and on the Business Day following each other day on which any Mortgage Loans are
purchased from the Seller by the Purchaser pursuant to Article II hereof or
Additional Balances relating to Mortgage
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Loans are funded by the Seller, on the terms and subject to the conditions of
this Agreement, the Purchaser shall pay to the Seller the applicable Purchase
Price by (i) making or causing to be made a cash payment to the Seller or its
designee in such amount determined by the Purchaser, (ii) crediting the Seller
with an additional capital contribution to the Purchaser, (iii) automatically
increasing the principal amount outstanding under the Purchaser Note by the
amount of the excess of the Purchase Price to be paid to the Seller for such
purchased assets over the amount of any cash payment made on such day to the
Seller and/or any capital contribution made by the Seller to the Purchaser,
subject to a cap on such note at any time equal to $10 million or (iv) any
combination of the foregoing. Such $10 million cap may be increased upon the
occurrence of and in the amount of any cash capital contributions made by the
Seller to the Purchaser.
Section 10.02. The Purchaser Note.
(a) On the Closing Date, the Purchaser shall deliver to the
Seller a promissory note, substantially in the form of Exhibit A, payable to the
order of the Seller (such promissory note, as the same has been or hereafter may
be amended, supplemented, endorsed or otherwise modified from time to time,
together with any promissory note issued from time to time in substitution
therefor or renewal thereof in accordance with this Agreement, being herein
called the "Purchaser Note"), which Purchaser Note shall, in accordance with its
terms, be subordinated to all interests of the Trust, all claims to the cash
flows from Trust assets and all obligations of the Purchaser, of any nature, now
or hereafter arising under or in connection with the Sale and Servicing
Agreement. The Purchaser Note shall evidence all amounts outstanding thereunder
as of the Closing Date in addition to amounts subsequently incurred thereunder
as provided in this Agreement. Subject to the foregoing, the Purchaser Note
shall be payable in full on the date which is one year and one day after the
Termination Date. The Purchaser Note shall bear interest at the "prime rate" as
determined by the Indenture Trustee from time to time in effect. The Purchaser
may prepay all or part of the outstanding balance of the Purchaser Note and
interest accrued thereon from time to time without any premium or penalty,
unless an Event of Default has occurred and is continuing or would result from
such prepayment or payment.
(b) The Servicer shall hold the Purchaser Note for the benefit
of the Seller, and shall make all appropriate recordkeeping entries with respect
to the Purchaser Note or otherwise to reflect the payments on and adjustments of
the Purchaser Note. The Servicer's books and records shall constitute rebuttable
presumptive evidence of the principal amount of and accrued interest on the
Purchaser Note at any time. The Seller hereby irrevocably authorizes the
Servicer to mark the Purchaser Note "CANCELLED" and to return the Purchaser Note
to the Purchaser upon the full and final payment thereof after the Termination
Date.
(c) The Seller hereby agrees not to transfer, assign, exchange
or otherwise convey or pledge, hypothecate or otherwise grant a security
interest in the Purchaser Note or any interest represented thereby, and any
attempt to transfer, assign, exchange, convey, pledge, hypothecate or grant a
security interest in the Purchaser Note or any interest represented thereby
shall be void and of no effect.
19
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ARTICLE XI
Confidentiality
Purchaser and Seller each acknowledges that the information
heretofore provided to them pursuant to the operation of this Agreement, is
highly confidential, proprietary information of Seller or Purchaser, as the case
may be. Purchaser and Seller each agrees that it will hold such information in
strict confidence and will not disclose any part of such information to any
person or entity, other than to its accountants and lawyers to the extent
necessary for the performance of their duties and as required by law and other
than to such other persons to the extent necessary, as determined by the
Purchaser in its sole discretion, to complete the transactions contemplated
hereunder and in the Sale and Servicing Agreement including the offering and
issuance of the Class A-1 Notes and Class A-2 Notes; provided, however, that
copies of this Agreement may be included as part of any filing made pursuant to
the Securities Act of 1933 and the Securities Exchange Act of 1934 and any
regulations promulgated thereunder. In furtherance of the foregoing, Purchaser
and Seller each covenants that it will adhere to its established procedures for
the maintenance of confidentiality with respect to such information. Purchaser
and Seller each further agrees that it will not distribute such information
within its own organization except to persons with a need to know such
information in connection with the transactions contemplated by this Agreement.
ARTICLE XII
Term
This Agreement shall terminate on the Termination Date.
ARTICLE XIII
Exclusive Benefit of Parties; Assignment
This Agreement is for the exclusive benefit of the parties
hereto and their respective successors and assigns and shall not be deemed to
give any legal or equitable right to any other person except the Sponsor, the
Trust, the holders of the Class A-1 Notes and Class A-2 Notes and the Insurer.
Notwithstanding the foregoing, the Seller covenants and agrees that the
representations and warranties contained in this Agreement and the rights of the
Purchaser hereunder are intended to benefit the Trust, the holders of the Class
A-1 Notes and Class A-2 Notes and the Insurer. This Agreement may not be
assigned by any party hereto without the prior written consent of the other
party hereto except to the Trust.
ARTICLE XIV
Amendment; Waivers
This Agreement may be amended from time to time only by
written agreement of Seller and Purchaser with the prior written consent of the
Insurer, which consent shall not be
20
<PAGE>
unreasonably withheld. Any forbearance, failure, or delay by a party in
exercising any right, power, or remedy hereunder shall not be deemed to be a
waiver thereof, and any single or partial exercise by a party of any right,
power or remedy hereunder shall not preclude the further exercise thereof. Every
right, power and remedy of a party shall continue in full force and effect until
specifically waived by it in writing. No right, power or remedy shall be
exclusive, and each such right, power or remedy shall be cumulative and in
addition to any other right, power or remedy, whether conferred hereby or
hereafter available at law or in equity or by statute or otherwise.
ARTICLE XV
Execution in Counterparts
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original, and all of which shall constitute one
and the same instrument.
ARTICLE XVI
Effect of Invalidity of Provisions
In case any one or more of the provisions contained in this
Agreement should be or become invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
herein shall in no way be affected, prejudiced or disturbed thereby.
ARTICLE XVII
Governing Law
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to its rules
regarding conflict of laws.
ARTICLE XVIII
Notices
Any notices, consents, directions, demands and other
communications given under this Agreement (unless otherwise specified herein)
shall be in writing and shall be deemed to have been duly given when personally
delivered at or telecopied to the respective addresses or facsimile numbers, as
the case may be, set forth on the signature page hereof for Seller and
Purchaser, or to such other address or facsimile number as either party shall
give notice to the other party pursuant to this Section. Notices, consents,
etc., may also be effected by first class mail, postage prepaid sent to the
foregoing addresses and will be effective upon receipt by the intended
recipient.
21
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ARTICLE XIX
Entire Agreement
This Agreement, including the Exhibits and Schedules hereto,
contains the entire agreement of the parties hereto with respect to the subject
matter hereof, and supersedes all prior and contemporaneous agreements between
them, whether oral or written, of any nature whatsoever with respect to the
subject matter hereof.
ARTICLE XX
Indemnities
Without limiting any other rights which Purchaser or Seller
may have hereunder or under applicable law, and in addition to any other
indemnity provided hereunder, Seller hereby agrees to indemnify Purchaser and
its respective officers, directors, agents and employees (each, an "Indemnified
Party") from and against any and all Losses incurred by any of them relating to
or resulting from:
(1) any representation or warranty made by Seller (or any
officers, employees or agents of Seller) under or in connection with this
Agreement, any periodic report required to be furnished thereunder or any
other information or document delivered by Seller pursuant hereto, which
shall have been false or incorrect in any material respect when made or
deemed made;
(2) the failure by Seller to (a) comply with any applicable
law, rule or regulation with respect to any Purchase or (b) perform or
observe any material obligation or covenant hereunder; or
(3) the failure by Seller (if so requested by Purchaser) to
execute and properly file, or any delay in executing and properly filing,
financing statements or other similar instruments or documents under the
Uniform Commercial Code of any applicable jurisdiction or other applicable
laws with respect to the Mortgage Loans.
Promptly after receipt by an Indemnified Party under this
Article XX of notice of the commencement of any action, such Indemnified Party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Article XX, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party will
not relieve it from any liability that it may have to any Indemnified Party
otherwise than under this Article XX. In case any such action is brought against
any Indemnified Party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the Indemnified
Party promptly after receiving the aforesaid notice from such Indemnified Party,
to assume the defense thereof, with counsel satisfactory to such Indemnified
Party; provided, however, that if the defendants in any such action include both
the Indemnified Party and the indemnifying party and the Indemnified Party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other Indemnified Parties that are different from
or additional to those available to the indemnifying party, the Indemnified
Party or
22
<PAGE>
parties shall have the right to elect separate counsel to assert such legal
defenses and to otherwise participate in the defense of such action on behalf of
such Indemnified Party or parties. Upon receipt of notice from the indemnifying
party to such Indemnified Party of its election so to assume the defense of such
action and approval by the Indemnified Party of counsel, the indemnifying party
will not be liable for any legal or other expenses subsequently incurred by such
Indemnified Party in connection with the defense thereof, unless (i) the
Indemnified Party shall have employed separate counsel in connection with the
assertion of legal defenses in accordance with the proviso to the next preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by you in
the case of Article XX, representing the Indemnified Parties under this Article
XX, who are parties to such action), (ii) the indemnifying party shall not have
employed counsel satisfactory to the Indemnified Party to represent the
Indemnified Party within a reasonable time after notice of commencement of the
action or (iii) the indemnifying party has authorized the employment of counsel
for the Indemnified Party at the expense of the indemnifying party; and except
that, if clause (i) or (iii) is applicable, such liability shall only be in
respect of the counsel referred to in such clause (i) or (iii).
ARTICLE XXI
RESPA Obligations
Seller agrees to discharge on Purchaser's behalf all
obligations, including, without limitation, all disclosure obligations, which
Purchaser may have under the Real Estate Settlement Procedures Act of 1974, as
amended, in connection with Purchaser's purchases of Mortgage Loans hereunder.
Purchaser agrees to provide Seller with such information as is reasonably
necessary for Seller to discharge such obligations and hereby appoints Seller as
its agent in its name for the purposes of, and only for the purposes of,
performing such obligations. Seller hereby agrees to indemnify Purchaser and its
respective officers, directors, agents and employees from any losses suffered by
any such party in connection with Seller's obligations under this Article XXI.
ARTICLE XXII
Survival
All indemnities and undertakings of Seller and Purchaser
hereunder shall survive the termination of this Agreement.
ARTICLE XXIII
Right of Set-off
Upon the occurrence of any event or circumstance which
requires Seller to make a payment hereunder, Purchaser is hereby authorized then
or at any time or times thereafter, without notice to Seller (any such notice
being expressly waived by Seller), to set-off and apply any and all deposits
(general or special, time or demand, provisional or final), at any time held
23
<PAGE>
and other indebtedness at any time owing by Purchaser to or for the credit or
the account of Seller against any and all of the obligations of Seller now or
hereafter existing hereunder, irrespective of whether or not Purchaser shall
have made any demand hereunder. Purchaser agrees promptly to notify Seller after
any such set-off and application made by Purchaser; provided that the failure to
give such notice shall not affect the validity of such set-off and application.
The rights of Purchaser under this Article XXIII are in addition to other rights
and remedies which Purchaser may have.
ARTICLE XXIV
Consent to Service
Each party irrevocably consents to the service of process by
registered or certified mail, postage prepaid, to it at its address given
pursuant to Article XVIII hereof.
ARTICLE XXV
Submission to Jurisdiction; Waiver of Trial by Jury
With respect to any claim arising out of this Agreement each
party irrevocably submits to the exclusive jurisdiction of the courts of the
State of New York and the United States District Court located in the Borough of
Manhattan, City of New York, and each party irrevocably waives any objection
which it may have at any time to the laying of venue of any suit, action or
proceeding arising out of or relating hereto brought in any such court,
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party; provided that service of process is made as set
forth in Article XXIV hereof, or by any other lawful means. To the extent
permitted by applicable law, Purchaser and Seller each irrevocably waive all
right of trial by jury in any action, proceeding or counterclaim arising out of
or in connection with this Agreement or any matter arising hereunder.
ARTICLE XXVI
Construction
The headings in this Agreement are for convenience only and
are not intended to influence its construction. References to Articles,
Sections, Schedules and Exhibits in this Agreement are to the Articles, Sections
of and Schedules and Exhibits to this Agreement. The Schedules and Exhibits are
hereby incorporated into and form a part of this Agreement. In this Agreement,
the singular includes the plural, the plural the singular, the words "and" and
"or" are used in the conjunctive or disjunctive as the sense and circumstances
may require and the word "including" means "including, but not limited to."
Unless otherwise stated in this Agreement, in the computation of a period of
time from a specified date to a later specified date, the word
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<PAGE>
"from" means "from and including" and the words "to" and "until" each means "to
but excluding."
ARTICLE XXVII
Further Agreements
The Seller and the Purchaser each agree to execute and deliver
to the other such reasonable and appropriate additional documents, instruments
or agreements as may be necessary or appropriate to effectuate the purposes of
this Agreement.
25
<PAGE>
IN WITNESS WHEREOF, the Purchaser and the Seller have caused
their names to be signed hereto by their respective officers thereunto duly
authorized, all as of the date first written above.
GREENPOINT MORTGAGE SECURITIES INC.,
as Purchaser
700 Larkspur Landing
Circle, Suite 240
Larkspur, California 94939
By: /s/ Kristen Decker
------------------
Name: Kristen Decker
Title: Vice President
GREENPOINT MORTGAGE FUNDING, INC.,
as Seller
700 Larkspur Landing
Circle, Suite 250
Larkspur, California 94939
By: /s/ Gilbert J. MacQuarrie
----------------------------
Name: Gilbert J. MacQuarrie
Title: Executive Vice President and Chief
Financial Officer
[Mortgage Loan Purchase Agreement]
<PAGE>
EXHIBIT A
FORM OF NON-NEGOTIABLE
GREENPOINT MORTGAGE SECURITIES INC.
PROMISSORY NOTE
December 22, 1999
EXCEPT TO THE EXTENT PROVIDED IN THE PURCHASE AGREEMENT REFERRED TO BELOW, THIS
PROMISSORY NOTE AND ANY INTEREST REPRESENTED HEREBY SHALL NOT BE TRANSFERRED,
ASSIGNED, EXCHANGED, CONVEYED, PLEDGED, HYPOTHECATED OR OTHERWISE THE SUBJECT OF
THE GRANT OF A SECURITY INTEREST AND ANY ATTEMPT TO TRANSFER, ASSIGN, EXCHANGE,
CONVEY, PLEDGE, HYPOTHECATE OR GRANT A SECURITY INTEREST IN THIS PROMISSORY NOTE
OR ANY INTEREST REPRESENTED HEREBY SHALL BE VOID AND OF NO EFFECT.
FOR VALUE RECEIVED, the undersigned, GREENPOINT MORTGAGE SECURITIES INC., a
Delaware corporation (the "Purchaser"), promises to pay to GREENPOINT MORTGAGE
FUNDING, INC., a California corporation (the "Seller"), on the terms and subject
to the conditions set forth herein and in the Purchase Agreement referred to
below, the aggregate unpaid Purchase Price of all assets purchased and to be
purchased by the Purchaser pursuant to the Purchase Agreement, provided that
such amount shall in no event exceed [$__________]. Such amount as shown in the
records of the Seller will be rebuttable presumptive evidence of the principal
amount owing under this Note.
1. Purchase and Sale Agreement. This Note is the Purchaser
Note described in, and is subject to the terms and conditions set forth in, that
certain Mortgage Loan Purchase Agreement dated as of December 1, 1999 (as the
same may be amended, supplemented, restated or otherwise modified in accordance
with its terms, the "Purchase Agreement"), between the Seller and the Purchaser.
Reference is hereby made to the Purchase Agreement for a statement of certain
other rights and obligations of the Purchaser and the Seller.
2. Definitions. Capitalized terms used (but not defined)
herein have the meanings ascribed thereto in the Purchase Agreement. In
addition, as used herein, the following terms have the following meanings:
"Bankruptcy Proceedings" has the meaning set forth in
clause (a) of paragraph 7 hereof."
"Final Maturity Date" means the date that falls one year
and one day after the Termination Date.
"Junior Liabilities" means all obligations of the Purchaser
to the Seller under this Note and under all similar Notes issued by the
Purchaser to the Seller in connection with any previous or future securitization
transactions.
A-1
<PAGE>
"Senior Liabilities" means all obligations of the Purchaser
to the Trust and any other obligations of the Purchaser arising under or in
connection with the Sale and Servicing Agreement, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or thereafter
existing, or due or to become due on or before the Final Maturity Date.
"Subordination Provisions" means, collectively, clauses (a)
through (i) of paragraph 7 hereof.
3. Interest. Subject to the Subordination Provisions and
paragraph 10 hereof, the Purchaser promises to pay interest on the aggregate
unpaid principal amount of this Note outstanding on each day, at a variable rate
equal to the rate publicly announced by the Indenture Trustee from time to time
as its "prime lending rate."
4. Interest Payment Dates. Subject to the Subordination
Provisions, paragraph 10 hereof and Section 10.02 of the Purchase Agreement, the
Purchaser shall pay accrued interest on this Note on each Payment Date and on
the Final Maturity Date. The Purchaser also shall pay accrued interest on the
principal amount of each prepayment hereof on the date of each such prepayment.
5. Basis of Computation. Interest accrued hereunder shall be
computed for the actual number of days elapsed on the basis of a 360-day year.
6. Principal Payment Dates. Subject to the Subordination
Provisions, any unpaid principal of this Note shall be paid on the Final
Maturity Date (or, if such date is not a Business Day, the next succeeding
Business Day). Subject to the Subordination Provisions, paragraph 10 hereof and
Section 10.02 of the Purchase Agreement, the principal amount of and accrued
interest on this Note may be prepaid on any Business Day without premium or
penalty.
7. Subordination Provisions. The Purchaser covenants and
agrees, and the Seller, by its acceptance of this Note, likewise covenants and
agrees, that the payment of all Junior Liabilities is hereby expressly
subordinated in right of payment to the payment and performance of the Senior
Liabilities to the extent and in the manner set forth in the following clauses
of this paragraph 7:
(a) (i) In the event of any dissolution, winding up,
liquidation, readjustment, reorganization or other similar event relating to the
Purchaser, whether voluntary or involuntary, partial or complete, and whether in
bankruptcy, insolvency, receivership or other similar proceedings, or upon an
assignment for the benefit of creditors, or any other marshalling of the assets
and liabilities of the Purchaser or any sale of all or substantially all of the
assets of the Purchaser except pursuant to the Sale and Servicing Agreement
(such proceedings being herein collectively called "Bankruptcy Proceedings"),
and (ii) on and after the occurrence of an Event of Default, the Senior
Liabilities shall first be paid and performed in full and in cash before the
Seller shall be entitled to receive and to retain any payment or distribution in
respect of the Junior Liabilities. In order to implement the foregoing: (x) all
payments and distributions of any kind or character in respect of the Junior
Liabilities to which the Seller would be entitled except for this clause (a)
shall be made directly to the Indenture Trustee (for the benefit of the
A-2
<PAGE>
Noteholders); and (y) the Seller hereby irrevocably agrees that the Indenture
Trustee (on behalf of the Noteholders), in the name of the Seller or otherwise,
may demand, sue for, collect, receive and receipt for any and all such payments
or distributions, and file, prove and vote or consent in any such Bankruptcy
Proceedings with respect to any and all claims of the Seller relating to the
Junior Liabilities, in each case until the Senior Liabilities shall have been
paid and performed in full and in cash.
(b) following the occurrence of any of the events described in
clause (a)(i) or (ii), in the event that the Seller receives any payment or
other distribution of any kind or character from the Purchaser or from any other
source whatsoever, in respect of the Junior Liabilities, such payment or other
distribution shall be received in trust for the Indenture Trustee and shall be
turned over by the Seller to the Indenture Trustee (for the benefit of the
Noteholders) forthwith. All payments and distributions received by the Indenture
Trustee in respect of this Note, to the extent received in or converted into
cash, may be applied by the Indenture Trustee (for the benefit of the
Noteholders) first to the payment of any and all reasonable expenses (including
reasonable attorneys' fees and legal expenses) paid or incurred by the Indenture
Trustee or the Noteholders in enforcing these Subordination Provisions, or in
endeavoring to collect or realize upon the Junior Liabilities, and any balance
thereof shall, solely as between the Seller and the Noteholders, be applied by
the Indenture Trustee toward the payment of the Senior Liabilities in a manner
determined by the Indenture Trustee to be in accordance with the Indenture; but
as between the Purchaser and its creditors, no such payments or distributions of
any kind or character shall be deemed to be payments or distributions in respect
of the Senior Liabilities.
(c) Upon the final payment in full and in cash of all Senior
Liabilities, the Seller shall be subrogated to the rights of the Indenture
Trustee to receive payments or distributions from the Purchaser that are
applicable to the Senior Liabilities until the Junior Liabilities are paid in
full.
(d) These Subordination Provisions are intended solely for the
purpose of defining the relative rights of the Seller, on the one hand, and the
Indenture Trustee (on behalf of Noteholders), on the other hand. Nothing
contained in these Subordination Provisions or elsewhere in this Note (subject
to paragraph 10 hereof) is intended to or shall impair, as between the
Purchaser, its creditors (other than the Noteholders) and the Seller, the
Purchaser's obligation, which is unconditional and absolute, to pay the Junior
Liabilities as and when the same shall become due and payable in accordance with
the terms hereof (subject to paragraph 10 hereof) and of the Purchase Agreement
or to affect the relative rights of the Seller and creditors of the Purchaser
(other than the Noteholders).
(e) The Seller shall not, until the Senior Liabilities have
been finally paid and performed in full and in cash, (i) cancel, waive, forgive,
transfer or assign, or commence legal proceedings to enforce or collect, or
subordinate to any obligation of the Purchaser, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, or now or
thereafter existing, or due or to become due (other than the Senior
Liabilities), the Junior Liabilities or any rights in respect hereof or (ii)
convert the Junior Liabilities into an equity interest in the Purchaser, unless,
in the case of each of clauses (i) and (ii) above, the Seller shall have
received the prior written consent of the Indenture Trustee and the Insurer in
each case.
A-3
<PAGE>
(f) The Seller shall not, except without the advance written
consent of the Indenture Trustee and the Insurer, commence, or join with any
other Person in commencing, any Bankruptcy Proceedings with respect to the
Purchaser until at least one year and one day have passed since the Termination
Date.
(g) If, at any time, any of the payment (in whole or in part)
made with respect to any Senior Liabilities is rescinded or must be restored or
returned by the Indenture Trustee or Noteholders (whether in connection with any
Bankruptcy Proceedings or otherwise), these Subordination Provisions shall
continue to be effective or shall be reinstated, as the case may be, as though
such payment had not been made.
(h) The Indenture Trustee (on behalf of Noteholders) may, from
time to time, with the consent of the Insurer without notice to the Seller, and
without waiving any of its rights under these Subordination Provisions, take any
or all of the following actions: retain or obtain an interest in any property to
secure any of the Senior Liabilities; (ii) retain or obtain the primary or
secondary obligations of any other obligor or obligors with respect to any of
the Senior Liabilities; (iii) extend or renew for one or more periods (whether
or not longer than the original period), alter or exchange any of the Senior
Liabilities, or release or compromise any obligation of any nature with respect
to any of the Senior Liabilities; (iv) amend, supplement, amend and restate, or
otherwise modify the Sale and Servicing Agreement or any related document; and
(v) release its security interest in or surrender, release or permit any
substitution or exchange for all or any part of any rights or property securing
any of the Senior Liabilities, or extend or renew for one or more periods
(whether or not longer than the original period) or release, compromise, alter
or exchange any obligations of any nature of any obligor with respect to any
such rights or property.
(i) The Seller hereby waives: (i) notice of acceptance of
these Subordination Provisions by any of the Noteholders, (ii) notice of the
existence, creation, non-payment or non-performance of all or any of the Senior
Liabilities; and (iii) all diligence in enforcement, collection or protection
of, or realization upon, the Senior Liabilities, or any thereof, or any security
therefor.
(j) These Subordination Provisions constitute a continuing
offer from the Purchaser to all Persons who become the holders of, or who
continue to hold, Senior Liabilities; and these Subordination Provisions are
made for the benefit of the Noteholders, and the Indenture Trustee may proceed
to enforce such provisions on behalf of each of such Persons.
8. General. No failure or delay on the part of the Seller in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power or right preclude any
other or further exercise thereof or the exercise of any other power or right.
No amendment, modification or waiver of, or consent with respect to, any
provision of this Note shall in any event be effective unless (a) the same shall
be in writing and signed and delivered by the Purchaser and the Seller, and (b)
all consents required for such actions under the Purchase Agreement and the Sale
and Servicing Agreement shall have been received by the appropriate Persons. The
rights and remedies granted hereunder to the Indenture Trustee and the
Noteholders are subject to exercise as provided in the Purchase Agreement and
the Sale and Servicing Agreement.
A-4
<PAGE>
9. Limitation on Interest. Notwithstanding anything in this
Note to the contrary, the Purchaser shall never be required to pay unearned
interest on any amount outstanding hereunder, and shall never be required to pay
interest on the principal amount outstanding hereunder at a rate in excess of
the maximum interest rate that may be contracted for, charged or received
without violation of applicable federal or state law.
10. Acknowledgment. The Seller acknowledges and agrees that it
has no rights to payment under this Note, and will not make any claim for
payment hereunder, unless funds are available for payment by the Purchaser in
excess of amounts due and payable by it at the time under the Sale and Servicing
Agreement and under all similar notes issued by the Purchaser to the Seller in
connection with any previous or future securitizations.
11. No Negotiation. This Note is not negotiable.
12. Governing Law. THIS NOTE SHALL BE DEEMED TO BE A CONTRACT
MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.
13. Captions. Paragraph captions used in this Note are
provided solely for convenience of reference only and shall not affect the
meaning or interpretation of any provision of this Note
GREENPOINT MORTGAGE SECURITIES INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
A-5
<PAGE>
SCHEDULE I
MORTGAGE LOAN SCHEDULE
[On file with Indenture Trustee]
<PAGE>
EXHIBIT B
Mortgage Loan Purchase Agreement
[Form of Purchase Request]
GreenPoint Mortgage Securities Inc.
700 Larkspur Landing Circle
Suite 240
Larkspur, California 94939
Pursuant to Section 2.04 of the Mortgage Loan Purchase
Agreement dated as of December 1, 1999 between GreenPoint Mortgage Funding, Inc.
and you, we hereby offer to sell, transfer and assign to you all of GreenPoint
Mortgage Funding, Inc.'s right, title and interest in and to the Subsequent
Mortgage Loans identified in the attached schedule on the following date (the
"Purchase Date"): ____________, including any Additional Balances thereto.
Please acknowledge your acceptance of such offer by executing
this Purchase Request in the space provided below and returning it to GreenPoint
Mortgage Funding, Inc. at ___________ by facsimile with an original acceptance
to follow by first class mail.
The failure of GreenPoint Mortgage Securities Inc. to return
this Purchase Request after execution by GreenPoint Mortgage Securities Inc., to
GreenPoint Mortgage Funding, Inc. in the manner provided above within three
Business Days prior to the Purchase Date (five business days, if this Purchase
Request was received by you at least two calendar weeks prior to the
above-referenced Purchase Date) shall constitute an acceptance of the offer
communicated hereby.
Very truly yours,
GreenPoint Mortgage Funding, Inc.
By:
------------------------------
Name:
Title:
Agreed to and acknowledged
this ____ day of, ____________, _____.
GreenPoint Mortgage Securities Inc.
By:
-----------------------------------
Name:
Title:
<PAGE>
EXHIBIT 4.5
<TABLE>
<S> <C>
AMBAC Ambac Assurance Corporation
Certificate Guaranty Insurance Policy c/o CT Corporation Systems
44 East Mifflin Street, Madison, Wisconsin 53703
Administrative Office:
One State Street Plaza, New York, New York 10004
Telephone: (212) 668-0340
Insured Obligations: $245,645,000 Greenpoint Policy Number:
Home Equity Loan Trust 1992-2, Home Equity AB0330BE
Loan Asset-Backed Notes, Series 1992-2,
Class A-1 and Class A-2
Premium: Calculated as set forth in the
Certificate Guaranty Insurance Policy
Endorsement attached hereto and made
a part hereof
</TABLE>
Ambac Assurance Corporation (Ambac) A Wisconsin Stock Insurance Company in
consideration of the payment of the premium and subject to the terms of this
Policy, hereby agrees unconditionally and irrevocably to pay to the Trustee for
the benefit of the Holders of the Insured Obligations, that portion of the
Insured Amounts which shall become Due for Payment but shall be unpaid by reason
of Nonpayment.
Ambac will make such payments to the Trustee from its own funds on the later of
(a) one (1) Business Day following notification to Ambac of Nonpayment or (b)
the Business Day on which the Insured Amounts are Due for Payment. Such payments
of principal or interest shall be made only upon presentation of an instrument
of assignment in form and substance satisfactory to Ambac, transferring to Ambac
all rights under such Insured Obligations to receive the principal of and
interest on the Insured Obligation. Ambac shall be subrogated to all the
Holders' rights to payment on the Insured Obligations to the extent of the
insurance disbursements so made. Once payments of the Insured Amounts have been
made to the Trustee, Ambac shall have no further obligation hereunder in respect
of such Insured Amounts.
In the event the Trustee for the Insured Obligations has notice that nay payment
of principal or interest on an Insured Obligation which has become Due for
Payment and which is made to a Holder by or on behalf of the Trustee has been
deemed a preferential transfer and theretofore recovered from its Holder
pursuant to the United States Bankruptcy Code in accordance with a final,
nonappealable order of a court of competent jurisdiction, such Holder will be
entitled to payment from Ambac to the extent of such recovery if sufficient
funds are not otherwise available.
This Policy is noncancelable by Ambac for any reason, including failure to
receive payment of any premium due hereunder. The premium on this Policy is not
refundable for any reason. This Policy does not insure against loss of any
prepayment or other acceleration payment which at any time may become due in
respect of any Insured Obligation, other than at the sole option of Ambac, nor
against any risk other than Nonpayment, including failure of the Trustee to make
any payment due Holders of Insured Amounts.
To the fullest extent permitted by applicable law, Ambac hereby waives and
agrees not to assert any and all rights and defenses, to the extent such rights
and defenses may be available to Ambac, to avoid payment of its obligations
under this Policy in accordance with the express provisions hereof.
Any capitalized terms not defined herein shall have the meaning given such terms
in the endorsement attached hereto or in the Agreement.
In witness whereof, Ambac has caused this Policy to be affixed with its
corporate seal and to be signed by its duly authorized officers in facsimile to
become effective as their original signatures and binding upon Ambac by virtue
of the countersignature of its duly authorized representative.
/s/ P. Lassiter /s/ Stephen D. Cooke
President Secretary
/s/ [Authorized Representative]
Effective Date: December 22, 1999 Authorized Representative
<PAGE>
CERTIFICATE GUARANTY INSURANCE ENDORSEMENT
Attached to and forming Effective Date of Endorsement:
part of Policy #AB0330BE December 22, 1999
issued to:
Bank One, National Association,
as Indenture Trustee for the Holders of
GreenPoint Home Equity Loan Asset-Backed
Notes, Series 1999-2
For all purposes of this Policy, the following terms shall have the
following meanings:
"Agreement" shall mean the Sale and Servicing Agreement dated as of
December 1, 1999 between GreenPoint Mortgage Securities Inc., as Sponsor,
GreenPoint Mortgage Funding, Inc., as Servicer, and GreenPoint Home Equity Loan
Trust 1999-2, as Issuer, as such Agreement may be amended, modified or
supplemented from time to time as set forth in the Agreement.
"Certificate Insurance Policy" or "Policy" shall mean this Certificate
Guaranty Insurance Policy together with each and every endorsement hereto.
"Collection Account" shall mean the account created and maintained with
the Trustee for the benefit of the Holders and the Insurer pursuant to Section
8.3 of the Indenture.
"Deficiency Amount" means, for each Payment Date, the excess, if any,
of Required Payments over the Net Available Distribution Amount for such Payment
Date.
"Due for Payment" shall mean with respect to any Insured Payment or
Preference Amount, the date such amount is due and payable pursuant to the terms
of the Agreement.
"First Payment Date" shall mean January 18, 2000.
"Holder" shall mean any person who is the registered owner or
beneficial owner of any Notes.
<PAGE>
-2-
"Indenture" shall mean the Indenture between GreenPoint Home Equity
Loan Trust 1999-2, as Issuer and Bank One, National Association as Indenture
Trustee, dated December 1, 1999.
"Indenture Trustee" shall mean Bank One, National Association or its
successor-in-interest, in its capacity as Indenture trustee under the Indenture,
or if any successor Indenture trustee or any co-trustee shall be appointed as
provided therein, then "Indenture Trustee" shall also mean such successor
trustee or such co-trustee, as the case may be, subject to the provisions
thereof.
"Insurance Agreement" shall mean the Insurance and Indemnity Agreement,
dated as of December 22, 1999, among GreenPoint Mortgage Securities Inc., as
Sponsor, GreenPoint Mortgage Funding, Inc., as Servicer, Bank One, National
Association, as Indenture Trustee, Ambac Assurance Corporation, as Insurer, and
GreenPoint Home Equity Loan Trust 1999-2, as Issuer, as such Agreement may be
amended, modified or supplemented from time to time.
"Insured Amounts" shall mean, with respect to any Payment Date, the
Deficiency Amount for such Payment Date.
"Insured Payments" shall mean, with respect to any Payment Date, the
aggregate amount actually paid by the Insurer to the Indenture Trustee in
respect of (i) Insured Amounts for such Payment Date and (ii) Preference Amounts
for any given Business Day.
"Insurer" shall mean Ambac Assurance Corporation, or any successor
thereto, as issuer of this Policy.
"Late Payment Rate" shall mean for any Payment Date, the greater of (i)
the rate of interest, as it is publicly announced by Citibank, N.A. at its
principal office in New York, New York as its prime rate (any change in such
prime rate of interest to be effective on the date such change is announced by
Citibank, N.A.) plus 2% and (ii) the then applicable highest rate of interest on
the Notes. The Late Payment Rate shall be computed on the basis of a year of 360
days and the actual number of days elapsed. In no event shall the Late Payment
Rate exceed the maximum rate permissible under any applicable law limiting
interest rates.
"Net Available Distribution Amount" means, with respect to any Payment
Date, the sum of (i) the Total Available Funds on such Payment Date minus (ii)
the Indenture Trustee's Fee and the Premium Amount.
"Nonpayment" shall mean, with respect to any Payment Date, an Insured
Amount is Due for Payment but has not been paid pursuant to the Agreement.
<PAGE>
-3-
"Notes" shall mean any one of the GreenPoint Home Equity Loan
Asset-Backed Notes, Series 1999-2, Class A-1 and Class A-2, substantially in the
form set forth in Exhibit A and Exhibit B to the Indenture.
"Notice" shall mean the telephonic or telegraphic notice, promptly
confirmed in writing by telecopy substantially in the form of Exhibit A to the
Policy, the original of which is subsequently delivered by registered or
certified mail, from the Trustee specifying the Insured Amount which shall be
due and owing on the applicable Payment Date.
"Payment Date" shall mean the 15th day of any month (or if such 15th
day is not a Business Day the first Business Day immediately following)
beginning with the First Payment Date.
"Preference Amount" means any payment of principal or interest on a
Note which has become Due for Payment and which is made to a Holder by or on
behalf of the Indenture Trustee which has been deemed a preferential transfer
and theretofore recovered from its Holder pursuant to the United States
Bankruptcy Code in accordance with a final, nonappealable order of a court of
competent jurisdiction.
"Premium Percentage" shall have the meaning set forth in the Insurance
Agreement.
"Reimbursement Amount" shall mean, as to any Payment Date, the sum of
(x) (i) all Insured Payments paid by the Insurer, but for which the Insurer has
not been reimbursed prior to such Payment Date pursuant to Section 8.5(d)(vi)of
the Indenture, plus (ii) interest accrued thereon, calculated at the Late
Payment Rate from the date the Indenture Trustee received the related Insured
Payments, and (y) without duplication (i) any amounts then due and owing to the
Insurer under the Insurance Agreement plus (ii) interest on such amounts at the
Late Payment Rate.
"Relief Act Shortfalls" shall mean interest shortfalls resulting from
the application of the Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.
"Required Payments" shall mean, (a) for any Payment Date, the sum of
(i) the Interest Payment Amount (excluding any Relief Act Shortfalls) and (ii)
any Overcollateralization Deficit and (b) on the Final Scheduled Payment Date,
the outstanding Note Principal Balance.
"Trust Agreement" shall mean the Trust Agreement between GreenPoint
Mortgage Securities Inc., as Sponsor and Wilmington Trust Company as Owner
Trustee, dated as of December 1, 1999.
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in Annex A to the Indenture or the Trust Agreement.
As provided by the Policy, the Insurer will pay any Insured Amount
payable hereunder, no later than 12:00 noon, New York City time, on the later of
the Payment Date on which such Insured
<PAGE>
-4-
Amount is due or the Business Day following receipt in New York, New York on a
Business Day by the Insurer of a Notice; provided that, if such Notice is
received after 12:00 noon, New York City time, on such Business Day, it will be
deemed to be received on the following Business Day. If any such Notice is not
in proper form or is otherwise insufficient for the purpose of making a claim
under the Policy, it shall be deemed not to have been received for purposes of
this paragraph, and the Insurer shall promptly so advise the Indenture Trustee
and the Indenture Trustee may submit an amended Notice.
The Insurer shall pay any Preference Amount when due to be paid
pursuant to the Order referred to below, but in any event on the Payment Date
next following receipt on a Business Day by the Insurer of (i) a certified copy
of a final, non-appealable order of a court or other body exercising
jurisdiction in such insolvency proceeding to the effect that the Indenture
Trustee or the Holder is required to return such Preference Amount paid during
the term of this Certificate Insurance Policy because such payments were avoided
as a preferential transfer or otherwise rescinded or required to be restored by
the Indenture Trustee or the Holder (the "Order"), (ii) a certificate by or on
behalf of the Indenture Trustee that the Order has been entered and is not
subject to any stay, (iii) an assignment, in form and substance satisfactory to
the Insurer, duly executed and delivered by the Indenture Trustee, irrevocably
assigning to the Insurer all rights and claims of the Indenture Trustee or the
Holder relating to or arising under the Agreement against the estate of the
Indenture Trustee or otherwise with respect to such Preference Amount and (iv) a
Notice of Nonpayment (attached hereto as Exhibit A) appropriately completed and
executed by the Indenture Trustee. Such payment shall be disbursed to the
receiver, conservator, debtor-in-possession or trustee in bankruptcy named in
the Order, and not to the Indenture Trustee or the Holder, as applicable,
directly, unless the Indenture Trustee or the Holder, as applicable, has made a
payment of the Preference Amount to the court or such receiver, conservator,
debtor-in-possession or trustee in bankruptcy named in the Order, in which case
the Insurer will pay the Indenture Trustee on behalf of the Holder, subject to
the delivery of (a) the items referred to in clauses (i), (ii), (iii) and (iv)
above to the Insurer and (b) evidence satisfactory to the Insurer that payment
has been made to such court or receiver, conservator, debtor-in-possession or
trustee in bankruptcy named in the Order.
The Insurer hereby agrees that if it shall be subrogated to the rights
of Holders by virtue of any Insured Payment under this Policy, no recovery of
such payment will occur unless the full amount of the Holders' allocable
distributions for such Payment Date can be made. In so doing, the Insurer does
not waive its rights to seek full payment of all Reimbursement Amounts owed to
it under the Agreement.
The terms and provisions of the Agreement constitute the instrument of
assignment referred to in the second paragraph of the face of this Policy.
A premium will be payable on this Policy on each Payment Date as
provided in Section 8.6(d)(ii) of the Indenture, beginning with the first
Payment Date, in an amount equal to the Premium.
<PAGE>
-5-
CLAIMS ARISING UNDER THE POLICY WOULD BE EXCLUDED FROM COVERAGE BY THE
CALIFORNIA INSURANCE GUARANTY ASSOCIATION ESTABLISHED PURSUANT TO THE LAWS OF
CALIFORNIA.
THE INSURANCE PROVIDED BY THE POLICY IS NOT COVERED BY THE
PROPERTY/CASUALTY INSURANCE SECURITY FUND SPECIFIED IN ARTICLE 76 OF THE NEW
YORK INSURANCE LAW.
The Policy to which this Endorsement is attached and of which it forms
a part is hereby amended to provide that there shall be no acceleration payment
due under the Policy unless such acceleration is at the sole option of the
Insurer.
Nothing herein contained shall be held to vary, alter, waive or extend
any of the terms, conditions, provisions, agreements or limitations of the above
mentioned Policy other than as above stated.
This Policy expires and terminates without any action on the part of
the Insurer or any other person on the date that is one year and one day
following the date on which the Notes have been paid in full.
This Policy is issued under and pursuant to, and shall be construed
under, the laws of the State of New York.
<PAGE>
IN WITNESS WHEREOF, the Insurer has caused this Endorsement to the
Policy to be signed by its duly authorized officers.
/s/ /s/ Jeff D. Nabi
- ----------------------------- ------------------------------
Assistant Secretary Vice President
<PAGE>
A-1
EXHIBIT A
TO THE CERTIFICATE GUARANTY INSURANCE POLICY
Policy No. AB0330BE
NOTICE OF NONPAYMENT AND DEMAND
FOR PAYMENT OF INSURED AMOUNTS
Date: [ ]
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: General Counsel
Reference is made to Certificate Guaranty Insurance Policy No.
AB0330BE (the "Policy") issued by Ambac Assurance Corporation ("Ambac"). Terms
capitalized herein and not otherwise defined shall have the meanings specified
in the Policy and the Indenture, as the case may be, unless the context
otherwise requires.
The Trustee hereby certifies as follows:
1. The Indenture Trustee is the Indenture Trustee under
the Indenture for the Holders.
2. The relevant Payment Date is [date].
3. Payment on the Notes in respect of the Payment Date
is due to be received on __________________ under the
Indenture in an amount equal to $___________________.
4. There is an Insured Amount of $______________________
in respect of the Notes, which amount is Due for
Payment pursuant to the terms of the Indenture.
5. The Indenture Trustee has not heretofore made a
demand for the Insured Amount in respect of the
Payment Date.
6. The Indenture Trustee hereby requests the payment of
the Insured Amount that is Due For Payment be made by
Ambac under the Policy and directs that
<PAGE>
A-2
payment under the Policy be made to the following
account by bank wire transfer of federal or other
immediately available funds in accordance with the
terms of the Policy to: __________________________
Indenture Trustee's account number.
7. The Indenture Trustee hereby agrees that, following
receipt of the Insured Amount from Ambac, it shall
(a) hold such amounts in trust and apply the same
directly to the distribution of payment on the Notes
when due; (b) not apply such funds for any other
purpose; (c) deposit such funds to the Collection
Account and not commingle such funds with other funds
held by Indenure Trustee and (d) maintain an accurate
record of such payments with respect to each
certificate and the corresponding claim on the Policy
and proceeds thereof.
By:
----------------------------
Trustee
Title:
-------------------------
(Officer)
<PAGE>
EXHIBIT 5.1
<TABLE>
<S> <C> <C>
TOBIN & TOBIN
A PROFESSIONAL CORPORATION
500 SANSOME STREET
EIGHTH FLOOR
PHILLIP R. POLLOCK SAN FRANCISCO, CALIFORNIA 94111 RICHARD TOBIN (1852-1887)
FACSIMILE (415) 433-3883 ROBERT TOBIN (1875-1889)
(415) 433-1400 CYRIL R. TOBIN (1905-1977)
</TABLE>
December 22, 1999
TO ALL PARTIES LISTED
ON SCHEDULE A
Re: GreenPoint Mortgage Funding, Inc./GreenPoint Mortgage Securities Inc./
GreenPoint Home Equity Loan Trust 1999-2 -
Corporate Matters
Ladies and Gentlemen:
We have acted as special counsel to GreenPoint Mortgage Funding, Inc.
(the "Company"), a New York corporation, GreenPoint Mortgage Securities Inc.
("GMSI"), a Delaware limited purpose corporation, and GreenPoint Home Equity
Loan Trust 1999-2 (the "Issuer" and, together with the Company and GMSI, the
"GreenPoint Parties"), a Delaware statutory business trust, in connection with
the transactions contemplated by (a) the Mortgage Loan Purchase Agreement, dated
as of December 1, 1999, between the Company and GMSI (the "Purchase Agreement"),
(b) the Trust Agreement, dated as of December 1, 1999, between GMSI and
Wilmington Trust Company, as owner trustee (the "Owner Trustee") (the "Trust
Agreement"), (c) the Indenture, dated as of December 1, 1999, between the Issuer
and Bank One, National Association, as Indenture Trustee (the "Indenture
Trustee") (the "Indenture"), (d) the Sale and Servicing Agreement, dated as of
December 1, 1999, among the Issuer, the Company as Servicer (in such capacity,
the "Servicer"), GMSI and the Indenture Trustee (the "Sale and Servicing
Agreement"), (e) the Management Agreement, dated as of December 1, 1999, between
the Company and the Issuer (the "Management Agreement"), (f) the Insurance and
Indemnity Agreement, dated as of December 22, 1999, among the Company, GMSI, the
Issuer, the Indenture Trustee and Ambac Assurance Corporation ("Ambac") (the
"Insurance Agreement"), (g) the letter agreement, dated December 22, 1999, from
the Company to Ambac regarding capitalized interest payments (the "Capitalized
Interest Letter"), and (h) the Underwriting Agreement, dated December 15, 1999,
among the Company, GMSI and Greenwich Capital Markets, Inc. (the "Underwriter")
(the "Underwriting Agreement"). The agreements described in (a) - (h) are
sometimes referred to herein as the "Transaction Documents." Capitalized terms
not otherwise defined herein have the meanings set forth in Annex A to the
Indenture.
Pursuant to the Purchase Agreement, the Company will convey to GMSI, as
of the Closing Date, without recourse, all its right, title and interest in, to
and under, whether then existing or thereafter created (i) each Initial Mortgage
Loan, including its Principal Balance (and any Additional Balances) and all
collections in respect thereof received on or after the Initial Cut-Off Date;
(ii)
<PAGE>
TOBIN & TOBIN
To All Parties Listed on Schedule A
December 22, 1999
Page 2
property that secured a Mortgage Loan that is acquired by foreclosure or deed in
lieu of foreclosure; (iii) the Company's rights under the hazard insurance
policies; (iv) any and all Subsequent Mortgage Loans (including any Additional
Balances related thereto) (the Subsequent Mortgage Loans and the Initial
Mortgage Loans, collectively, the "Mortgage Loans") and (v) all proceeds of the
foregoing. The Closing Date (with respect to the Initial Mortgage Loans and all
related property being conveyed) and the applicable Subsequent Transfer Date
(with respect to the Subsequent Mortgage Loans and all related property being
conveyed) are herein referred to collectively as the "Sale Date." The assets
described in clauses (i) through (v) above, from and after the Sale Date with
respect thereto, are herein referred to as the "Purchased Assets." As payment
for the Purchased Assets, GMSI will pay to the Company the Purchase Price.
The Issuer will be established, and the investor certificates
representing the entire beneficial ownership interest in the Issuer (the
"Certificates") will be issued, pursuant to the Trust Agreement. Pursuant to the
Sale and Servicing Agreement, GMSI will convey, among other things, without
recourse to the Issuer all its right, title and interest in, to and under the
Purchased Assets (the "Issuer Purchased Assets"), and will receive as payment
therefor the net cash proceeds from the sale of the Home Equity Loan
Asset-Backed Notes, Series 1999-2 (the "Asset-Backed Notes") and credit for an
additional capital contribution evidenced by the Certificates.
The Company will be the manager of the Issuer pursuant to the
Management Agreement, and will provide certain services pursuant thereto to the
Issuer in connection with the Issuer's obligations with respect to the Indenture
and the Asset-Backed Notes. The Indenture Trustee is the intended third party
beneficiary of the Management Agreement, and is entitled to enforce the rights
of the Issuer thereunder for the benefit of the Noteholders.
Pursuant to the Indenture, on the Closing Date the Issuer will pledge
to the Indenture Trustee, in trust for the benefit of the Noteholders and Ambac,
without recourse, all its right, title and interest in, to and under the Issuer
Purchased Assets and other property referred to in the Granting Clause thereof
(the "Indenture Collateral"). Thereupon, the Asset-Backed Notes in the aggregate
principal amount of $245,645,000 (the "Asset-Backed Notes"), consisting of
$193,275,000 Class A-1 Variable Rate Asset-Backed Notes, and $52,370,000 Class
A-2 Variable Rate Asset-Backed Notes, will be issued. The Issuer intends to sell
the Asset-Backed Notes in an underwritten public offering.
Pursuant to the Insurance Agreement, Ambac will issue an insurance
policy (the "Note Insurance Policy") with respect to the Asset-Backed Notes
guaranteeing irrevocably and unconditionally the payment of the Insured Payments
(as defined in the Insurance Agreement) to the Indenture Trustee on behalf of
the Noteholders.
Pursuant to the Sale and Servicing Agreement, the Company will be the
initial Servicer of the Mortgage Loans.
<PAGE>
TOBIN & TOBIN
To All Parties Listed on Schedule A
December 22, 1999
Page 3
Effective as of October 1, 1999, all the assets and liabilities of
Headlands Mortgage Company ("HMC"), a California corporation, were transferred
to the Company. In connection with such transfer, the stock of HMC's
wholly-owned subsidiary, Headlands Mortgage Securities Inc. ("HMSI"), has been
transferred to the Company and HMSI has been renamed GreenPoint Mortgage
Securities Inc.
In connection with our opinion, we have examined the following
documents:
1. the Purchase Agreement;
2. the Trust Agreement;
3. the Indenture;
4. the Sale and Servicing Agreement;
5. the Management Agreement;
6. the Insurance Agreement;
7. the Underwriting Agreement;
8. the Capitalized Interest Agreement;
9. the prospectus dated June 14, 1999 (the "Shelf Prospectus")
constituting a part of the registration statement on Form S-3
(file no. 333-79833) filed by HMSI with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as
amended, and the supplement thereto dated December 15, 1999
(the "Prospectus Supplement") relating to the offering of the
Asset-Backed Notes (the Shelf Prospectus as supplemented by
the Prospectus Supplement, collectively, the "Prospectus");
10. the Asset-Backed Notes;
11. certificates provided to us by officers of (a) the Company,
attached hereto as Exhibit A (the "Company's Certificate"),
and (b) GMSI, attached hereto as Exhibit B ("GMSI's
Certificate");
<PAGE>
TOBIN & TOBIN
To All Parties Listed on Schedule A
December 22, 1999
Page 4
12. unfiled copies of each financing statement listed on Schedule
1 naming (a) the Company as debtor and GMSI as secured party,
to be filed in the Office of the Secretary of State of the
State of California (such filing office, the "California
Filing Office" and such financing statement, the "Company
Financing Statement"), (b) GMSI as debtor and the Issuer as
secured party, to be filed in the California Filing Office
(such financing statement, the "GMSI Financing Statement"),
and (c) the Issuer as debtor and the Indenture Trustee as
secured party, to be filed in the California Filing Office and
in the Office of the Secretary of State of the State of
Delaware (such Delaware filing office, the "Delaware Filing
Office" and such financing statement, the "Issuer Financing
Statement");
13. an unfiled copy of an assignment listed on Schedule 1
assigning the GMSI Financing Statement (the "Assignment") to
the Indenture Trustee; and
14. the reports listed on Schedule 2 as to previously filed
Uniform Commercial Code ("UCC") financing statements against
the GreenPoint Parties and HMC (collectively, the "UCC Search
Report").
Items 1-10 above are referred to herein collectively as the "Specified
Documents." We have also examined originals or copies, certified or otherwise
identified to our satisfaction, of such records of the GreenPoint Parties and
such agreements, certificates of public officials, certificates of officers,
managers or other representatives of the GreenPoint Parties and others, and such
other documents, certificates and records as we have deemed necessary or
appropriate as a basis for the opinions set forth herein. As to any facts
material to the opinions expressed herein which were not independently
established or verified, we have relied upon oral or written statements and
representations of officers, managers and other representatives of the
GreenPoint Parties and others.
In our examination, we have assumed the legal capacity of all natural
persons, the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. In making our
examination of documents executed by parties other than the GreenPoint Parties,
we have assumed that such parties had the power, corporate or other, to enter
into and perform all obligations thereunder, and we have also assumed the due
authorization by all requisite action, corporate or other, and the valid
execution and delivery by such parties of such documents and the validity,
binding effect and enforceability thereof with respect to such parties.
<PAGE>
TOBIN & TOBIN
To All Parties Listed on Schedule A
December 22, 1999
Page 5
Unless otherwise indicated, reference in this opinion to:
(1) "New York UCC" shall mean the UCC as in effect on the date hereof
in the State of New York;
(2) "California UCC" shall mean the UCC as in effect on the date hereof
in the State of California;
(3) "Delaware UCC" shall mean the UCC as in effect on the date hereof
in the State of Delaware;
(4) "Applicable UCC" shall mean the New York UCC, the California UCC or
the Delaware UCC, as applicable;
(5) "Applicable Laws" shall mean the laws, rules and regulations of the
States of New York, California and Delaware and of the United States which, in
our experience, are normally applicable to the transactions contemplated by the
Transaction Documents, each as in effect on the date hereof;
(6) "Governmental Authorities" shall mean any New York, California,
Delaware or federal, executive, legislative, judicial, administrative or
regulatory body;
(7) "Governmental Approval" shall mean any consent, approval, license,
authorization or validation of, or filing, recording or registration with, any
Governmental Authority pursuant to Applicable Laws;
(8) "Applicable Orders" shall mean those orders, judgments or decrees,
if any, of Governmental Authorities pursuant to Applicable Laws;
(9) "Applicable Contracts" shall mean those agreements or instruments
(other than the Specified Documents) to which each of the GreenPoint Parties is
a party that are material to its business or operations, as identified to us in
the Company's Certificate or GMSI's Certificate, as the case may be;
(10) "Applicable Jurisdictions" shall mean all jurisdictions in which
the ownership or lease of property or the conduct of its business by each of the
GreenPoint Parties would require such GreenPoint Party to qualify to do business
as a foreign corporation, except where the failure to so qualify would not be
reasonably likely to lead to a material adverse effect upon its business or
operations;
(11) "Credit Line Agreement" shall mean, with respect to each Mortgage
Loan which is a
<PAGE>
TOBIN & TOBIN
To All Parties Listed on Schedule A
December 22, 1999
Page 6
HELOC Mortgage Loan, a credit line agreement in the form of Exhibit C hereto
pursuant to which the related Mortgagor agrees to pay the indebtedness evidenced
thereby secured by the related Mortgage; and
(12) "Closed-End Note" shall mean, with respect to each Mortgage Loan
which is a Closed End Mortgage Loan, a note in the form of Exhibit D, attached
hereto pursuant to which the related Mortgagor agrees to pay the indebtedness
evidenced thereby which is secured by the related Mortgage.
Members of the firm are admitted to the bar in the States of California
and New York, and we do not express any opinion as to the laws of any other
jurisdictions other than (i) the corporate and statutory business trust laws of
the State of Delaware, and (ii) the laws of the United States to the extent
specifically addressed herein. In addition, our security interest opinions in
Part B hereof are limited to Article 9 of the Applicable UCC and therefore such
opinions do not address (i) laws of jurisdictions other than New York,
California and Delaware, and the laws of New York, California and Delaware
except for Article 9 of the Applicable UCC, and (ii) collateral of a type not
subject to Article 9 of the Applicable UCC. With your permission, we have
rendered our opinions with respect to the Delaware UCC based upon published
compilations thereof.
A. General Matters
Based upon the foregoing and subject to the qualifications set forth
herein, we are of the opinion that:
1. The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of New York. GMSI has
been duly organized and is validly existing as a limited purpose corporation in
good standing under the laws of the State of Delaware and is duly qualified as a
foreign corporation in good standing in the State of California. The Issuer has
been duly organized and is validly existing as a statutory business trust in
good standing under the laws of the State of Delaware. Each GreenPoint Party has
requisite corporate or other power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is
currently conducted. Each GreenPoint Party is duly qualified to do business as a
foreign corporation in good standing in all Applicable Jurisdictions.
2. Each GreenPoint Party (a) has all necessary corporate or other power
and authority (i) to execute and deliver the Specified Documents to which it is
a party, and (ii) to carry out the terms of such Specified Documents, and (b)
has duly authorized by all necessary corporate or other action the execution,
delivery and performance of the Specified Documents to which it is a party.
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3. The execution and delivery by each GreenPoint Party of the Specified
Documents to which it is a party and the performance by each GreenPoint Party of
its obligations under each such Specified Document, each in accordance with its
terms, will not (a) conflict with its Trust Agreement, its certificate of
incorporation or its bylaws, as applicable, (b) to the best of our knowledge,
constitute a violation or default under any Applicable Contract, Credit Line
Agreement or Closed-End Note, (c) to the best of our knowledge, cause the
creation or imposition of any lien upon any of the property of any GreenPoint
Party pursuant to any Applicable Contract, or (d) render unenforceable the
obligations of any Mortgagor to make payments under any Credit Line Agreement or
Closed-End Note.
4. Neither the execution, delivery or performance by any GreenPoint
Party of any Specified Document to which it is a party nor the compliance by any
such GreenPoint Party with the terms and provisions of such Specified Document
will contravene any provision of any Applicable Law.
5. No Governmental Approval which has not been obtained or taken and is
not in full force and effect is required to authorize or is required in
connection with the execution, delivery or performance of any Specified Document
by any GreenPoint Party, except the filing of the Company Financing Statement,
the GMSI Financing Statement and the Issuer Financing Statement in the
California Filing Office and the filing of the Issuer Financing Statement in the
Delaware Filing Office.
6. Neither the execution, delivery or performance by any GreenPoint
Party of its obligations under a Specified Document to which it is a party nor
compliance by such GreenPoint Party with the terms thereof will contravene any
Applicable Order against such GreenPoint Party.
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7. Each GreenPoint Party has duly executed and delivered the Specified
Documents to which it is a party, and each such Specified Document constitutes a
legal, valid and binding obligation of such GreenPoint Party, enforceable
against such GreenPoint Party in accordance with its terms.
8. None of the GreenPoint Parties nor the trust fund created by the
Indenture is an "investment company" or "controlled by" or under the "control"
of an investment company as such terms are defined in the Investment Company Act
of 1940, as amended.
9. The Company owns all of the outstanding common stock of GMSI. GMSI
owns the entire beneficial interest in the Issuer.
In addition, we have reviewed the Prospectus and, although we are not
passing upon, and do not assume any responsibility for, the accuracy,
completeness or fairness of the statements contained in the Prospectus and have
made no independent check or verification thereof, on the basis of our review
and discussions with representatives of the GreenPoint Parties regarding the
transactions contemplated by the Prospectus, no facts have come to our attention
that have led us to believe that the portions of the Prospectus describing the
GreenPoint Parties or the Mortgage Loans presented under the headings "The Trust
Property," "GreenPoint Mortgage Funding, Inc.," "The Company's Mortgage Loan
Program," "Description of the Mortgage Loans" and "Certain Provisions of the
Sale and Servicing Agreement," as of the date of the Prospectus and the date
hereof, contained an untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that we express
no opinion or belief with respect to the financial statements, tables, schedules
and other financial information included therein.
Our opinions expressed herein are subject to the following additional
limitations, assumptions and qualifications:
(a) enforcement may be subject to or limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other similar laws relating to
creditors' rights generally, and (ii) general principles of equity, including
concepts of materiality, reasonableness, good faith and fair dealing (regardless
of whether enforcement is considered in a proceeding in equity or at law);
(b) certain of the remedial provisions, including waivers, with respect
to the exercise of remedies against the collateral contained in the Transaction
Documents may be unenforceable in whole or in part, but the inclusion of such
provisions does not affect the validity of any of the Transaction Documents,
taken as a whole, and each of the Transaction Documents, taken as a whole,
together with applicable law, contains adequate provisions for the practical
realization of the benefits of the security described therein;
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(c) we have assumed that each Specified Document constitutes the legal,
valid and binding obligation of each party to such agreement (other than the
GreenPoint Parties), enforceable against each such party in accordance with its
terms;
(d) we have assumed that Ambac is not a "broker" or "dealer" as defined
in the Securities and Exchange Act of 1934, as amended;
(e) we express no opinion as to the effect on the opinions herein
stated of (i) the compliance or noncompliance of any party (other than the
GreenPoint Parties) to the Specified Documents with any state or federal or
other laws or regulations applicable to them, or (ii) the legal or regulatory
status or the nature of the business of each such party (other than the
GreenPoint Parties);
(f) we express no opinion as to the enforceability of any rights to
contribution or indemnification, or waivers of or agreements not to assert legal
rights, provided for in the Specified Documents which are violative of the
public policy underlying any law, rule or regulation (including federal or state
securities laws, rules or regulations);
(g) we express no opinion as to whether the execution, delivery or
performance by any GreenPoint Party of any Specified Document will constitute a
violation of or a default under any covenant, restriction or provision with
respect to financial ratios or tests or any aspect of the financial condition or
results of operations of any such GreenPoint Party; and
(h) we express no opinion as to the enforceability of any provision in
the Transaction Documents with respect to governing law to the extent that it
purports to affect the choice of law governing perfection and the effect of
perfection or nonperfection of security interests.
B. UCC Matters
Although the Purchase Agreement specifically recites the intent of the
parties thereto that the conveyance of the Purchased Assets pursuant thereto be
treated as a sale and not a secured financing, the Purchase Agreement further
provides that, in the event the Purchased Assets are held by a court to continue
to be property of the Company, the transfer of the Purchased Assets shall be
deemed to be a grant by the Company to GMSI of a security interest in all of the
Company's right, title and interest in and to the Purchased Assets. Similarly,
although the Sale and Servicing Agreement specifically recites the intent of the
parties thereto that the conveyance of the Issuer Purchased Assets pursuant
thereto be treated as a sale and not a secured financing, the Sale and Servicing
Agreement further provides that, in the event the Issuer Purchased Assets are
held by a court to continue to be property of GMSI, the
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transfer of the Issuer Purchased Assets shall be deemed to be a grant by GMSI to
the Issuer of a security interest in all of GMSI's right, title and interest in
and to the Issuer Purchased Assets. The Indenture provides for the grant by the
Issuer to the Indenture Trustee of a security interest in all of the Issuer's
right, title and interest in and to the Indenture Collateral. The term
"Collateral" is used hereafter to refer to the Purchased Assets and the proceeds
thereof when referring to the transaction between the Company and GMSI pursuant
to the Purchase Agreement; to the Issuer Purchased Assets and the proceeds
thereof when referring to the transaction between GMSI and the Issuer pursuant
to the Sale and Servicing Agreement; and to the Indenture Collateral when
referring to the Indenture.
You have asked for our opinions with respect to the security interests
in the Collateral. We note that the transfers pursuant to the Purchase Agreement
and the Sale and Servicing Agreement are characterized as a sale, and we have
delivered to you our separate "true sale" opinion dated the date hereof with
respect to such characterization of the transfer from the Company to GMSI
pursuant to the Purchase Agreement. We call your attention to Part C of this
opinion for its discussion of the steps necessary to properly undertake a sale
transaction of this kind.
We call to your attention that under the Applicable UCC, events
occurring subsequent to the date hereof may affect any security interest subject
to the Applicable UCC including, but not limited to, factors of the type
identified in Section 9-306 with respect to proceeds; Section 9-402 with respect
to changes in the location of the collateral and the location of the debtor;
Section 9-316 with respect to subordination agreements; Section 9-403 with
respect to continuation statements; and Sections 9-307, 9-308 and 9-309 with
respect to subsequent purchasers of collateral. In addition, actions taken by
the secured party (e.g., voluntarily releasing, assigning or subordinating a
security interest, delivering possession of the collateral to the debtor or
another person) may affect any security interest subject to the Applicable UCC.
Based on the foregoing and subject to the qualifications set forth
herein, we are of the opinion that:
1. (a) The Purchase Agreement is effective to create, in favor of
GMSI, a valid security interest under the Applicable UCC in all of the Company's
right, title and interest in, to and under the Collateral to the extent such
collateral constitutes property subject to Article 9 of the Applicable UCC.
(b) The Sale and Servicing Agreement is effective to create,
in favor of the Issuer, a valid security interest under the Applicable UCC in
all of GMSI's right, title and interest in, to and under the Collateral to the
extent such collateral constitutes property subject to Article 9 of the
Applicable UCC.
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(c) The Indenture is effective to create, in favor of the
Indenture Trustee, a valid security interest under the Applicable UCC in all of
the Issuer's right, title and interest in, to and under the Collateral to the
extent such collateral constitutes property subject to Article 9 of the
Applicable UCC.
2. The Closed-End Notes constitute "instruments" as defined in Article
9 of the Applicable UCC. As such:
(a) when the Closed-End Notes are delivered by the Company to
GMSI or its designee, duly endorsed in blank without recourse, the security
interest referred to in paragraph 1(a) above will constitute a fully perfected
first priority security interest under the Applicable UCC in all right, title
and interest of the Company therein in the Closed-End Notes and in the Mortgage
Loans evidenced thereby and all proceeds thereof;
(b) when the Closed-End Notes are delivered by GMSI to the
Issuer or its designee, duly endorsed in blank without recourse, the security
interest referred to in paragraph 1(b) above will constitute a fully perfected
first priority security interest under the Applicable UCC in all right, title
and interest of GMSI in the Closed-End Notes and in the Mortgage Loans evidenced
thereby and all proceeds thereof; and
(c) when the Closed-End Notes are delivered by the Issuer to
the Indenture Trustee or its designee, duly endorsed in blank without recourse,
the security interest referred to in paragraph 1(c) above will constitute a
fully perfected first priority security interest under the Applicable UCC in all
right, title and interest of the Issuer in the Closed-End Notes and in the
Mortgage Loans evidenced thereby and all proceeds thereof.
3. The Credit Line Agreements constitute either "instruments" or
"general intangibles" as defined in Article 9 of the Applicable UCC. To the
extent that the Credit Line Agreements constitute "instruments" as defined in
Article 9 of the Applicable UCC:
(a) when the Credit Line Agreements are delivered by the
Company to GMSI or its designee, duly endorsed in blank without recourse, the
security interest referred to in paragraph 1(a) above will constitute a fully
perfected first priority security interest under the Applicable UCC in all
right, title and interest of the Company therein in the Credit Line Agreements
and in the Mortgage Loans evidenced thereby and all proceeds thereof;
(b) when the Credit Line Agreements are delivered by GMSI to
the Issuer or its designee, duly endorsed in blank without recourse, the
security interest referred to in paragraph 1(b) above will constitute a fully
perfected first priority security interest under the
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Applicable UCC in all right, title and interest of GMSI in the Credit Line
Agreements and in the Mortgage Loans evidenced thereby and all proceeds thereof;
and
(c) when the Credit Line Agreements are delivered by the
Issuer to the Indenture Trustee or its designee, duly endorsed in blank without
recourse, the security interest referred to in paragraph 1(c) above will
constitute a fully perfected first priority security interest under the
Applicable UCC in all right, title and interest of the Issuer in the Credit Line
Agreements and in the Mortgage Loans evidenced thereby and all proceeds thereof.
4. To the extent that the Credit Line Agreements and other Collateral
constitute "general intangibles" as defined in Article 9 of the Applicable UCC
(collectively, together with the proceeds thereof, the "Filing Collateral"):
(a) when the Company Financing Statement is filed in the
California Filing Office, the security interest referred to in paragraph 1(a)
above will constitute a fully perfected security interest under the Applicable
UCC in all right, title and interest of the Company in, to and under such Filing
Collateral and, under the Applicable UCC, no other security interest of any
other creditor of the Company is equal or prior to the security interest of GMSI
in such Filing Collateral;
(b) when the Company Financing Statement has been filed as
specified in paragraph 4(a) above and the GMSI Financing Statement is filed in
the California Filing Office, the security interest referred to in paragraph
1(b) above will constitute a fully perfected security interest under the
Applicable UCC in all right, title and interest of GMSI in, to and under such
Filing Collateral and, under the Applicable UCC, no other security interest of
any other creditor of GMSI is equal or prior to the security interest of the
Issuer in such Filing Collateral; and
(c) when the Company Financing Statement and the GMSI
Financing Statement have been filed as specified in paragraphs 4(a) and 4(b)
above, the Issuer Financing Statement is filed in the California Filing Office
and in the Delaware Filing Office and the Assignment is filed in the California
Filing Office, the security interest referred to in paragraph 1(c) above will
constitute a fully perfected security interest under the Applicable UCC in all
right, title and interest of the Issuer in, to and under such Filing Collateral
and, under the Applicable UCC, no other security interest of any other creditor
of the Issuer is equal or prior to the security interest of the Indenture
Trustee in such Filing Collateral.
5. The UCC Search Report sets forth the proper filing offices and the
proper debtors necessary to identify those Persons who have on file in the
California Filing Office or the Delaware Filing Office financing statements
covering the Filing Collateral as of the dates and times specified on
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Schedule 2. The UCC Search Report identifies no Person who has filed in the
California Filing Office or the Delaware Filing Office a financing statement
describing the Filing Collateral prior to the effective dates of the UCC Search
Report.
Our opinions with respect to the security interests in the Collateral
are subject to the following qualifications:
(a) we have assumed that the Collateral exists and that the Company,
GMSI and the Issuer have sufficient rights in the Collateral for the security
interests of GMSI, the Issuer and the Indenture Trustee to attach, and we
express no opinion as to the nature or extent of the Company's, GMSI's or the
Issuer's rights in, or title to, any of the Collateral;
(b) we have assumed that there are no agreements between the Company,
GMSI or the Issuer and any account debtor prohibiting, restricting or
conditioning the assignment of any portion of the Collateral;
(c) we call to your attention that the security interests of GMSI, the
Issuer and the Indenture Trustee may be subject to the rights of account
debtors, claims and defenses of account debtors and the terms of agreements with
account debtors;
(d) in the case of any Collateral which is itself secured by other
property, we express no opinion with respect to the Company's, GMSI's or the
Issuer's rights in and to such underlying property;
(e) we have assumed that (i) each Credit Line Agreement conforms to the
specimen Credit Line Agreement attached as Exhibit C hereto and is represented
by only one original document, and (ii) each Closed-End Note conforms to the
specimen Closed-End Note attached as Exhibit D hereto and is represented by only
one original document;
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(f) we have assumed that each of the Company, GMSI and the Issuer has
notified the Indenture Trustee of GMSI's and the Issuer's security interest in
the Collateral;
(g) with respect to paragraphs 2 and 3 in this Part B, we express no
opinion with respect to the priority of the security interest of GMSI, the
Issuer or the Indenture Trustee in the Collateral against any of the following:
(i) pursuant to Section 9-301(1) of the Applicable UCC, a lien creditor or bulk
purchaser who attached or levied prior to the perfection of the security
interests; (ii) pursuant to Section 9-301(4) of the Applicable UCC, a lien
creditor to the extent that provision limits the priority afforded future
advances; (iii) pursuant to Section 9-312(7) of the Applicable UCC, another
secured creditor to the extent that provision limits the priority afforded
future advances; (iv) pursuant to Sections 9-312(3) and (4) of the Applicable
UCC, a "purchase money security interest" as such term is defined in Section
9-107 of the Applicable UCC; (v) pursuant to Section 9-312(6) of the Applicable
UCC, another secured party with a perfected security interest in other property
of the Company, GMSI or the Issuer to the extent the Collateral is proceeds of
such other creditor's property; (vi) pursuant to Sections 9-104, 4-208 or 4-210
and 9-302(1) of the Applicable UCC, another creditor not required to file a
financing statement to perfect its interest; and (vii) pursuant to Section 9-304
of the Applicable UCC, in the case of instruments, certificated securities and
documents, a security interest perfected for twenty-one days without possession;
(h) we have assumed that each Credit Line Agreement and each Closed-End
Note is endorsed in blank and that the Closed-End Notes and the Credit Line
Agreements are being delivered to the Indenture Trustee and will be held by it
at its processing center in Pasadena, California;
(i) we have assumed that the Indenture Trustee has not received notice
of the interest of any other person in any of the Collateral prior to receipt of
notification from the Company, GMSI and the Issuer of GMSI's, the Issuer's and
the Indenture Trustee's security interest in such Collateral;
(j) we have assumed that the chief executive offices of each of the
Company, HMC and GMSI are and will be in Larkspur, California, and the chief
executive office of the Issuer is and will be in Wilmington, Delaware or
Larkspur, California;
(k) we call to your attention that the priority of the security
interests in proceeds is subject to Section 9-306 of the Applicable UCC and, in
the case of certain types of proceeds, other parties such as holders in due
course, bona fide purchasers, holders of negotiable documents and buyers in the
ordinary course of business may obtain superior priority;
(l) we call to your attention that in the case of collections in
respect of the Credit Line Agreements and the Closed-End Notes, security
interests therein will be perfected only if possession thereof is obtained or
other appropriate action is taken in accordance with the
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provisions of the Applicable UCC or other applicable law;
(m) with respect to paragraph 4 in this Part B, we express no opinion
with respect to the priority of the security interest of GMSI, the Issuer or the
Indenture Trustee in the Filing Collateral against any of the following: (i)
pursuant to Section 9-301(1) of the Applicable UCC, a lien creditor or bulk
purchaser who attached or levied prior to the perfection of the security
interests; (ii) pursuant to Section 9-301(4) of the Applicable UCC, a lien
creditor to the extent that provision limits the priority afforded future
advances; (iii) pursuant to Section 9-312(7) of the Applicable UCC, another
secured creditor to the extent that provision limits the priority afforded
future advances; (iv) pursuant to Sections 9-103(1)(d) or 3(e) and Section
9-312(1), a security interest perfected under the laws of another jurisdiction
to the extent the Company, GMSI or the Issuer was located in such jurisdiction
within four months prior to the date of the perfection of the security
interests; (v) pursuant to Sections 9-312(3) and (4) of the Applicable UCC, a
"purchase money security interest" as such term is defined in Section 9-107 of
the Applicable UCC; (vi) pursuant to Section 9-312(6) of the Applicable UCC,
another secured party with a perfected security interest in other property of
the Company, GMSI or the Issuer to the extent the Filing Collateral is proceeds
of such other creditor's property; (vii) pursuant to Sections 9-104, 4-208 or
4-210 and 9-302(1) of the Applicable UCC, another creditor not required to file
a financing statement to perfect its interest; and (viii) pursuant to Sections
9-401(2) and (3) of the Applicable UCC, the security interest of a creditor who
filed a financing statement based on a prior or incorrect location of the
Company, GMSI or the Issuer to the extent such other financing statement would
be effective under Section 9-401(2) or (3) of the Applicable UCC; and
(n) we have assumed that (i) all relevant financing statements in which
the Company, GMSI or the Issuer is named as debtor have been properly filed,
indexed and recorded in the California Filing Office or the Delaware Filing
Office, as the case may be, and are identified in the UCC Search Report, (ii) no
financing statement naming the Company, HMC, GMSI or the Issuer as debtor was
filed in the California Filing Office between the effective date of the UCC
Search Report and the date of the filing of the Company Financing Statement, the
GMSI Financing Statement and the Issuer Financing Statement in the California
Filing Office and (iii) no financing statement naming the Issuer as debtor was
filed in the Delaware Filing Office between the effective date of the UCC Search
Report and the date of the filing of the Issuer Financing Statement in the
Delaware Filing Office.
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C. Transfer Not Subject to the UCC
Subject to the qualifications set forth herein, we are of the opinion
that:
1. To the extent that the Closed-End Notes and the Credit Line
Agreements constitute "instruments" as defined in Article 9 of the New York UCC
and to the extent that the Credit Line Agreements and other property conveyed by
the Company and GMSI pursuant to the Purchase Agreement and the Sale and
Servicing Agreement, respectively (the "Other Property") constitute "general
intangibles" as defined in Article 9 of the New York UCC, the laws of the State
of New York govern the enforceability as against third parties of (a) GMSI's
ownership interest under the Purchase Agreement in the Closed-End Notes, the
Credit Line Agreements and the Mortgage Loans evidenced thereby, and in the
Other Property, and (b) the Issuer's ownership interest under the Sale and
Servicing Agreement in the Closed-End Notes, the Credit Line Agreements and the
Mortgage Loans evidenced thereby, and in the Other Property.
2. If each of the Purchase Agreement and the Sale and Servicing
Agreement effects a sale to GMSI and the Issuer, respectively, of the Closed-End
Notes, the Credit Line Agreements and the Other Property and assuming that the
Credit Line Agreements and the Other Property constitute "general intangibles"
as defined in Article 9 of the New York UCC, GMSI or the Issuer, as applicable,
has acquired all right, title and interest of the Company or GMSI, as the case
may be, in the Credit Line Agreements and the related Mortgage Loans and the
Other Property (including the proceeds thereof). We note, however, that unless
the obligor in respect of a Credit Line Agreement or Other Property, as
applicable, has received notice of such sale, bona fide payments made by such
obligor to the Company or GMSI or to a subsequent assignee of such Credit Line
Agreement or Other Property, as applicable, as to which the obligor has received
notice of such assignment, will discharge such obligor's obligations to the
extent of such payment, and such payment will be recoverable only from the
Company or GMSI or such assignee. Assuming the Closed-End Notes and the Credit
Line Agreements are "instruments" as defined in Article 9 of the New York UCC,
the transfer of such Closed-End Notes, Credit Line Agreements and the related
Mortgage Loans would be effected upon delivery of possession to GMSI or the
Issuer, as applicable.
With respect to the Credit Line Agreements identified in the Purchase
Agreement or the Sale and Servicing Agreement, as applicable, or the Additional
Balances arising under such Credit Line Agreements, constituting "general
intangibles" as defined in Article 9 of the New York UCC, while there is no case
precisely on point, based upon our review of relevant case law authority in New
York, including Stathos v. Murphy, 26 App. Div. 2d 500, 276 N.Y.Supp. 2d 727,
aff'd 19 N.Y.2d 883, 281 N.Y. Supp. 2d 81 (1967), and the principles set forth
in Restatement of Contracts 2d 321 (1981), the sale of any such Credit Line
Agreements or Additional Balances, as applicable, and the proceeds thereof,
occurring after the date of the execution and delivery of the Purchase Agreement
or the Sale
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and Servicing Agreement, as applicable, would be deemed to occur as of the date
of the execution and delivery of the Purchase Agreement or the Sale and
Servicing Agreement, as applicable.
For purposes of this opinion, we express no opinion as to any
Closed-End Note, Credit Line Agreement or Other Property not in existence on the
date hereof.
This opinion is expressly subject to there being no material change in
the statutory or decisional law, and there being no additional facts of which we
are not aware that would materially affect the validity of the assumptions set
forth herein (and we are not aware of any such material facts).
This opinion may be relied upon solely by the persons or entities to
which it is addressed, and no other person or entity is entitled to rely hereon
without our prior written consent.
Very truly yours,
/s/ Tobin & Tobin
<PAGE>
SCHEDULE A
GreenPoint Mortgage Funding, Inc.
1100 Larkspur Landing Circle
Suite 101
Larkspur, CA 94939
Moody's Investors Service, Inc.
99 Church Street
New York, NY 10007
Standard & Poor's Corporation
26 Broadway, 15th Floor
New York, NY 10004
Ambac Assurance Corporation
1 State Street, 17th Floor
New York, NY 10004
Bank One, National Association, as Indenture Trustee
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
<PAGE>
SCHEDULE 1
UCC FINANCING STATEMENTS; ASSIGNMENT
<PAGE>
SCHEDULE 2
UCC SEARCH REPORT
<PAGE>
Exhibit A - Corporate
GREENPOINT MORTGAGE FUNDING, INC.
OFFICER'S CERTIFICATE
I, Gilbert J. MacQuarrie, the duly appointed and acting Executive Vice
President of GreenPoint Mortgage Funding, Inc. (the "Company"), the Manager of
GreenPoint Home Equity Loan Trust 1999-2 (the "Issuer") under the Management
Agreement dated as of December 1, 1999 between the Company and the Issuer, do
hereby certify as follows:
1. The representations and warranties of the Company and the Issuer set
forth in (a) the Mortgage Loan Purchase Agreement, dated as of December 1, 1999,
between the Company and GreenPoint Mortgage Securities Inc. ("GMSI"), (b) the
Indenture, dated as of December 1, 1999, between the Issuer and Bank One,
National Association, as Indenture Trustee (the "Indenture Trustee"), (c) the
Sale and Servicing Agreement, dated as of December 1, 1999, among the Issuer,
the Company, GMSI and the Indenture Trustee, (d) the Insurance and Indemnity
Agreement, dated as of December 22, 1999, among the Company, GMSI, the Issuer,
the Indenture Trustee and Ambac Assurance Corporation, and (e) the Underwriting
Agreement, dated December 15, 1999 among the Company, GMSI and Greenwich Capital
Markets Inc. are accurate and complete on and as of the date hereof with the
same effect as though such representations and warranties had been made on and
as of the date hereof.
2. In October, 1999, all the assets and liabilities of Headlands
Mortgage Company ("HMC"), a California corporation, were transferred to the
Company.
3. The Company is in compliance with all the terms and provisions set
forth in the Mortgage Loan Warehousing Agreement, between GreenPoint Bank, as
Lender, and the Company, as Borrower, dated as of March 31, 1999, and various
Master Repurchase Agreements between the Company and Bear Stearns Home Equity
Loan Trust, Credit Suisse First Boston Mortgage Capital LLC, Paine Webber Real
Estate Securities, Inc., Greenwich Financial Products, Inc. and DLJ Mortgage
Capital, Inc, respectively, each as amended to date (each of the foregoing, an
"Applicable Contract"), and no event of defaults or potential default (as those
terms are defined in the afore-mentioned Applicable Contracts) has occurred and
is continuing. There are no other agreements or instruments, nor any indenture,
to which the Company is a party or is bound with respect to which the execution
and delivery of the agreements identified in Paragraph 1 above or the
fulfillment of the terms thereof or the consummation of the transactions
contemplated thereby would conflict, result in a breach or violation or
constitute a default.
4. There are no agreements or instruments, nor any indenture, to which
the Issuer is a party or is bound with respect to which the execution and
delivery of the agreements identified in Paragraph 1 above or the fulfillment of
the terms thereof or the consummation of the transactions contemplated thereby
would conflict, result in a breach or violation or constitute a default.
In Witness Whereof, I have hereunto executed this Certificate this 22nd
day of December, 1999.
GREENPOINT MORTGAGE FUNDING, INC.
By
---------------------------------
Gilbert J. MacQuarrie
Executive Vice President
<PAGE>
Exhibit B - Corporate
GREENPOINT MORTGAGE SECURITIES INC.
OFFICER'S CERTIFICATE
I, Gilbert J. MacQuarrie, a duly appointed and acting Vice President of
GreenPoint Mortgage Securities Inc. ("GMSI"), do hereby certify as follows:
1. The representations and warranties of GMSI set forth in (a) the
Mortgage Loan Purchase Agreement, dated as of December 1, 1999, between
GreenPoint Mortgage Funding, Inc. (the "Company") and GMSI, (b) the Trust
Agreement, dated as of December 1, 1999, between GMSI and Wilmington Trust
Company, as owner trustee, (c) the Sale and Servicing Agreement, dated as of
December 1, 1999, among GreenPoint Home Equity Loan Trust 1999-2 (the "Issuer"),
the Company, GMSI and Bank One, National Association, as Indenture Trustee (the
"Indenture Trustee"), (d) the Insurance and Indemnity Agreement, dated as of
December 22, 1999, among the Company, GMSI, the Issuer, the Indenture Trustee
and Ambac Assurance Corporation, and (e) the Underwriting Agreement, dated
December 15, 1999, among the Company, GMSI and Greenwich Capital Markets Inc.
(the "Underwriter") are accurate and complete on and as of the date hereof with
the same effect as though such representations and warranties had been made on
and as of the date hereof.
2. In October, 1999, all the assets and liabilities of Headlands
Mortgage Company ("HMC"), a California corporation, were transferred to the
Company. In connection with such transfer, the stock of HMC's wholly-owned
subsidiary, Headlands Mortgage Securities Inc. ("HMSI"), was transferred to the
Company and HMSI was renamed GMSI.
3. GMSI is in compliance with all the terms and provisions set forth in
(a) the Purchase Agreement, dated August 1, 1997, among HMSI, HMC and the
Underwriter, (b) the Yield Maintenance Agreement, dated August 1, 1997, among
HMSI, HMC and The First National Bank of Chicago ("TFNBC"), (c) the Purchase
Agreement, dated March 25, 1998, among HMSI, HMC and the Underwriter, and (d)
the Yield Maintenance Agreement, dated March 25, 1998, among HMSI, HMC and TFNBC
(collectively, the "Applicable Contracts") and no event of default or potential
default (as those terms are defined in the afore-mentioned Applicable Contracts)
has occurred and is continuing. There are no other agreements or instruments,
nor any indenture, to which GMSI is a party or is bound with respect to which
the execution and delivery of the agreements described in Paragraph 1 above or
the fulfillment of the terms thereof or the consummation of the transactions
contemplated thereby would conflict, result in a breach or violation or
constitute a default.
In Witness Whereof, I have hereunto executed this Certificate this 22nd
day of December, 1999.
GREENPOINT MORTGAGE SECURITIES INC.
By
---------------------------------
Gilbert J. MacQuarrie
Vice President
<PAGE>
Exhibit C
Form of Credit Line Agreement
<PAGE>
Exhibit D
Form of Closed-End Note
<PAGE>
EXHIBIT 8.1
December 22, 1999
To the Addressees Listed
on Schedule I hereto
Re: GreenPoint Home Equity Loan Trust 1999-2
Variable Rate Asset-Backed Notes Series 1999-2
Ladies and Gentlemen:
We have acted as special tax counsel in connection with the
issuance and delivery of the certain asset-backed notes denominated GreenPoint
Home Equity Loan Trust 1999-2, Variable Rate Asset-Backed Notes Series 1999-2,
(the "Notes") pursuant to an Indenture dated as of December 1, 1999 (the
"Indenture) between GreenPoint Home Equity Loan Trust 1999-2 (the "Trust") and
Bank One, National Association, as Indenture Trustee (the "Indenture Trustee").
As special tax counsel, we have examined such documents and
relied upon such information as we have deemed appropriate for the purposes of
rendering the opinions set forth below, including the following: (a) a
Prospectus dated June 14, 1999 and a Prospectus Supplement dated December 15,
1999 (together the "Prospectus") with respect to the Notes, (b) an executed copy
of the Indenture and the exhibits attached thereto, and (c) certain
representations made to us by the Underwriter and the Sponsor regarding the
economic substance of the transaction.
We have examined the question of whether the Notes will be
treated as indebtedness for federal income tax purposes. Our analysis is based
on provisions of the Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder as in effect on the date hereof and on
existing judicial and administrative interpretations thereof. These authorities
are subject to change and to differing interpretations, which could apply
retroactively. The opinion of special tax counsel is not binding on the courts
or the Internal Revenue Service ("IRS").
In general, whether a transaction constitutes the issuance of
indebtedness for federal income tax purposes is a question of fact, the
resolution of which is based primarily upon the economic substance of the
instruments and the transaction pursuant to which they are issued rather than
the form of the transaction or the manner in which the instruments are labeled.
The IRS and the courts have set forth various factors to be taken into account
in determining whether or not a transaction constitutes the issuance of
indebtedness for federal income tax purposes, which we have reviewed as they
apply to this transaction.
<PAGE>
Based on the foregoing, and such legal and factual
investigations as we have deemed appropriate, we are of the opinion that (a) for
federal income tax purposes the Notes will be treated as indebtedness because
(i) the characteristics of the transaction strongly indicate that in economic
substance, the Notes are indebtedness, and (ii) the parties have stated
unambiguously their intention to treat the Notes as indebtedness for tax
purposes and (b) the trust will not be treated as an association (or a publicly
traded partnership) taxable as a corporation or a taxable mortgage pool.
Capitalized terms used in this opinion letter and not defined
herein shall have their respective meanings as set forth in the Indenture.
We express no opinion on any matter not discussed in this
letter. This opinion letter is rendered as of the Closing Date, at the request
of the Sponsor, for the sole benefit of each addressees hereof, and no other
person or entity is entitled to rely hereon without our prior written consent.
Copies of this opinion letter may not be furnished to any other person or
entity, nor may any portion of this opinion letter be quoted, circulated or
referred to in any other document, without our prior written consent.
Very truly yours,
/s/ Dewey Ballantine LLP
2
<PAGE>
Schedule I
GreenPoint Mortgage Funding, Inc.
700 Larkspur Landing Circle
Larkspur, California 94939
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 60830
Ambac Assurance Corporation
One State Street Plaza
New York, NY 10004
Bank One, National Association
One First National Plaza, Suite 0126
Chicago, IL 60670-0126
<PAGE>
EXHIBIT 10.1
AMBAC ASSURANCE CORPORATION
and
GREENWICH CAPITAL MARKETS, INC.
INDEMNIFICATION AGREEMENT
GREENPOINT HOME EQUITY LOAN TRUST 1999-2
Dated as of December 15, 1999
<PAGE>
TABLE OF CONTENTS
(This Table of Contents is for convenience of reference only and shall
not be deemed to be part of this Indemnification Agreement. All capitalized
terms used in this Indemnification Agreement and not otherwise defined shall
have the meanings set forth in Article I of this Indemnification Agreement.)
Page
----
Section 1. Defined Terms............................................1
Section 2. Other Definitional Provisions............................2
Section 3. Representations and Warranties of the Underwriter........2
Section 4. Representations and Warranties of the Insurer............2
Section 5. Indemnification..........................................3
Section 6. Amendments, Etc..........................................5
Section 7. Notices..................................................5
Section 8. Severability.............................................6
Section 9. Governing Law............................................6
Section 10. Counterparts.............................................6
Section 11. Headings.................................................6
(i)
<PAGE>
INDEMNIFICATION AGREEMENT dated as of December 15, 1999 (the
"Indemnification Agreement"), by and between AMBAC ASSURANCE CORPORATION, as
Insurer, and GREENWICH CAPITAL MARKETS, INC. (the "Underwriter").
Section 1. Defined Terms. Unless the context clearly requires
otherwise, all capitalized terms used but not defined herein shall have the
respective meanings assigned to them in Annex A to the Indenture, the Insurance
Agreement or the Policy. For purposes of this Indemnification Agreement, the
following terms shall have the following meanings:
"Indenture" means the Indenture (as may be amended, modified or
supplemented from time to time as set forth therein) dated as of December 1,
1999 by and between the Issuer and the Indenture Trustee, relating to the
GreenPoint Home Equity Loan Asset-Backed Notes, Series 1999-2.
"Insurance Agreement" means the Insurance and Indemnity Agreement (as
may be amended, modified or supplemented from time to time) dated as of December
22, 1999 by and among GreenPoint Mortgage Securities Inc., as Sponsor,
GreenPoint Mortgage Funding, Inc., as Servicer, the Insurer, the Trust, as
Issuer, and the Indenture Trustee.
"Insurer" means Ambac Assurance Corporation, or any successor thereto,
as issuer of the Policy.
"Insurer Information" has the meaning given such term in Section 4.
"Material Adverse Change" means, in respect of any Person, a material
adverse change in (i) the business, financial condition, results of operations
or properties of such Person on a consolidated basis with its subsidiaries or
(ii) the ability of such Person to perform its obligations under any of the
Company Documents.
"Offering Document" means the Prospectus Supplement, dated December 15,
1999, in respect of the Notes, and any amendment or supplement thereto, and any
other offering document in respect of the Notes that makes reference to the
Policy.
"Securities Act" means the Securities Act of 1933, including, unless
the context otherwise requires, the rules and regulations thereunder, as amended
from time to time.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
including, unless the context otherwise requires, the rules and regulations
thereunder, as amended from time to time.
"Underwriter" means Greenwich Capital Markets, Inc.
"Underwriter Information" has the meaning given such term in Section 3.
<PAGE>
Section 2. Other Definitional Provisions. The words "hereof," "herein"
and "hereunder" and words of similar import when used in this Indemnification
Agreement shall refer to this Indemnification Agreement as a whole and not to
any particular provision of this Indemnification Agreement, and Section,
subsection, Schedule and Exhibit references are to this Indemnification
Agreement unless otherwise specified. The meanings given to terms defined herein
shall be equally applicable to both the singular and plural forms of such terms.
The words "include" and "including" shall be deemed to be followed by the phrase
"without limitation."
Section 3. Representations and Warranties of the Underwriter. The
Underwriter represents and warrants as of the Closing Date as follows:
(a) Compliance With Laws. The Underwriter will comply in all
material respects with all legal requirements in connection with offers
and sales of the Notes and will make such offers and sales in the
manner to be provided in the Offering Document.
(b) Offering Document. The Underwriter will not use, or
distribute to other broker-dealers for use, any Offering Document in
connection with the offer and sale of the Notes unless such Offering
Document includes such information relating to the Insurer as has been
furnished by the Insurer for inclusion therein and has been approved by
the Insurer.
(c) Underwriter Information. All material provided by the
Underwriter for inclusion in the Offering Document (as revised from
time to time), is true and correct in all material respects, it being
understood and agreed that the only such information furnished by the
Underwriter consists of the following information (collectively, the
"Underwriter Information"): the information contained in the fifth
paragraph under the caption "Underwriting" in the Offering Document.
Section 4. Representations and Warranties of the Insurer. The Insurer
represents and warrants to the Underwriter as follows:
(a) Organization and Licensing. The Insurer is a duly
organized and licensed and validly existing Wisconsin stock insurance
company duly qualified to conduct an insurance business in the State of
New York.
(b) Corporate Power. The Insurer has the corporate power and
authority to issue the Policy and execute this Indemnification
Agreement and to perform all of its obligations hereunder and
thereunder.
(c) Authorization; Approvals. Proceedings legally required for
the issuance of the Policy and the execution, delivery and performance
of this Indemnification Agreement have been taken and all material
licenses, orders, consents or other authorizations or approvals of any
governmental boards or bodies legally required for the enforceability
of the Policy have been obtained or are not material to the
enforceability of the Policy.
2
<PAGE>
(d) Enforceability. The Policy, when issued, and this
Indemnification Agreement will each constitute a legal, valid and
binding obligation of the Insurer, enforceable in accordance with its
terms, subject to insolvency, reorganization, moratorium, receivership
and other similar laws affecting creditors' rights generally and by
general principles of equity and subject to principles of public policy
limiting the right to enforce the indemnification provisions contained
therein and herein, insofar as such provisions relate to
indemnification for liabilities arising under federal securities laws.
(e) Financial Information. The consolidated financial
statements of the Insurer and subsidiaries as of December 31, 1998 and
December 31, 1997, and for each of the years in the three-year period
ended December 31, 1998, prepared in accordance with generally accepted
accounting principles, included in the Annual Report on Form 10-K of
Ambac Financial Group, Inc. (which was filed with the Commission on
March 30, 1999; Commission File Number 1-10777) and the unaudited
consolidated financial statements of the Insurer and subsidiaries as of
September 30, 1999 and for the periods ending September 30, 1999 and
September 30, 1998 included in the Quarterly Report on Form 10-Q of
Ambac Financial Group, Inc. for the period ended September 30, 1999
(which was filed with the Commission on November 12, 1999), which are
incorporated by reference in the Offering Document, fairly present in
all material respects the financial condition of the Insurer as of such
dates and for the periods covered by such statements in accordance with
generally accepted accounting principles consistently applied. Since
September 30, 1999, there has been no change in the financial condition
of the Insurer that would materially and adversely affect its ability
to perform its obligations under the Policy.
(f) Insurer Information. The information in the Offering
Document as of the date hereof under the caption "THE INSURER AND THE
POLICY" (the "Insurer Information") is true and correct in all material
respects and does not contain any untrue statement of a material fact.
(g) Rating. The Insurer is not aware of any facts that if
disclosed to Moody's or S&P would be reasonably expected to result in a
downgrade of the rating of the financial strength rating of the Insurer
by either of such Rating Agencies.
(h) No Litigation. There are no actions, suits, proceedings or
investigations pending or, to the best of the Insurer's knowledge,
threatened against it at law or in equity or before or by any court,
governmental agency, board or commission or any arbitrator which, if
decided adversely, would result in a Material Adverse Change or would
materially and adversely affect its ability to perform its obligations
under the Policy, this Indemnification Agreement or the Insurance and
Indemnity Agreement.
(i) Securities Act Registration. The Policy is exempt from
registration under the Securities Act.
3
<PAGE>
Section 5. Indemnification.
(a) The Underwriter hereby agrees to pay, and to protect,
indemnify and hold harmless, the Insurer and its officers, directors,
shareholders, employees, agents and each Person, if any, who controls
the Insurer within the meaning of either Section 15 of the Securities
Act or Section 20 of the Securities Exchange Act from and against, any
and all claims, losses, liabilities (including penalties), actions,
suits, judgments, demands, damages, costs or expenses (including
reasonable fees and expenses of attorneys, consultants and auditors and
reasonable costs of investigations) of any nature arising out of or by
reason of any untrue statement of a material fact or an omission to
state a material fact necessary in order to make the statements therein
in light of the circumstances in which they were made not misleading,
contained in the Underwriter Information or a breach of any of the
representations and warranties of the Underwriter contained in Section
3.
(b) The Insurer agrees to pay, and to protect, indemnify and
hold harmless, the Underwriter and its respective officers, directors,
shareholders, employees, agents and each Person, if any, who controls
such Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act from and
against, any and all claims, losses, liabilities (including penalties),
actions, suits, judgments, demands, damages, costs or expenses
(including reasonable fees and expenses of attorneys, consultants and
auditors and reasonable costs of investigations) of any nature arising
out of or by reason of any untrue statement of a material fact or an
omission to state a material fact necessary in order to make the
statements therein in light of the circumstances in which they were
made not misleading, contained in the Insurer Information or a breach
of any of the representations and warranties of the Insurer contained
in Section 4.
(c) If any action or proceeding (including any governmental
investigation) shall be brought or asserted against any Person
(individually, an "Indemnified Party" and, collectively, the
"Indemnified Parties") in respect of which the indemnity provided in
this Section 5(a) or (b) may be sought from the Underwriter, on the one
hand, or the Insurer, on the other (each, an "Indemnifying Party")
hereunder, each such Indemnified Party shall promptly notify the
Indemnifying Party in writing, and the Indemnifying Party shall assume
the defense thereof, including the employment of counsel satisfactory
to the Indemnified Party and the payment of all expenses. The
Indemnified Party shall have the right to employ separate counsel in
any such action and to participate in the defense thereof at the
expense of
4
<PAGE>
the Indemnified Party; provided, however, that the fees and expenses of
such separate counsel shall be at the expense of the Indemnifying Party
if (i) the Indemnifying Party has agreed to pay such fees and expenses,
(ii) the Indemnifying Party shall have failed to assume the defense of
such action or proceeding and employ counsel reasonably satisfactory to
the Indemnified Party in any such action or proceeding or (iii) the
named parties to any such action or proceeding (including any impleaded
parties) include both the Indemnified Party and the Indemnifying Party,
and the Indemnified Party shall have been advised by counsel that there
may be one or more legal defenses available to it which are different
from or additional to those available to the Indemnifying Party (in
which case, if the Indemnified Party notifies the Indemnifying Party in
writing that it elects to employ separate counsel at the expense of the
Indemnifying Party, the Indemnifying Party shall not have the right to
assume the defense of such action or proceeding on behalf of such
Indemnified Party, it being understood, however, that the Indemnifying
Party shall not, in connection with any one such action or proceeding
or separate but substantially similar or related actions or proceedings
in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys at any time for the Indemnified
Parties, which firm shall be designated in writing by the Indemnified
Party). The Indemnifying Party shall not be liable for any settlement
of any such action or proceeding effected without its written consent
to the extent that any such settlement shall be prejudicial to the
Indemnifying Party, but, if settled with its written consent, or if
there is a final judgment for the plaintiff in any such action or
proceeding with respect to which the Indemnifying Party shall have
received notice in accordance with this subsection (c), the
Indemnifying Party agrees to indemnify and hold the Indemnified Parties
harmless from and against any loss or liability by reason of such
settlement or judgment.
(d) To provide for just and equitable contribution if the
indemnification provided by the Indemnifying Party is determined to be
unavailable or insufficient to hold harmless any Indemnified Party
(other than due to application of this Section), each Indemnifying
Party shall contribute to the losses incurred by the Indemnified Party
on the basis of the relative fault of the Indemnifying Party, on the
one hand, and the Indemnified Party, on the other hand provided, that
the Underwriter shall not be liable for any amount in excess of (i) the
excess of the sales prices of the Offered Notes to the public over the
prices paid therefor by the Underwriter over (ii) the aggregate amount
of any damages which the Underwriter has otherwise been required to pay
in respect of the same or any substantially similar claim.
The relative fault of each Indemnifying Party, on the one
hand, and each Indemnified Party, on the other, shall be determined by
reference to, among other things, whether the breach of, or alleged
breach of, any of its representations and warranties set forth was
within the control of, the Indemnifying Party or the Indemnified Party,
and the parties relative intent, knowledge, access to information and
opportunity to correct or prevent such breach.
No person guilty of fraudulent misrepresentation (within the
meaning of Section (11)(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
Section 6. Amendments, Etc. This Indemnification Agreement may be
amended, modified, supplemented or terminated only by written instrument or
written instruments signed by the parties hereto.
Section 7. Notices. All demands, notices and other communications to be
given hereunder shall be in writing (except as otherwise specifically provided
herein) and shall be mailed by registered mail or personally delivered and
telecopied to the recipient as follows:
5
<PAGE>
(a) To the Insurer:
Ambac Assurance Corporation
One State Street Plaza
New York, New York 10004
Attention: Structured Finance Department--MBS
Telecopy No.: 212-363-1459
Confirmation: 212-668-0340
(b) To the Underwriter:
Greenwich Capital Markets, Inc.
600 Steamboat Road
Greenwich, Connecticut 06830
Attention: Legal Department
Telecopy No.: 203-618-2132
Confirmation: 203-625-2700
A party may specify an additional or different address or addresses by
writing mailed or delivered to the other parties as aforesaid. All such notices
and other communications shall be effective upon receipt.
Section 8. Severability. In the event that any provision of this
Indemnification Agreement shall be held invalid or unenforceable by any court of
competent jurisdiction, the parties hereto agree that such holding shall not
invalidate or render unenforceable any other provision hereof. The parties
hereto further agree that the holding by any court of competent jurisdiction
that any remedy pursued by any party hereto is unavailable or unenforceable
shall not affect in any way the ability of such party to pursue any other remedy
available to it.
Section 9. Governing Law. This Indemnification Agreement shall be
governed by and construed in accordance with the laws of the State of New York.
Section 10. Counterparts. The Indemnification Agreement may be executed
in counterparts by the parties hereto, and all such counterparts shall
constitute one and the same instrument.
Section 11. Headings. The headings of Sections and the Table of
Contents contained in this Indemnification Agreement are provided for
convenience only. They form no part of this Indemnification Agreement and shall
not affect its construction or interpretation.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this
Indemnification Agreement, all as of the day and year first above mentioned.
AMBAC ASSURANCE CORPORATION,
as Insurer
By: /s/ Jeffrey D. Nabi
--------------------------------
Name: Jeffrey D. Nabi
Title: Vice President
GREENWICH CAPITAL MARKETS, INC.,
as Underwriter
By: /s/ Frank Skibo
--------------------------------
Name: Frank Skibo
Title: Vice President
